TSMC's US plant achieves a breakthrough in yield

Latest update time：2024-10-25

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Source: Content compiled from Bloomberg, thank you.

TSMC’s first Arizona plant has achieved early production yields that exceed those of similar domestic factories, a major breakthrough for a U.S. expansion project that was initially plagued by delays and worker conflicts.

Rick Cassidy, president of TSMC's U.S. unit, said in a webinar on Wednesday that the Phoenix plant has a rate of about 4 percentage points higher than a similar facility in Taiwan, according to a person who attended the webinar. Yield is a key metric in the semiconductor industry because it determines whether a company can cover the huge costs of a chip factory.

The achievement is a sign of progress in Washington's efforts to revitalize U.S. semiconductor manufacturing. TSMC, a major chipmaking partner of Nvidia and Apple Inc., is expected to receive $6.6 billion in government grants and $5 billion in loans — plus a 25% tax credit — to build three manufacturing facilities in Arizona. Like nearly all other awards in the 2022 Chips and Science Act, the award has not yet been finalized.

A TSMC spokesman declined to comment directly on Cassidy's activities and referred to comments made by Chief Executive Officer CC Wei on a call with investors last week.

He said at the time: "Our first factory started engineering wafer production using 4-nanometer process technology in April, and the results are very satisfactory, with very good yields. This is an important operational milestone for TSMC and its customers, demonstrating TSMC's strong manufacturing capabilities and execution."

Intel and Samsung Electronics, two other chipmakers at the heart of the Biden administration's tech strategy, have faced difficulties in recent months. Intel was expected to be the biggest beneficiary of the CHIPS Act, but its financial pressures are so severe that it is delaying global projects and considering selling assets.

TSMC, meanwhile, is riding a wave of momentum. Its shares hit a record high this month as the chipmaker beat quarterly expectations and raised its target for 2024 revenue growth.

The yield increase is significant for TSMC, which has historically kept its most advanced and efficient factories on the main island of Taiwan. The Arizona plant initially went poorly as the company failed to find enough skilled employees to install advanced equipment and workers also faced problems with safety and management. TSMC and the construction union reached an agreement late last year.

The chipmaker initially planned to have its first Arizona plant in full production in 2024, but pushed that target back to 2025 due to labor issues. The start-up date for the second plant was then pushed back to 2027 or 2028, from an initial target of 2026. That raised concerns about whether the company could manufacture chips in the U.S. as efficiently as it could in Taiwan.

TSMC may now look to further expand its presence in the U.S., depending in part on whether it can secure more government support, Cassidy added, citing preliminary conversations in Washington about a second CHIPS Act. The Phoenix complex has room for at least six manufacturing facilities.

Wei expressed optimism about U.S. expansion in a conference call last week.

“We now expect volume production at the first plant to begin in early 2025 and are confident that our Arizona plant will deliver the same level of manufacturing quality and reliability as our Taiwan plant,” he said.

Original link

https://www.bloomberg.com/news/articles/2024-10-24/tsmc-s-arizona-chip-production-yields-surpass-taiwan-sa-win-for-us-push

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