TAIPEI (Taiwan News) — When Taiwan Semiconductor Manufacturing Co. (TSMC) finishes its new Arizona fab the chips it produces will still need to be sent to Taiwan for assembly, according to The Information on Monday (Sept. 11).
TSMC is building a 4nm fab and a 3nm facility at its Phoenix location, which will cost the company upwards of US$40 billion (NT$1.28 trillion). And while the Arizona project has been touted by U.S. President Joe Biden and companies like Apple as a way for the U.S. to cut its reliance on overseas chipmaking, the reality is those chips will still need to be sent to Taiwan for backend assembly.
Advanced chips made in Arizona for TSMC customers like Apple, Nvidia, AMD, and Tesla will need advanced packaging that is carried out in Taiwan, according to TSMC engineers and former Apple employees interviewed by The Information.
“Building this type of facility in a huge expenditure of (capital), time, and effort, and it does not seem likely that TSMC will want to do this anytime soon in the desert in Arizona, given all the problems the firm has encountered with construction, costs, and personnel so far,” Paul Triolo, senior vice president for China at consultancy DGA-Albright Stonebridge Group told The Information.
Advanced packaging, which was introduced around 2000, uses sophisticated technology to aggregate components from various wafers, creating a single electronic device, according to McKinsey. Different advanced packing techniques have been developed, including 2.5-D, 3-D, fan-out, and system-on-a-chip packaging, per McKinsey.
TSMC had originally planned to begin commercial production of 4nm chips at the first Phoenix fab in 2024, but in July pushed the date back to 2025. Meanwhile, its 3nm Phoenix fab is still scheduled to start mass production in 2026.