Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has achieved early production yields at its first plant in Arizona that surpass similar factories back home, a significant breakthrough for a US expansion project initially dogged by delays and worker strife.
The share of chips manufactured at TSMC’s facility in Phoenix that are usable is about 4 percentage points higher than comparable facilities in Taiwan, Rick Cassidy, president of TSMC’s US division, told listeners on a webinar on Wednesday, according to a person who participated.
The success rate, or yield, is a critical measure in the semiconductor industry because it determines whether companies would be able to cover the enormous costs of a chip plant.
Photo: Bloomberg
The accomplishment is a sign of progress for Washington’s efforts to revitalize semiconductor manufacturing in the US.
TSMC, the main chip manufacturing partner for Nvidia Corp and Apple Inc, is in line to win US$6.6 billion in US government grants and US$5 billion in loans — plus 25 percent tax credits — to build three fabs in Arizona. The award, like almost all others from the 2022 CHIPS and Science Act, is not yet finalized.
The two other chipmakers at the heart of the tech strategy of US President Joe Biden’s administration — Intel Corp and Samsung Electronics Co — have struggled in the past few months.
Intel, slated to be the biggest beneficiary of the CHIPS Act, is under such severe financial pressure that it is delaying global projects and considering selling assets.
Meanwhile, TSMC has been on a roll.
Its shares reached a record high this month after the chipmaker topped quarterly estimates and raised its target for revenue growth this year.
The latest yield advancement is notable for TSMC, because it has historically kept the most advanced and efficient plants in Taiwan.
Its Arizona site got off to a rocky start, as the company could not find enough skilled staff to install advanced equipment, and workers struggled with safety and management issues.
TSMC reached an accord with construction labor unions late last year.
The chipmaker originally planned to have its first Arizona plant start full production this year, but pushed back the target to next year over the labor issues. It later delayed the start date for its second fab to 2027 or 2028, from an initial target of 2026. That fueled concerns that the company might not be able to make chips in the US as efficiently as in Taiwan.
TSMC could now be keen to expand its US presence further, depending in part on the possibility of more US government backing, Cassidy said, citing early conversations in Washington about a second CHIPS Act.
There is room for at least six fabs at the Phoenix complex.
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