TSMC's US Fab: Q1 2024 Trial Production, Multiple US Client Orders

Recent reports indicate that TSMC's Fab21 facility in Arizona, USA, has initiated the construction of a limited pilot production line. Anticipated to commence trial production in the first quarter of 2024, this milestone follows the collaborative efforts of multiple supply chain partners, providing essential equipment by the end of 2023.

It is noteworthy that, due to cost considerations, the initial acceleration of 4nm chip production capacity will experience a deliberate pace. Simultaneously, the second phase of production for 3nm chips is expected to see a gradual increase, potentially resulting in an overall adjustment of the anticipated output.

Among Fab21's U.S. clientele, noteworthy entities such as Apple and AMD are joined by NVIDIA CEO Jensen Huang, who has expressed interest in potentially placing orders with Fab21. Furthermore, there are reports suggesting Intel's contemplation of leveraging Fab21 for its production needs.

Insiders within the supply chain disclose that the decision by these U.S. industry leaders to engage with TSMC's Arizona facility is primarily in response to the U.S. government's requirements, albeit in limited quantities. Owing to the higher manufacturing costs and restricted capacity at TSMC's U.S. wafer fab, a significant proportion of the orders placed with TSMC continues to be fulfilled in Taiwan, China.

TSMC's announcement in 2020 regarding the establishment of Fab21 in Arizona had set expectations for official installation in the first quarter of 2024, with mass production slated to commence by year-end. However, facing challenges such as escalating inflationary pressures, surging construction costs, labor shortages, and the influential role of labor unions, combined with the U.S. government's delayed fulfillment of promised subsidies and preferential conditions, TSMC officially reschedules the commencement of mass production to 2025.