Apple will use American-made chips from TSMC’s new Phoenix factory

Apple plans to start using processors made in the USA after opening an advanced new chip factory in Phoenix, Arizona.

For factory customers, which include AMD and NVIDIA, the new facility means a safer chip supply and faster production times. Chipmaker TSMC also said today that it will begin construction of a second factory in Phoenix next year, increasing the facility’s annual output.

“As Tim Cook can confirm, these chips will power iPhones and MacBooks,” President Joe Biden said at an event outside his Arizona factory on Tuesday. “Apple had to buy all advanced chips from overseas. Now we will do most of their supply chain here, at home.”

Biden and Apple CEO Tim Cook were present in north Phoenix for TSMC’s “vehicle docking” ceremony to mark the arrival of production equipment at the first facility.

The factory is a large modern building surrounded by newly paved roads and cacti that survived the desert bulldozer. At its first public event, TSMC invited customers, employees, local leaders and journalists to see its new factory, or at least the exterior.

TSMC is a private foundry, meaning it manufactures chips designed by other companies. Apple, AMD and NVIDIA are among its biggest customers, and even Intel relies on TSMC to make the most advanced processors.

The first Phoenix factory will make 4nm processors (developed from the 5nm originally announced) and production is scheduled to begin in 2024. The second factory will launch in 2026 and will produce 3nm chips, the smallest and most complex processors in production today.

TSMC said it will invest $40 billion in Arizona capacity, one of the largest foreign direct investments ever made in US manufacturing. The two factories will produce more than 600,000 wafers per year by 2026, and White House officials said this will be enough to meet all of the US demand for advanced chips.

Senior leaders from Apple, AMD and NVIDIA confirmed on Tuesday that they will be among the first customers to purchase chips from their new Arizona factory.

“TSMC has become the global platform on which the world tech industry is built,” said Jensen Huang, CEO of NVIDIA. “Bringing TSMC investment to the United States is a feat for the industry and a game-changing development.”

Secretary of Commerce Gina Raimondo, Arizona Senator Mark Kelly and other members of the Arizona Congressional delegation were also present at the ceremony. They were joined by business leaders such as Micron CEO Sanjay Mehrotra, Microchip CEO Ganesh Moorthy and TSMC founder Morris Chang.

TSMC customers have not disclosed how many chips they plan to purchase from these factories, but at 3nm and 4nm, Arizona chips will be more advanced than what they currently use. Apple’s A16 chips used in the iPhone 14 Pro and Pro Max and M2 chips for MacBooks are built with 5nm process technology.

Still, once these Arizona factories are up and running, TSMC will already be producing more advanced chips at facilities overseas. The company plans to produce 2nm chips by 2025. Nikkei Asia.

“The progress we’ve made with Apple Silicon has transformed our devices,” Cook said on Tuesday. “When you stop and think about it, what chip technology can accomplish is extraordinary. And now, thanks to the hard work of so many people, these chips can be proudly branded ‘Made in America’.”

The US is in the midst of a resurgence in semiconductor manufacturing, inspired in part by the complex supply chains of the covid epidemic. The vast majority of the world’s semiconductors are produced in Asia, and the United States produces about 10 percent of the world’s semiconductors.

Apple has spent the last few years working to expand its supply chain beyond China to avoid potential disruptions in the future. It currently manufactures some iPhones in India and is looking to expand MacBook and Apple Watch production to Vietnam. TSMC factories will not mean full-scale iPhone production in the US, but will provide critical components used in Apple products.

The semiconductor shortage has cost Apple nearly $6 billion in lost sales, and the company recently said it plans to buy more chips from European and US factories in response to supply problems.

Recently, American politicians have tried to shore up production to avoid reliance on other nations.

This restructuring power culminated in the CHIPS and Science Act, a legislative package that includes $52 billion for local chip manufacturing. Biden signed the bill in August, but the funding has yet to be paid off.

The Commerce Department will allocate the money through the “Chips for America” ​​program starting next year. Foreign companies will be able to take advantage of these incentives as long as they build production capacity in the US, and TSMC has already announced that it will apply for CHIPS funding.

America’s largest chipmaker Intel’s largest manufacturing facility is located in Chandler, a large suburb of Phoenix. The company is making progress on a $20 billion expansion of its Chandler campus, which will be fully operational in 2024.

Intel also plans to build “the largest silicon manufacturing center on the planet” in Ohio, starting with a $20 billion investment. Intel has yet to reveal exactly what it will build in Ohio, but production is expected to begin in 2025.

Micron, which makes memory and storage chips, said in October it would spend up to $100 billion to build a “megafab” in New York. In Texas, Samsung is investing $17 billion to expand its Austin facility in hopes of rivaling TSMC.

Chang, the founder of TSMC, said in his statements that he had dreamed of building in America for a long time, and the current president of TSMC, Mark Liu, has finally made this dream come true.

“My dream 25 years ago will now be fulfilled by Mark.”

Andy Blye’s photo.