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Apple’s Made-in-Arizona chips will still require packaging in Taiwan
Monday, September 11, 2023 4:10 pm

Apple’s chip fabricator TSMC is building an Arizona facility that’s been pitched as lessening reliance on foreign chipmaking facilities — specifically those in Taiwan, which has been under threat of a blockade or even takeover by China.

In December last year, Apple CEO Tim Cook traveled to Phoenix, Arizona to visit a highly touted multi-billion-dollar factory TSMC was constructing and said the facility would produce chips for the company.

Wayne Ma for The Information:

But Cook avoided speaking an uncomfortable truth: The Arizona factory—which has been a focal point of the Biden plan and will cost $40 billion to build—will do little to make the U.S. self-reliant in chips. That’s because many advanced chips made in Arizona for Apple or other customers such as Nvidia, AMD and Tesla will still require assembly in Taiwan in a process known as packaging, according to interviews with multiple TSMC engineers and former Apple employees.

TSMC has no plans to build a packaging facility in Arizona or elsewhere in the U.S., mainly due to the high costs associated with such a project, the TSMC employees said.“The TSMC Arizona fab is effectively a paperweight in any geopolitical tension or war [with China over Taiwan] due to the fact that it still requires sending the chips back to Taiwan for packaging,” said Dylan Patel, chief analyst at SemiAnalysis, a semiconductor research firm.

The revelation shows how TSMC’s Arizona facility — which will employ 4,500 people across two factories when it begins mass production in 2025 — may serve to score political points but doesn’t reduce America’s reliance on Taiwan.

“The TSMC Arizona fab is effectively a paperweight in any geopolitical tension or war [with China over Taiwan] due to the fact that it still requires sending the chips back to Taiwan for packaging,” said Dylan Patel, chief analyst at SemiAnalysis, a semiconductor research firm.

MacDailyNews Take: If the urgent need arises for packaging outside of Taiwan, there’s no better partner for TSMC to have than Apple when costs are high.

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https://macdailynews.com/2023/09/11/apples-made-in-arizona-chips-will-still-require-packaging-in-taiwan/