Apple's Chipmaker TSMC Announces Plan to Build Arizona Factory

[entropys]

(a) The number of wafers IS small. This is clearly a deal being done for politics; a minimum viable fab that's probably only going to actually happen as long as the promises from Arizona and the Federal Government go through. Will they go through? Well...
Pretty soon the Feds are going to have to write up the next budget, which is going to have a pretty large covid-shaped hole in it. Add to that some Dems complaining about money going to big corporations, and Repubs complaining about money going to foreigners, and I wouldn't regard it as 100% certain that this will happen.
(And don't forget that Intel will be working very hard behind the scenes to claim that they represent a perfectly good patriotic American company that should be getting those subsidies instead...)

There've been such rumors before; in 2012 the rumor was a TSMC plant to be started in New York. Of course this has moved beyond rumor to a press release; but it can still be stopped if AZ and the Feds don't offer up what they promised in a co-operative and timely manner.

(b) The existing TSMC facility in the US is REALLY out of date, like mid-90s state of the art. It's 8inch wafers, 160nm. Old fabs are still perfectly good for various purposes, but let's not blow it out of proportion. And it hasn't been upgraded much in all that time... Started at 350nm, now it's at 160 nm, so in the past 20 years TSMC hasn't seen a compelling *economic* reason to expand its US presence.

It's significant that this expansion is happening in AZ, not at the existing Washington State fab. Makes it look even more like this is primarily a political decision, one that will fall apart if the political/tax promises aren't delivered. Meanwhile, remember Foxconn and Wisconsin?

Yes it can be subsidy farming on the part of the corporation. politicians make it easy, as it isn’t their money they are throwing around.
It could also be that sometimes you are just better off starting again rather than refit existing infrastructure. Particularly if your current location has a Government too interested in heavy handed regulation.

 

[planteater]

Curious as to where in Arizona? I'd suspect Chandler AZ given that Intel, Microchip and other smaller chip designer and manufactures are already here.

The linked article says the spot has not been chosen yet, but the are looking at Phoenix.

Taiwan chipmaker plans to build $12 billion plant in Phoenix, create more than 1,600 jobs

A Taiwan-based maker of silicon chips intends to build a major manufacturing plant in Phoenix that could bring more than 1,600 jobs, Gov. Doug Ducey confirmed late Thursday.

www.azcentral.com

 

[Tech198]

Take that Intel *swipes hair back like a pro*

 

[nylonsteel]

too hot in az
but great mexican food

 

[cgsnipinva]

They make chips here. But they send the chips overseas for assembly. Building fabs here is incredibly expensive. And new fabs will be heavily automated and no longer generate the number of jobs they once did. Not by a long shot.
Even Intel's newest fabs(they are located near me) use a very high level of automation so they don't need as many people as they once did.
TSMC also pays poorly(I used to work there). Micron has plants here but they've slowly been selling them off over the years. I'm willing to bet this new TSMC fab never sees the light of day.
Even global foundry is selling one of their 300mm fabs to us for what amounts to pennies as they pull back.

The cost differential is going to be in construction - the cost of equipment will be the same (buy the same equipment here as in china or somewhere else). Arizona is also known for having very cheap electricity costs (Its like that in Virginia as well where we have three fab plants). Probably cheaper than even in china. So i doubt the differential in expense of building the plant is that much different. Plus we have better environmental standards than in China.

Your point on the final assembly is moot as that is the low value end of the process. The high end is the making of chips. Even assembly can be fully automated and the cost differential mitigated.

Now your point on automation is moot as the same level of automation is going to be implemented overseas as well to remain competitive.

The value of having the supply chain here is what's of value. Apple can have better control over its IP. Additionally, Apple has small R&D fabs where the make initial runs of their new chip designs - being able to go from there to a nearby plant to produce production chips is of benefit.

This is a good thing all around.
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(a) The number of wafers IS small. This is clearly a deal being done for politics; a minimum viable fab that's probably only going to actually happen as long as the promises from Arizona and the Federal Government go through. Will they go through? Well...
Pretty soon the Feds are going to have to write up the next budget, which is going to have a pretty large covid-shaped hole in it. Add to that some Dems complaining about money going to big corporations, and Repubs complaining about money going to foreigners, and I wouldn't regard it as 100% certain that this will happen.
(And don't forget that Intel will be working very hard behind the scenes to claim that they represent a perfectly good patriotic American company that should be getting those subsidies instead...)

