Recent reports from industry insiders disclosed to American media that TSMC has initiated chip production for Apple at a semiconductor plant in Phoenix, Arizona, although it has not reached full production capacity yet. Analysts have noted that this move marks a significant milestone in Apple’s chip production as it ventures into manufacturing in the United States.
According to an article by Business Insider on Wednesday, informed sources revealed this development, signifying a push towards increased semiconductor production in the U.S.
Tech journalist Tim Culpan reported this news in September, citing unnamed sources. Culpan mentioned that TSMC’s Fab 21 plant in Phoenix, Arizona, was in the initial phase of producing the A16 chip for Apple’s iPhone. These chips, manufactured using 5nm technology, are considered significant despite the current output being relatively low.
In 2020, TSMC announced plans to invest billions of dollars in Arizona to create thousands of job opportunities.
Moreover, two years ago, Apple CEO Tim Cook announced that Apple would be the largest customer at TSMC’s first manufacturing facility in Arizona and would use American-made chips for the first time in nearly a decade.
Culpan highlighted that the manufacturing process of the A16 chips in TSMC’s Arizona plant is identical to those produced in Taiwan. In September, Bloomberg reported that the yield rate at TSMC’s Arizona plant is similar to that of similar factories in Taiwan.
Located near Phoenix, Arizona, TSMC’s Fab 21 plant has commenced trial production of chips using 5nm technology nodes, including N4/N4P/N4X and N5/N5P/N5X processes.
A TSMC spokesperson declined to comment on the collaboration with Apple in the U.S. to Business Insider. When asked about the progress of their first chip plant, the spokesperson stated that the project is “progressing smoothly as planned” and is expected to be fully operational by the first half of 2025.
Apple did not respond to Business Insider’s request for comments.
Dylan Patel, Chief Analyst at Semiconductor research and consulting firm SemiAnalysis, stated to Business Insider that domestic chip production in the U.S. signifies an important milestone for Apple.
“While there were early negative reports, this news indicates that the factory is running as planned and expected. It’s a success story,” he said.
The sources cited by Business Insider did not specify the type of chip being produced in Phoenix. Mark Muro, Senior Fellow at the Brookings Institution, told Business Insider that the reported production of the A16 chip in the U.S. is a very positive signal for Apple’s partnership with TSMC.
“This shows that Apple has enough confidence in the new American plant to directly manufacture one of its most advanced phone processors in the U.S.,” he said.
Culpan further disclosed this month that sources revealed AMD has reached an agreement with TSMC to produce high-performance chips at TSMC’s new plant in Arizona. If true, AMD will become the second high-profile client at the factory following Apple.
TSMC, responsible for producing 90% of the world’s most advanced chips, counts industry leaders such as Nvidia and Apple as its primary partners. In April of this year, the Biden administration announced TSMC would receive $6.6 billion in funding through the federal “Chip and Science Act” to support its first major U.S. chip manufacturing center in Arizona.
Based on TSMC’s previous plans, its two chip manufacturing plants in Arizona are set to begin production in 2025 and 2028, with some anticipated funding from the “Chip Act” being used to construct a third facility.