TSMC, the world’s top foundry, is set to delay the deployment of its second fab in Arizona by at least a year compared to the initial schedule, the company said this week. Furthermore, the company is also backtracking on its prior commitments of which nodes the factory would produce, so now it isn’t clear whether the Fab 21 phase 2 will make chips on its 3nm process technology or a different node. The delays and ambiguities about the project stem from uncertainties with demand as well as U.S. government decisions concerning subsidies.
“The second fab shell is under construction, but what technology [to use] in that shell is still under discussion,” said outgoing chairman Mark Liu at the company’s conference call with analysts and investors (viaSeekingAlpha). “I think that also has to do with how much incentives that fab, the U.S. Government can provide. […] The current planning [for the fab] is ‘27 or ‘28, that will be timeframe.”
When TSMCannouncedplans to increase investment in its Arizona site to $40 billion in total (up from $12 billion for 5nm/4nm-capable Fab 21 phase 1) in late 2022, it said that its Fab 21 phase 2 would be capable of making chips using its N3 family of process technologies (3nm-class) and would come online in 2026. It also indicated that the two Arizona fabs would feature a capacity of over 600,000 wafer starts per year (50,000 wafer starts per month).
Uncertainties with subsidies from the U.S. government under the CHIPS Act, as well as demand from its clients, apparently made the company delay the fab’s deployment by at least a year. As a result, now that the fab is coming online in 2027 or even 2029, and the company now questions whether it needs to build a 3nm-capable fab at the time, or rather equip it to make chips on its N2 (2nm-class) production technology or more advanced. Or perhaps, TSMC could opt for a more mature fabrication process.
“To be honest, most of the fab in overseas, what technology is being set up, really, it is a decision of customers’ demand in that area at that timing,” Liu said. “So, nothing is definitive, but we are trying to optimize value for the overseas fab for TSMC.”
There is good news, though. After facing multiple setbacks with Fab 21, its first advanced fab in the U.S., TSMC now firmly states that the facility is coming online in the first half of 2025.
“We are well on track for volume production of N4, or 4nm process technology, in the first half of 2025 [in Arizona] and are confident that once we begin operations, we will be able to deliver the same level of manufacturing quality and reliability in Arizona as from our fabs in Taiwan,” Liu stressed.
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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