There've been such rumors before; in 2012 the rumor was a TSMC plant to be started in New York. Of course this has moved beyond rumor to a press release; but it can still be stopped if AZ and the Feds don't offer up what they promised in a co-operative and timely manner.

(b) The existing TSMC facility in the US is REALLY out of date, like mid-90s state of the art. It's 8inch wafers, 160nm. Old fabs are still perfectly good for various purposes, but let's not blow it out of proportion. And it hasn't been upgraded much in all that time... Started at 350nm, now it's at 160 nm, so in the past 20 years TSMC hasn't seen a compelling *economic* reason to expand its US presence.

It's significant that this expansion is happening in AZ, not at the existing Washington State fab. Makes it look even more like this is primarily a political decision, one that will fall apart if the political/tax promises aren't delivered. Meanwhile, remember Foxconn and Wisconsin?

I doubt its solely a political decision - many companies even foreign ones are looking to diversity their supply chains aways from China as they are now being seen as a risk. Taiwan also understand the US is the key to their security and maintains their independence from a predatory Chinese communist state.

Given the existing fabrication base is in the US is significant and one of their biggest customers - Apple - is here. It also makes commercial sense.
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(a) The number of wafers IS small. This is clearly a deal being done for politics; a minimum viable fab that's probably only going to actually happen as long as the promises from Arizona and the Federal Government go through. Will they go through? Well...
Pretty soon the Feds are going to have to write up the next budget, which is going to have a pretty large covid-shaped hole in it. Add to that some Dems complaining about money going to big corporations, and Repubs complaining about money going to foreigners, and I wouldn't regard it as 100% certain that this will happen.
(And don't forget that Intel will be working very hard behind the scenes to claim that they represent a perfectly good patriotic American company that should be getting those subsidies instead...)



It's significant that this expansion is happening in AZ, not at the existing Washington State fab. Makes it look even more like this is primarily a political decision, one that will fall apart if the political/tax promises aren't delivered. Meanwhile, remember Foxconn and Wisconsin?

The article did not mention any federal money going to this. If there were tax breaks or subsidies it would be at the state level. And the article didn't even mention that. It seems your protecting something not based on fact.

 

[Zardoz2293]

Is it just me or does 20,000 chips per month seem pretty small?

That's 20,000 waffers, depending on the number of chips at the then chip type it would be in the neighborhood of 1,500,000 chips (A12 at 7nm ~ 83 chips per die, less those that don't meet QA).

 

[bn-7bc]

Post removed after reading rest of thread, the numbers got stupidly large baste on the over stated numbers in the post I originaly commented on

 

[DeepIn2U]

And, ideally, a start at getting some of the sub-assemblies (displays and such) made in North America.

Why is this important to actually happen within North America?
Whom will take the jobs at very low pay rate and potentially no job security or with benefits package or life insurance? This adds some serious costs to building a facility, custom machinery, maintenance of such machinery and of course training said new employees.

American's, let along Canadian's don't like working for a cheap dollar, if educated.

This factory is a fab facility which can last a few years before a complete overhaul maybe required. the IBM factory that made the PowerPC G5's and Power cpu's in Catskill, NY I'm not sure is even functioning since say 5yrs after Microsoft (Xbox 360/One), Apple (PowerPC Macs), or Sony ( I think the PS3 used some tech made there, though I'm unsure).

Yet an assembly plant for displays and other cellular components, I doubt would be worth the investment within USA. The 2013 Mac Pro .... that plant may have lasted 6yrs, but I'm guessing production dropped singificantly in the last 3yrs of it's lifespan. what's that assembly facility used for right now??

Where are those jobs now? How are families affected now?

If an assembly plant does come to the USA, let's pray its a very modular plant that can be quickly advanced/adjusted to the product needs being built therein ... you know to maintain jobs and the families that are supported with such jobs.

 

[cgsnipinva]

Why is this important to actually happen within North America?
Whom will take the jobs at very low pay rate and potentially no job security or with benefits package or life insurance? This adds some serious costs to building a facility, custom machinery, maintenance of such machinery and of course training said new employees.

American's, let along Canadian's don't like working for a cheap dollar, if educated.

