TSMC's United States chip factory is in production, which may be used in the iPhone SE or iPad

Recently, TSMC's chip manufacturing plant in Arizona, United States, has made new progress. According to people familiar with the matter, the factory has begun production of Apple's iPhone processors, an important milestone in United States' domestic chip manufacturing.

TSMC's Fab 21 in Arizona has begun small-scale (and significant) production of Apple's A16 chips in the first phase of its Fab 21 project.

This processor initially debuted in the iPhone 14 Pro two years ago. Although production is currently limited, it will be significantly ramped up with the completion and commissioning of the second phase of the plant. On current schedule, the project is on track to achieve its scheduled production target in the first half of 2025.

TSMC spokesperson Nina ·Kao confirmed: "The Arizona project is progressing smoothly as planned. But she declined to comment on specific customers or the products made at the facility.

It is worth noting that the A16 chip manufactured in Arizona uses the same N4P process as the Taiwan factory.

This process, sometimes referred to as the 4nm node and sometimes referred to as the 5nm node, actually belongs to the broader family of 5nm processes, which TSMC describes as an "enhanced version of the 5nm process."

TSMC's Arizona factory project is the flagship project of the United States administration's United States$39 billion CHIPS for America Fund under the CHIPS Act.

The bill aims to improve United States' competitiveness in the global semiconductor industry and reduce dependence on foreign chip supplies. TSMC received a $6.6 billion subsidy from the United States Department of Commerce, in addition to its initial investment of $12 billion in the factory in 2020.

However, the project was not well received from the outside, and the development of the past few years has been very bumpy, and the serious cultural differences are one of the reasons for this situation. Earlier this year, it was revealed in the media that the plant's original plan to start production in 2024 was postponed to 2025.

Its series of practices are difficult to accept in the United States, and the main challenge it faced was TSMC's attempt to introduce work models into the United States, including: 12-hour workday, weekend overtime, and midnight emergency calling.

In addition, TSMC managers' harsh attitude and frequent threats of dismissal have caused dissatisfaction among United States employees. Due to these problems, the high turnover rate of local employees in the United States has made it difficult for TSMC to fill the vacancies, and more than half of the factory's employees are from Taiwan, China.

Even so, if the latest progress of the plant is true, it means that TSMC has solved these problems to a certain extent, and the factory is just around the corner at full speed.

On a more macro level, Apple chose to produce one of its most advanced mobile processors, the A16, in the United States, demonstrating Apple and TSMC's confidence in United States chip manufacturing capabilities.

This decision has far-reaching strategic implications not only for technical reasons, but also for far-reaching strategic implications. It marks a key step forward for United States in high-end chip manufacturing, especially after Intel's recent collapse in its chip manufacturing business.

At present, the yield rate of the Arizona plant is slightly lower than that of the Taiwan factory, but the rate of progress is amazing. Industry insiders expect that in the coming months, the yield rate of the Arizona plant is expected to be on par with that of the Taiwan plant.

While it has not yet been determined which Apple device this batch of A16 chips produced in the United States will be used in, there are several possibilities.

One speculation is that they may be used in the upcoming iPad lineup, but may not include the iPad Mini, as the iPad Mini is expected to be released around October, and the chips may not have time to be assembled.

Another possibility is that the chips will be used in the next iPhone SE, which is rumored to be based on the use of the A16 processor and is expected to be launched in 2025.

TSMC's investment in Arizona doesn't stop there, with plans to build a total of three factories there.

The United States Department of Commerce has previously publicly stated that "these investments will directly create 6,000 manufacturing jobs and about 20,000 construction jobs." "This will not only help boost the local economy, but will also cultivate a pool of highly skilled semiconductor industry talents for the United States."

This development has also prompted people to think about the future direction of the global technology industry chain. With the emphasis on technological autonomy and the development of technology in various countries, the future is likely to see more tech giants choosing to disperse their supply chains and production bases in different regions. This trend may reshape the global technology industry landscape, bringing new opportunities and challenges.

For Apple, producing chips in the United States not only reduces supply chain risks, but also enhances its influence in the United States market. Although the number of chips currently produced in the United States is limited, this is undoubtedly an important start.

However, moving chip production to the United States also faces a number of challenges.

First, there is the issue of cost, and the cost of producing chips in the United States is generally higher than in Asia.

The second is the talent pool, and the United States needs time to develop enough semiconductor manufacturing professionals. In addition, building a complete supply chain ecosystem takes time and a lot of investment.

Despite this, the commissioning of TSMC's Arizona plant is still regarded as an important event by the industry. It not only marks United States's important progress in the field of high-end chip manufacturing, but also provides an example of the diversification of the global technology industry chain.

In the future, we are likely to see more companies follow Apple and TSMC's lead in building or expanding manufacturing-related capacity in the United States.

Resources:

https://appleinsider.com/articles/24/09/17/apple-a16-chip-is-now-being-produced-in-the-usa

https://timculpan.substack.com/p/apple-mobile-processors-are-now-made

https://www.bloomberg.com/news/articles/2024-09-06/tsmc-s-arizona-trials-put-plant-productivity-on-par-with-taiwan

Operation/Typesetting: He Chenlong