2024
10/27
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Efforts to strengthen U.S. semiconductor manufacturing capabilities have shown significant results. It has been revealed that TSMC’s Arizona factory has achieved a 4% higher yield rate than its Taiwan factory, which is the company’s home base. This achievement is an important step in demonstrating the feasibility of advanced semiconductor manufacturing in the United States.
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Significance of yield improvement
Rick Cassidy, head of TSMC’s U.S. division, reported on improvements in production efficiency at the Phoenix factory in a webinar on October 23. Yield is one of the most important indicators in semiconductor manufacturing, and has a direct impact on manufacturing costs. This improvement in numbers, which indicate how many usable chips can be obtained from produced wafers, confirms the competitiveness of the United States as a manufacturing base.
Ongoing projects and challenges
The Arizona factory began trial production of 4nm node manufacturing this spring and is making steady progress. TSMC CEO CC Wei commented on the engineering wafer production results, saying, “The results are very satisfactory, and we have achieved a very good yield.” This result is an important indicator that the company’s advanced manufacturing technology can be replicated in the United States.
However, the project is not all smooth sailing. In particular, issues surrounding the working environment have become apparent. Differences in labor practices and cultural differences between Taiwan and the United States necessitated adjustments that were not initially anticipated. The time it took to address these issues affected the overall project schedule, necessitating an extension of approximately one year from the original plan.
Furthermore, the impact of this delay is also having a ripple effect on the construction plans for the second factory. The start of operation of the second factory, which was originally scheduled for 2026, is now expected to be postponed to 2027 at the earliest, and possibly to 2029. The facility is planned to implement 3nm and 2nm processes, and delays could also impact the timing of state-of-the-art processes in the United States.
On the other hand, TSMC’s efforts to address these issues are steadily producing results. The company is working to resolve issues through various measures, including strengthening technical training programs for local employees and localizing its labor management system. The company is also focusing on building relationships with the local Phoenix community, and is working to establish a long-term business foundation.
Strategic importance and future prospects
The success of the Arizona facility has several important implications for the U.S. semiconductor industry. First, the project, backed by a total of $11.6 billion in grants and loans from the government, is an important step in building domestic manufacturing capacity. This has more meaning than simply establishing a production base, and can be evaluated as a concrete result of efforts to ensure regional stability of the semiconductor supply chain.
Furthermore, support from major customers is becoming more and more certain. Production of Apple’s A16 Bionic processor has already begun, and AMD has also announced plans to manufacture chips for AI HPC at the facility. The participation of these leading technology companies will provide an important foundation for the facility’s long-term occupancy and profitability.
Looking to the future, there are possibilities for further development based on current successes. The current site is large enough to accommodate up to six manufacturing facilities, with plenty of room for future expansion. There have also been hints of the possibility of additional government support programs, which, if realized, could lead to further capital investment and capacity expansion.
Xenospectrum’s Take
This achievement is an important milestone that demonstrates the feasibility of cutting-edge semiconductor manufacturing in the United States. Three points are particularly noteworthy:
- Successful technology transfer: TSMC has replicated the advanced manufacturing technology it established in Taiwan in the United States, which has a different working environment and culture, and has further improved it, creating a new model case for global technology deployment.
- The impact of geography: The increasing geographical decentralization of semiconductor manufacturing will increase the resilience of global supply chains. This has important implications in the international competition for technological supremacy.
- Impact on the industrial ecosystem:Securing manufacturing contracts from major customers such as Apple and AMD could accelerate the formation of a semiconductor ecosystem in the United States.
However, overseas bases are expected to account for only about 10% of TSMC’s global production capacity, and it will likely take some time for the company to truly decentralize its manufacturing bases. Going forward, the continuity of government support and the success or failure of human resource development will be important factors that determine the long-term success of this project.
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