This factory is a fab facility which can last a few years before a complete overhaul maybe required. the IBM factory that made the PowerPC G5's and Power cpu's in Catskill, NY I'm not sure is even functioning since say 5yrs after Microsoft (Xbox 360/One), Apple (PowerPC Macs), or Sony ( I think the PS3 used some tech made there, though I'm unsure).

Yet an assembly plant for displays and other cellular components, I doubt would be worth the investment within USA. The 2013 Mac Pro .... that plant may have lasted 6yrs, but I'm guessing production dropped singificantly in the last 3yrs of it's lifespan. what's that assembly facility used for right now??

Where are those jobs now? How are families affected now?

If an assembly plant does come to the USA, let's pray its a very modular plant that can be quickly advanced/adjusted to the product needs being built therein ... you know to maintain jobs and the families that are supported with such jobs.

Another canard. There are several industries that have moved from low cost developing countries like China and have done well in North American and European countries. If you leverage automation and business process engineering well - you can pay decent wages and attract labor. Briggs and Stratton has done it in the US moving activities from Mexico so has honeywell. Germany was losing manufacturing jobs to low cost countries to include china and has leveraged similar practices to do the same.

The Catskill plant in NY has been expanded with a 80 million investment in new equipment and capacity in 2019.

If we want to free ourselves from dependency on cheap products from a country that is an enemy of our own - we have to start learning and executing on plans like this. It is not impossible.

 

[NathanWind]

Arizona?!

Considering the heat that gets generated at pretty much any factory, it's an odd choice for green-promoting Apple when they're going to have to run massive air conditioning systems 24/7 for practically the entire year.

I should know. I've spent more than my share of time in that desert state.

 

[I7guy]

Arizona?!

Considering the heat that gets generated at pretty much any factory, it's an odd choice for green-promoting Apple when they're going to have to run massive air conditioning systems 24/7 for practically the entire year.

I should know. I've spent more than my share of time in that desert state.

Solar powered air conditioner? Yes it’s HOT in the summer.

 

[stylinexpat]

According to a lot of posters here on previous posts, it is impossible to manufacture here and you have to do it overseas.

Government partnered with them and supported them sort of like how China does this with manufacturers which manufacture in China.

 

[cgsnipinva]

Arizona?!

Considering the heat that gets generated at pretty much any factory, it's an odd choice for green-promoting Apple when they're going to have to run massive air conditioning systems 24/7 for practically the entire year.

I should know. I've spent more than my share of time in that desert state.

You would have to run cooling systems 24/7 for any facility -- even in upstate NY. Its part fo the manufacturing process.

Arizona is home to multiple chip fabs already. Electricity is cheap in AZ.

 

[IG88]

14,500 per wafer is way high. Your earlier number of 500 was likely much closer to correct. My own 200 number was definitely low.

Agreed. I think it's something around 500 per wafer.

Apple A13 & Beyond: How Transistor Count And Costs Will Go Up

As the seminconductor industry moves forward to 5nm, we look briefly at how recent advantages will impact Apple and the iPhone.

wccftech.com

 

[DeepIn2U]

Another canard. There are several industries that have moved from low cost developing countries like China and have done well in North American and European countries. If you leverage automation and business process engineering well - you can pay decent wages and attract labor. Briggs and Stratton has done it in the US moving activities from Mexico so has honeywell. Germany was losing manufacturing jobs to low cost countries to include china and has leveraged similar practices to do the same.

The Catskill plant in NY has been expanded with a 80 million investment in new equipment and capacity in 2019.

If we want to free ourselves from dependency on cheap products from a country that is an enemy of our own - we have to start learning and executing on plans like this. It is not impossible.

maybe not impossible, yet at what cost are those products have costed since the manufacturing moves? Has their revenues and profits dropped significantly since or are we waiting a full fiscal year to determine those affects?

is China an actual enemy to the USA?? How so, beyond owning 90% of the country’s debt? No wars, no battles, no movement of military towards China so in what way are they “the enemy”?

Yeah I’m full of questions.

 

[cgsnipinva]

maybe not impossible, yet at what cost are those products have costed since the manufacturing moves? Has their revenues and profits dropped significantly since or are we waiting a full fiscal year to determine those affects?

is China an actual enemy to the USA?? How so, beyond owning 90% of the country’s debt? No wars, no battles, no movement of military towards China so in what way are they “the enemy”?

Yeah I’m full of questions.

