Now that Taiwanese regulations allow TSMC to export its latest process technologies to its fabs overseas, the question is whether TSMC can do this and wants to do this considering the fact that all of its production nodes are developed in Taiwan. C.C. Wei, chief executive and chairman of TSMC, says that not only ramping up production of TSMC's leading-edge manufacturing process in the U.S. would be complicated because fabs in Arizona are far from R&D in Taiwan, but also because of bureaucracy in the U.S., according to Reuters.
TSMC’s CEO explained that new technology nodes are initially ramped up in Taiwan because leading-edge manufacturing processes are highly complex and require close proximity to R&D teams that can make certain adjustments to meet certain goals. While TSMC would be glad to implement the same technology in Taiwan and the U.S., logistical challenges make it impractical for the U.S. facilities to lead this process. Therefore, Taiwan will always take precedence for new technology introductions.
"It is not that we do not want to ramp up the same technology [in the U.S.] as in Taiwan," said C.C. Wei at the latest earnings call with analysts and investors. "When we introduce a new technology into manufacturing, the fab, the process is so complicated [that] it has to be very close to the R&D people. So, the initial phase of the ramping up always come from the fab close to R&D. So, in that sense, we want to ramp up the same kind of technology in the U.S., but that practically is a little bit difficult. So, Taiwan will always be first."
There is another reason why it is hard for TSMC to move on with the latest process technology in the U.S.: bureaucracy. The facility in Arizona has taken at least twice as long to build compared to Taiwan due to the need for extensive permits, local construction regulations, and a lack of streamlined processes, according to C.C. Wei. Addressing regulatory complexities alone cost the company $35 million, as it developed 18,000 rules to meet compliance requirements. Also, chemical supply costs are five times greater, prompting TSMC to ship sulfuric acid from Taiwan to Los Angeles and then transport it to Arizona.
"Every step requires a permit, and after the permit is approved, it takes at least twice as long as in Taiwan," Wei said at a National Taiwan University event, reports Reuters. "We ended up establishing 18,000 rules, which cost us $35 million."
Regulations, extensive permitting, and a flexible supply chain have their effect not only on how fabs are built or operated, but also on development of next-generation manufacturing processes.
Some new process technologies require all-new tools and time for TSMC to rethink how its fabs are built. For example, unlike DUV tools, an EUV lithography tool places its CO2 laser generator system (pre-pulse and main pulse seed units, power amplifiers) below the EUV light generator and the fab floor on a sub-fab floor. So, companies like TSMC had to change designs of their fabs. High-NA EUV tools are significantly larger than the current-generation Low-NA EUV tools, so TSMC will have to once again change design of their fabs.
Also, production nodes tend to use new chemicals, such as photoresists, developers, etchants, deposition gases, and cleaning agents, just to name some. New chemicals are sometimes vital for new manufacturing technologies and TSMC's partners in Taiwan can deliver what the company's R&D people need. In the U.S., TSMC can barely get what it needs to produce chips on a fabrication process that is four years old.
