TSMC Arizona achieves production yields similar to those at its fabs in Taiwan, says report
Fab 21's 4nm chip mass production is due to begin in 2025
TSMC has successfully achieved production yields at its Fab 21 Arizona facility similar to those at its fabs in Taiwan, reports Bloomberg. This signals that the company's major U.S. project is on course, despite earlier issues and delays. The fab, initially set to start full production in 2024, was pushed to 2025 due to a shortage of skilled labor, yet it looks like there will be no more setbacks for the chip production facility.
TSMC's Fab 21 near Phoenix, Arizona began trial production in April 2024 using N4 (4nm-class) process technology. Production yields are now on par with those from TSMC's Tainan facility in southern Taiwan, according to Bloomberg. Yield rate is a crucial factor in profitability, and the company is performing well despite the challenges of operating overseas.
While TSMC does not publicly disclose its specific yield rates, the company has consistently maintained a long-term gross margin of 53% or higher and a net profit above 36% over the past four years. Investors are monitoring the company's ability to maintain these margins, especially as it expands production outside of Taiwan: in the U.S., Japan, and Germany.
The delay in full production, initially planned for 2024, was due to a lack of skilled workers in Arizona, according to TSMC. Meanwhile, Intel, which also has fabs in Arizona, never complained about the lack of skilled workforce in the state. TSMC's comments have raised concerns about whether TSMC can match the efficiency of its Taiwanese operations in the U.S. However, the company has expressed confidence that the Arizona project is progressing as planned without disclosing its yields.
TSMC is a key supplier for major tech companies like Apple, AMD, Intel, and Nvidia. Making processors for these companies in the U.S. will enable them to diversify their supply chain and ensure that crucial chips are made domestically. TSMC's ability to replicate its strong yield rates and profitability in the Arizona fab is important both for the contract chipmaker and its customers in the U.S.
To support TSMC's expansion in America, the U.S. government is providing significant financial backing to the foundry. TSMC will receive $6.6 billion in grants and up to $5 billion in loans to aid its $65 billion investment in its Arizona campus that will house three phases of Fab 21.
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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
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dalek1234 If TSMC still needs skilled workers, Intel is laying off a bunch of them. Perfect place to look.Reply -
Eximo Reply
Not likely Intel has laid off experienced fab workers, that is the core business and a sector they are still expanding in.dalek1234 said:If TSMC still needs skilled workers, Intel is laying off a bunch of them. Perfect place to look. -
Pierce2623 Reply
Uhh you do realize there’s articles all over the internet that they’re actually trying to sell 18a/20a to TSMC, right? I imagine they’d be happy to provide the workers along with it.Eximo said:Not likely Intel has laid off experienced fab workers, that is the core business and a sector they are still expanding in. -
Eximo Reply
Rumors of splitting off the foundry as a separate business does not equal downsizing existing fab employees. Selling to their main competitor, I don't see that happening. The US, at the least, would do their utmost to prevent that.Pierce2623 said:Uhh you do realize there’s articles all over the internet that they’re actually trying to sell 18a/20a to TSMC, right? I imagine they’d be happy to provide the workers along with it. -
dalek1234 Reply
Normally, this would be the case, but I read recently that Intel is also planning on giving people monetary incentives to quit, because the monetary incentive will be less costly than a severance pay. Good engineers who are fed up with Intel might take Intel up on that offer.Eximo said:Not likely Intel has laid off experienced fab workers, that is the core business and a sector they are still expanding in. -
dalek1234 Reply
The US has given TSMC ~6 billion grant to build a foundry in US. It's seems to me that US government would not prevent a sale of a US foundry to TSMC. Maybe I'm wrong.Eximo said:Rumors of splitting off the foundry as a separate business does not equal downsizing existing fab employees. Selling to their main competitor, I don't see that happening. The US, at the least, would do their utmost to prevent that.
Rumors aside, Intel has recently announced that they are canning 20a. They could shift those employees to 18a, but if 18a is already staffed, Intel will have no need for the 20a engineers anymore, at least for some. -
Eximo Replydalek1234 said:The US has given TSMC ~6 billion grant to build a foundry in US. It's seems to me that US government would not prevent a sale of a US foundry to TSMC. Maybe I'm wrong.
Rumors aside, Intel has recently announced that they are canning 20a. They could shift those employees to 18a, but if 18a is already staffed, Intel will have no need for the 20a engineers anymore, at least for some.
It would be making yourself beholden to a single vendor for any potential domestically produced strategic resources. And a foreign owned one at that. Would also fall under monopoly territory as well.
20a and 18a are the same facility is my understanding. So 18A I think is the same staff. -
Amdlova Only future I see is Taiwanese ENG people with a Green card. Come to the Land of Freedom.Reply -
Pierce2623 Reply
I didn’t say anything about the rumors of splitting off the fabs. There’s a separate rumor that they only want to sell 18a/20a but keep Intel 3 & 4 in house (probably because nobody would buy those as an IP instead of a turn-key foundry since they’re not particularly great nodes for anything requiring efficiency)Eximo said:Rumors of splitting off the foundry as a separate business does not equal downsizing existing fab employees. Selling to their main competitor, I don't see that happening. The US, at the least, would do their utmost to prevent that.