The big picture: Taiwan Semiconductor Manufacturing Company’s (TSMC) Arizona factory project has become more apparent over the last few weeks. The company intends to move some of the most advanced node processing to the United States, much of it for Apple’s iPhones. The company will soon announce an upgrade to its plans.
Bloomberg sources say that TSMC will begin manufacturing on a 4nm process in Arizona in 2024. The decision marks an upgrade from the 5nm wafers the company previously planned to make there.
The silicon fabricator’s biggest customer — Apple — allegedly coaxed the chip manufacturer into the decision. The Cupertino tech titan usually gets first dibs on TSMC’s semiconductors for products like the iPhone. The iPhone 14 runs on the Taiwanese manufacturer’s 4nm silicon. The iPhone 15 — expected to launch in late 2023 — will use a 3nm process, which TSMC will also manufacture at the Arizona location sometime after the 4nm fab starts in 2024. So the new facility could bring a more significant share of iPhone production to the US.
Apple and TSMC confirmed the initial plans for the factories last month but haven’t officially revealed 4nm manufacturing plans for Arizona. The fab might also increase its capacity from the previously planned 20,000 wafers per month. Sources expect TSMC to formally announce the new roadmap when US President Joe Biden and Commerce Secretary Gina Raimondo attend a Phoenix ceremony next Tuesday.
The developments fit into US plans to decrease the chip reliance on China and Taiwan imports. Most of the globe’s semiconductors come from Taiwan’s TSMC factories, but China’s threats to annex and possibly invade the country have recently intensified.
Meanwhile, industry sources indicate that TMSC’s biggest competitor, Samsung, will make 3nm chips for multiple hardware companies. Having started 3nm manufacturing in June, Samsung will supply the silicon for Nvidia’s future graphics cards (following the RTX 4000 series), IBM’s upcoming CPUs, Qualcomm’s Arm smartphone chips, and Baidu’s cloud data centers.
However, TSMC will still be the biggest supplier of 3nm technology and might incur price increases through the node process. Recent reports suggest TSMC will sell 3nm wafers at $20,000 each — up from 5nm’s $16,000 per wafer.
The hikes are mainly due to rising manufacturing tool costs — another sign of the current global supply chain situation and the changing nature of Moore’s Law. Those factors, coupled with iPhone chips manufactured by highly-paid American labor, could increase future iPhone prices.