China does NOT own 90% of the US debt. Sigh.....facs people facts. 50% of the issuer debt is actually held within US government trust accounts (e.g. social security trust fund, highway trust fund etc). Of the remaining 50% 60% (30% of the total) is held internal to the US by financial institutions, insurance funds and individuals. 20% of the total is held outside the US - only 20%. Of that China hold about half or 10% of the total.

Ok now that we have gotten that out of the way--- China is an enemy to the US - they state so internally and are predatory mercantilists who focus on industries to take over. they steal our IP and copy it. They try to take over internaltional waters - as in the South China sea -- and the US has challenged them militarily by continuously sailing the 7th fleet in there to prove a point.

With regards to cost and financial performance of companies that have done so - this trend has gone on for years so it seems to be successful. IBM has done it, Mercedes Benz, Apple, Intel, Merck, etc.

Any increase in cost of manufacturing is worth it to secure our intellectual property and technology, secure our supply chain and keep China at bay. China has ambitions about making the world in its image a communist centralized authority which is the antithesis of the west. In my opinion - the west as founded -- is a bette place to live and I do not want to see that change. China is a threat, a fraud and a danger. Period end of story.

 

[name99]

China does NOT own 90% of the US debt. Sigh.....facs people facts. 50% of the issuer debt is actually held within US government trust accounts (e.g. social security trust fund, highway trust fund etc). Of the remaining 50% 60% (30% of the total) is held internal to the US by financial institutions, insurance funds and individuals. 20% of the total is held outside the US - only 20%. Of that China hold about half or 10% of the total.

Ok now that we have gotten that out of the way--- China is an enemy to the US - they state so internally and are predatory mercantilists who focus on industries to take over. they steal our IP and copy it. They try to take over internaltional waters - as in the South China sea -- and the US has challenged them militarily by continuously sailing the 7th fleet in there to prove a point.

With regards to cost and financial performance of companies that have done so - this trend has gone on for years so it seems to be successful. IBM has done it, Mercedes Benz, Apple, Intel, Merck, etc.

Any increase in cost of manufacturing is worth it to secure our intellectual property and technology, secure our supply chain and keep China at bay. China has ambitions about making the world in its image a communist centralized authority which is the antithesis of the west. In my opinion - the west as founded -- is a bette place to live and I do not want to see that change. China is a threat, a fraud and a danger. Period end of story.

Enemy is a problematic word...
Rival, sure. people are rivals, businesses are rivals, countries are rivals. Rivals compete, but also co-operate, and they know when to do which. Rivals can live with each indefinitely. Rivals settle differences via some sort of legal framework, not by naked uncontrolled violence.

Start talking about enemies and you're headed down that slippery slope where every damn thing, no matter how trivial, has the potential to become a pissing match, then a "show of resolve", then a "moral test", then a shooting war.
Berlin, Korea, Cuba -- we all (SHOULD) know the moments of the cold war that had the real potential to go nuclear; not to mention all those stupid pointless sub-nuclear (but perfectly deadly) wars around the world, from South America to Africa to Asia.
Why would a sane person try to restoke that fire? You think we'll be as lucky with the next three such confrontations?

 

[cgsnipinva]

Enemy is a problematic word...
Rival, sure. people are rivals, businesses are rivals, countries are rivals. Rivals compete, but also co-operate, and they know when to do which. Rivals can live with each indefinitely. Rivals settle differences via some sort of legal framework, not by naked uncontrolled violence.

Start talking about enemies and you're headed down that slippery slope where every damn thing, no matter how trivial, has the potential to become a pissing match, then a "show of resolve", then a "moral test", then a shooting war.
Berlin, Korea, Cuba -- we all (SHOULD) know the moments of the cold war that had the real potential to go nuclear; not to mention all those stupid pointless sub-nuclear (but perfectly deadly) wars around the world, from South America to Africa to Asia.
Why would a sane person try to restoke that fire? You think we'll be as lucky with the next three such confrontations?

Why would a sane person not recognize things as they are and prepare accordingly? China is already stoking this fire - if we stick our heads in the sand -- they will continue until a real confrontation is all but unavoidable. China is not an ally and has acted in such a manner as to endanger the world through its mishandling of the China Corona Virus and its attempt to conceal it as their people traveling to all parts of the world spread it.

At this point enemy seems to be a pretty accurate term.