Arizona TSMC plant: Governor claims it might be upgraded from a ‘paperweight’

Arizona TSMC plant | Construction work photo

After an analyst described the Arizona TSMC plant as a “paperweight” – due to the fact that all the chips it makes will have to be sent to Taiwan for the final stage of production – the state’s governor has claimed that this might change.

Governor Katie Hobbs said during a visit to TSMC in Taiwan that the state and the Apple chipmaker are “talking” about upgrading the capabilities of the plant …

Arizona TSMC plant: The story so far

The headline news last year made things sound like a major success for the US CHIPS Act, which was intended to encourage chipmakers to build American plants, helping the US economy and creating jobs for US workers. Apple proudly announced that it would be buying American-made chips for some of its devices.

The reality has been somewhat different. The plant will only be able to make larger process chips, only suitable for older Apple devices. TSMC demanded bigger subsidies and fewer rules. The project is behind schedule, and over budget, with production already pushed into 2025, from 2024. There is talk of US-made chips costing more than those made in Taiwan, which would mean Apple would likely buy only a token number of them.

US job creation was brought into question after TSMC decided to bring in around 500 Taiwanese workers to speed up construction work, and the battle over this quickly turned ugly.

The ‘paperweight’ claim

A report last week made it clear that the Arizona plant will be even less capable than previously known. Not only will it be able to make older chips, but it won’t even be able to complete production of these.

While Apple chips may be made in the US, they will still need to be sent back to Taiwan for packaging before they get anywhere near an Apple device.

Packaging is the name given to the process of placing the various circuit boards as close together as possible before encapsulating them into a single chip. For example, in the iPhone, the memory is placed directly on top of the processor to improve performance and reliability.

Packaging is an advanced process, and only TSMC’s Taiwan plants are able to handle it.

Governor claims this may change

Bloomberg reports on the latest development.

Taiwan Semiconductor Manufacturing Co. and Arizona authorities are talking about adding advanced chip packaging capacity to the chipmaker’s plants in the state, Governor Katie Hobbs said in Taipei on Tuesday.

The claim is as vague as can possibly be, and the fact that Hobbs simultaneously denied that construction of the plant is behind schedule doesn’t exactly lend confidence.

Arizona and TSMC are “working through some bugs,” Hobbs said, but she is “very impressed by the speed with which it has been built” and the project continues on schedule.

TSMC announced during its most recent earnings call that the plant will now begin operation in 2025 rather than 2024. I’m certainly not holding my breath for chip packaging capabilities to be added to the plant.

Photo: Saad Salim/Unsplash

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