Apple begins producing chips in the U.S., becoming TSMC's first U.S. customer

On September 18, Beijing time, according to former Bloomberg reporter Tim Culpan, Apple is producing its A16 chip in the United States. Two years ago, the A16 was first used in the iPhone 14 Pro.

Kulpan posted on the content platform Substack that TSMC's new factory in Arizona, the United States, is producing the first batch of chips. Apple will become the first customer of the factory, using TSMC's 5-nanometer process to produce mobile processors.

People familiar with the matter told Kulpan that Apple's A16 chip is being produced in the first phase of TSMC's Fab 21 plant in Arizona, which is small but significant (similar to trial production). When the second phase of the project is completed and put into production, the output will increase significantly, which is expected to help the plant achieve its goal of officially starting production in the first half of 2025.

These A16 chips use the N4P process, which is the same process that TSMC uses to produce A16 chips in Taiwan. However, N4P is sometimes called the 4nm process and sometimes called 5nm, but it actually belongs to the 5nm process family. TSMC calls it an enhanced version of 5nm.

Currently, the yield rate of TSMC's Arizona plant is slightly lower than that of the Taiwan plant, or it can be said to be comparable. However, the yield rate of the plant is improving rapidly and is expected to catch up with the yield rate of the Taiwan plant in the next few months.

So, which Apple device will this batch of US-made A16s be used in? One possibility is a future iPad. Given that the new iPad Mini is expected to be released in October this year, it is unlikely to use these chips. Another possibility is the next-generation iPhone SE. Since this phone is based on the iPhone 14 design using the A16 processor and is launched next year, it may use the US-made A16 chip.

TSMC spokeswoman Menghua Kao said the "Arizona factory project is progressing smoothly as planned." She declined to comment on the factory's customers or products.