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TSMC completes construction of its Phoenix-based fab that will produce 5nm chips by 2024

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On the heels of Congressional approval of the Chips and Science Act, a bill that will help the U.S. government subsidize chip manufacturing in the states, has announced TSMC that it has completed construction on Fab 21. You may be wondering what the connection is between a Taiwan-based foundry completing a new $12 billion fab and the U.S. The answer is that TSMC’s Fab 21 is located in Phoenix, Arizona.
on LinkedInTSMC announced: “We recently celebrated the placing of the final beam – also known in the construction industry as a ‘topping’ milestone – in the fantastic building of FAB 21 with our local partners. More than 4,000 in attendance attended to enjoy this important moment, including our own employees and partners. #TSMCArizona is on time and on track to bring the most advanced advanced semiconductor technology to the US. We are deeply grateful to our partners and look forward to more successful milestones in Arizona.”

TSMC hopes to start production of 5nm chips in Arizona from 2024

After taking only 16 months to build the building, the next step is to bring in the equipment. The world’s leading independent foundry hopes to begin manufacturing 5nm chips in the United States by 2024. By the time these components are shipped, TSMC’s Taiwan factories will produce 3nm chips with 2nm expected by 2026. The lower this process node number, the higher the number of transistors for these chips. The higher the number of transistors, the more powerful and energy efficient these chips are.

In other words, Fab 21 will be two process nodes behind the most advanced process nodes by the time the Arizona plant begins chip production. That’s not a bad thing, because many chips used in the automotive industry are made with much older and mature technology and the 5nm process node is only now coming into its own for automotive production.

TSMC will start shipping 3nm chips later this year. Samsung has already started supplying 3nm chips to cryptocurrency minors using the gate all-round transistor design that TSMC will not use until the 2nm product starts shipping (expected by 2026).

TSMC’s Arizona facility may be hampered by a culture conflict between Taiwanese and US workers

There has already been a clash of cultures as the management style used in Taiwan doesn’t work well with American workers. An anonymous US employee who worked at the Arizona site complained of long meetings last year. This employee wrote in a Taiwanese publication that the meetings he labeled as “excessive” lasted as much as three hours a day. Just before construction began on the Phoenix facility, TSMC sent more than 100 hired Americans to Taiwan, in part to be indoctrinated into the way things are done in the area.
The Chips and Science Act will result in the US government subsidizing the US semiconductor industry $52 billion to produce more chips in the US. The goal is to make the US self-sufficient in the semiconductor industry so that US tech companies like Apple doesn’t have to hold its breath every time China squints at Taiwan. There is always the fear that China, with its own desire to be self-sufficient in semiconductors, will try to conquer Taiwan and keep TSMC as its property.
As an independent foundry, TSMC takes designs created by its customers, including Apple (the largest customer), Qualcomm (which also uses Samsung Foundry), rising star Mediatek, Nvidia, Intel, AMD, and others, and builds the finished part. Valued at $459 billion as of the close of the New York Stock Exchange on Friday, TSMC is the world’s 10th most valuable company by market capitalization (share price multiplied by the number of shares outstanding).

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