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TSMC triples its Arizona investment to $40bn; first 4nm chips to roll out in 2024

TSMC Arizona fabs

Leading chip-maker TSMC on Tuesday announced that it will open its second giant chip-making plant in Phoenix, Arizona by tripling its investment from $12billion to $40 billion. The first Phoenix plant or “fab” will begin production of 4nm process technology in 2024 whereas the second fab is expected to roll out production of the newest and most complex 3nm process technology in 2026. US President Joe Biden and Apple CEO Tim Cook and some other tech leaders joined the company in announcing the largest foreign investment ever in US history.

Tawainese based TSMC is the world’s largest semiconductor manufacturer, and Apple, NVIDIA and AMD are among some of its top customers.  At the “tool-in” ceremony, marking the arrival of production equipment to the first facility, Apple announced that the tech giant plans to start using “made in America” processors following the production of advanced chips in TSMC’s new fabs in Phoenix. AMD and NVIDIA also confirmed that they would be among the first customers to buy chips from the new chip-making plants.

President Biden also hailed the expansion.“ These chips will power iPhones and MacBooks, as Tim Cook can attest,” he said adding “Apple had to buy all the advanced chips from overseas. Now we’re going to do more of their supply chain here at home.”

TSMC is the sole manufacturer of chips used by Apple since it moved on from Intel in 2020. The tech giant has been using its own-designed chips produced by TSMC in gadgets. The A16 chips used in iPhones 14 Pro and Pro Max and its M2 chips for MacBooks are both created with 5nm process technology.  “The progress we’ve made with Apple Silicon has transformed our devices,” Apple CEO said. He further added, “When you stop and think about it, it’s extraordinary what chip technology can achieve. And now, thanks to the hard work of so many people, these chips can be proudly stamped ‘Made in America.’”

TSMC says its Arizona fabs will manufacture over 600,000 wafers per year annually by 2026. White House officials believe the number will be enough to meet the entire US demand for advanced chips.

Semiconductors are the key components in everything from phones, microwaves to military jets. It is sometimes also referred as “brains” of electronics like smartphones.

Earlier in August, President Biden signed the landmark $280 billion bipartisan bill to boost domestic semiconductor production. To address the global chip shortage, the U.S. CHIPS Act promised to offer $52 billion in subsidies for semiconductor research and manufacture. Along with incentives like an investment tax credit for chip facilities. Biden’s “once-in-a-generation commitment” also includes an authorization of a whopping $200 billion for more than 10 years to improve scientific research in the nation to better compete with China.

Lockdowns brought on by Covid-19 prompted the closure of production facilities and hampered international trade. Due to the transition to offline work and study, there was a parallel increase in demand for gadgets, particularly phones, laptops, and tablets, which led to scarcity. The global disruption of the supply chain affected the revenues of many businesses, including tech giants like Apple.

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