TSMC’s recent announcement regarding a $100B investment in the U.S. is significant, yet it fails to provide any concrete details—including whether some of these funds have been previously allocated.
New insights suggest this investment may even indicate a regression in the production of Apple chips in the U.S…
The Current Status
Apple first revealed its intentions for ‘Made in America’ chips in 2022, celebrating this as a key highlight of the U.S. CHIPS Act. This initiative includes constructing several TSMC chip manufacturing facilities in Arizona, with portions of the output dedicated to Apple chips for older models.
This project has encountered various delays and uncertainties. Initial plans for mass production at the first facility were set for last year but have been postponed to this year.
There were concerns about whether raw chips produced in the U.S. would need to be sent back to Taiwan for packaging—the process of integrating individual chips into the System-On-a-Chip configuration favored by Apple.
Additional worries surfaced regarding the promised employment opportunities in the U.S., as many positions were filled by recruits from Taiwan, leading to accusations of “anti-American discrimination.”
Uncertainties Surrounding the $100B Investment
The Trump administration had previously announced the $100B investment before TSMC’s confirmation, presenting it as new funding. However, given plans for multiple Arizona facilities, it remains uncertain if any part of this funding was already allocated even if not formally declared.
One new aspect appears to be the commitment to establishing chip-packaging facilities in the U.S. Previously, it was anticipated that this task would be outsourced to another company, Amkor. However, it’s possible this simply relocates the packaging process from one U.S. facility to another.
Potential Setback for U.S. Apple Chips
Historically, a major limitation of this arrangement is that Apple depends on TSMC’s most advanced manufacturing processes, which are exclusively available in its Taiwanese facilities. The plan was never to relocate the most efficient processes to the U.S., meaning the Arizona facilities would primarily produce chips for older Apple devices, remaining a few generations behind their Taiwanese counterparts.
Apple analyst Ming-Chi Kuo indicates that the recent agreement may involve the loss of one advanced manufacturing facility, further constraining the ability to produce Apple chips domestically.
TSMC’s newly announced investment strategy in the U.S. involves cutting back on one advanced-node fab while adding an advanced packaging plant and R&D center.
This could lead to a decreased supply of chips, even for older Apple devices, manufactured in the U.S.
Kuo also mentions that the proposed expenditure is “flexible.”
Although the $100 billion investment sounds substantial, the lack of detailed information allows for adaptable spending in response to future circumstances.
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Photo by 愚木混株 cdd20 on Unsplash
