TSMC's Phoenix Chip Plant Surpasses Taiwan's Yield

Taiwan Semiconductor Manufacturing US President Rick Cassidy, during a webinar hosted by the Potomac Institute for Policy Studies, revealed that TSMC's chip factory in Phoenix, Arizona, has achieved approximately 4% more usable chips than its Taiwan counterparts.

Significant Achievement for TSMC

According to Bloomberg, this achievement is a significant one for TSMC, considering that its most efficient and advanced chip plants are located in Taiwan. This victory marks a significant step for the US in its efforts to reshore chip production, as outlined in the Biden administration's 2022 Chips and Science Act. However, Vice President Harris has found little leverage in promoting domestic chip developments, as issues of inflation and border invasion continue to dominate headlines with the election looming. TSMC CEO C.C. Wei, during an earnings call with investors last week, shared, "Our first fab entered engineering wafer production in April with 4-nanometer process technology, and the result is highly satisfactory, with a very good yield." He further emphasized the importance of this operational milestone for TSMC and its customers, showcasing TSMC's robust manufacturing capability and execution.

TSMC's Grant from the Chips and Science Act

TSMC has been a significant beneficiary of the Chips and Science Act, receiving $6.6 billion in grants, up to $5 billion in loans, and 25% tax credits to construct three chip plants in Arizona. The Biden administration has so far allocated $39 billion in direct grants and $75 billion in loans and guarantees through the Chips and Science Act to rejuvenate America's chip-making capacity. This capacity has declined over the years due to offshoring to Asia. This trend reversal bodes well for the resurgence of America's manufacturing capabilities by the decade's end. Moreover, it's crucial that high-tech chips for weapons systems are not produced in areas around China, given the potential for geopolitical tensions to disrupt supply chains.

Reactions from Users

Several users have shared their thoughts on this development: A user with the handle @reddit_lies asked, "How do I short Taiwan?" Joe Weisenthal (@TheStalwart) commented, "That's interesting yeah. I don't get the impression that the Harris campaign has made CHIPS/IRA stuff a big part of its message." Josh (@Jskybowen) noted, "Earnings call said AZ profit margin is worse. I wonder how much due to AZ being the newest fab producing 4nm whereas newer Taiwan fabs are doing 3nm and first gen 3nm had notably poor yields."

First Batch of Apple A16 Chips

Last month, independent journalist Tim Culpan from Taiwan reported that TSMC's Arizona plant produced the first batch of Apple A16 chips using the 4 nm process. Once the chips are manufactured in Arizona, they are likely to be sent to Foxconn factories in China or India, where low-cost labor will assemble iPhones or iPads. This development is excellent news for made-in-America chips and reshoring efforts.

Bottom Line

The success of TSMC's Phoenix plant in surpassing Taiwan's chip yield is a significant milestone for the US semiconductor industry. It not only demonstrates the potential for reshoring chip production but also highlights the importance of domestic manufacturing for national security. What are your thoughts on this development? Feel free to share this article with your friends. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.