First Batch of NVIDIA, AMD, and Apple Chip Wafers Shipped from TSMC’s Arizona Plant, Report Reveals

Disclaimer: This does not constitute investment advice. The writer holds no shares in any of the specified stocks.

TSMC’s Arizona Facility: A Milestone in Semiconductor Production

A recent report from Taiwanese media reveals that the Taiwan Semiconductor Manufacturing Company (TSMC) has successfully rolled out its first batch of semiconductors from its Arizona facility. This site began operations in late 2022 and is focused on fabricating advanced chips utilizing the N4 process technology. Notably, among the initial products manufactured are NVIDIA’s latest Blackwell AI graphics processing units (GPUs), which feature a specialized version of the N4 process termed 4NP. This first production run has enabled TSMC to deliver approximately 20, 000 silicon wafers to its primary clients, including tech giants Apple, NVIDIA, and AMD.

Production of AMD’s Next-Gen EPYC Processors in Arizona

TSMC’s Arizona plant is capable of producing cutting-edge chips with advanced N4 technology, albeit requiring these chips to be shipped to Taiwan for packaging. Packaging plays a crucial role in the chip supply chain as it involves assembling silicon dies into fully integrated circuits (ICs), ready for installation on printed circuit boards and, subsequently, data center deployment. To counter this issue, TSMC has engaged in a partnership with US-based Amkor to enhance the advanced packaging capabilities within the US, though the initial batches will still be sent to Taiwan for further processing.

Packaging bottlenecks have significantly affected the AI chip market, but encouraging news reveals TSMC plans to ramp up its packaging capacity from 75, 000 units last year to 115, 000 units this year. This capacity expansion is particularly focused on CoWoS (Chip on Wafer on Substrate) packaging technology, with projections indicating a potential increase to 75, 000 packaging units by mid-2025.

Chip Production Overview and Future Plans

The initial chip production from the Arizona location has resulted in an output of 20, 000 wafers that include components for leading firms like NVIDIA, Apple, and AMD. These wafers are specifically tied to the production of NVIDIA’s Blackwell AI chips, which will undergo advanced packaging in Taiwan using CoWoS techniques. Additionally, the facility is responsible for producing Apple’s processors for its iPhone series as well as AMD’s upcoming fifth-generation EPYC data center processors.

The burgeoning demand for AI chip packaging has compelled TSMC to enhance its operational capacity, spurring growth and inviting competition from other industry players. Among them is Taiwan’s United Microelectronics Corporation (UMC), the second-largest contract chip manufacturer, which is collaborating with Qualcomm to deploy wafer-on-wafer (WoW) packaging technology.

Currently yielding chips with N4 technology, TSMC has ambitious plans for the future, aiming to extend its capabilities to manufacture 3-nanometer and 2-nanometer chips. This expansion will involve the construction of additional fabrication plants and an ultimate goal of establishing packaging processes within the US, thereby reducing the reliance on Taiwan for this essential step.

Source & Images