TSMC's Arizona chip plant nears Apple approval, but will never rival Taiwan

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in iPhone edited January 14

After four years of planning, TSMC is now finally going to make older iPhone processors in the US, but it's not and never will be a true return to American manufacturing.

TSMC's Arizona facility grapples with rising costs & logistical hurdles
TSMC's Arizona facility will soon begin shipping A16 processors for Apple



It was back in 2020 when pressure over taxes made firms look again at manufacturing in the US, and TSMC announced it would build a processor plant in Arizona. By 2022, that expanded to plans for a second plant -- and Tim Cook pledged that Apple would use processors made in Arizona.

Now after reportedly starting its first production run in September 2024, TSMC USA is about to reach a key milestone. According to Nikkei Asia, Apple is now in the process of officially certifying and verifying the processors.

Once this quality assurance stage is met, TSMC Arizona is expected to deliver mass-produced processors shortly. They may even begin shipping in Apple devices as soon as the current quarter.

Just not flagship devices now, and likely not ever.

New American jobs



Politically, it's all a victory for the US which can say that it has successfully brought manufacturing back into the country after decades of it being done overseas. Then, too, there is the issue of TSMC bringing new jobs to the States -- though not as many as thought, since the company doesn't seem to value American workers.

There's also the issue of allegedly unsafe working conditions for construction workers during the build. Reportedly, there have also been fatalities on site.

Those conditions may yet continue as TSMC builds its second plant, too. For now, though, the first plant is operational, it's going to provide A-series processors, and so it's all got to be good news.

A political step, but mostly pointless



Asked in 2018 about US manufacturing of Apple's products, Tim Cook talked up how much it was already doing. At that stage, iPhone display glass was being made in Kentucky, and Face ID for the then-new iPhone X was to be made in Texas.

"We know that Apple could only have been created in the United States," Cook said. "We love this country. We're patriots. This is our country. [We want] to create as many jobs in the US as we can."

Flash forward to today, and thanks to a $6.6 billion subsidy under the Chips Act, Apple processor manufacturing is starting up in the US. This subsidy is likely the only reason that TSMC is in Arizona.

It's just always going to be behind TSMC's operations in Taiwan. At present, it's likely that each processor made in Arizona, will have to be shipped to Taiwan and China for packaging, the last stages of production.

That will change as Apple has announced that it will package the TSMC Arizona processors at a nearby plant in Peoria. But that packaging is to be done in a purpose-built Amkor plant, which will not be ready until 2027.

There was a joke in the UK in the 1980s where it was said that the only thing actually manufactured in the country were little signs that said "Made in UK." The work in Arizona is vastly more significant than that, and it is genuine manufacturing, which is good.

What it does not do, is change Apple's need for most of its manufacturing to be done outside of the US.

Then at present, the Arizona is chiefly producing the A16 processor. That was used in the iPhone 14 Pro, but now is limited to the iPhone 15, and iPhone 15 Plus.

Most recently, it's been reported that this first plant is also making the Apple Watch SiP (System in Package), so it is presumably capable of being used to make different processors. Whether it will or not is a different story.

The second plant, now expected in 2028, had better be able to since Apple will not be selling any A16-based iPhones by then.

Problems manufacturing in the US



Apple has been trying to manufacture in the US since long before the current US/China trade tensions. In 2012, it announced that the cylindrical Mac Pro would be built in the States, for instance.

At the same time, some iMacs were shipping with labels saying they had been "Assembled in USA."

But America no longer has the kind of manufacturing base that's needed for complex projects. That 2021 Mac Pro build was held up, for instance, by the difficulty in sourcing a particular custom screw that was simple to buy in China.

When Apple came to redesign the Mac Pro in 2019, it moved manufacturing back to China -- for a time. That was reported in June of 2019, and by November of the same year, Tim Cook was showing then-president Trump how the Mac Pro was being made in Texas.

It's not clear how many of the Mac Pro were made in the US, just as it's not known how many processors will be made at TSMC's new plant in Arizona.

What is clear and what is known is that even once Apple can package processors in Arizona, it will still have to ship the chips to other countries for the rest of manufacturing of its devices.

It would be unfair to describe the Arizona chip plant as solely a public relations job or just a money grab by TSMC -- but it isn't in any way hugely significant.



Read on AppleInsider

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Comments

  • Reply 1 of 16
    Why is it we can't reproduce this infrastructure?   It seems like it is more a matter of will, then not being able to do it?
    killroywatto_cobra
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  • Reply 2 of 16
    neoncatneoncat Posts: 172member
    Why is it we can't reproduce this infrastructure?   It seems like it is more a matter of will, then not being able to do it?
    Are you a parent? If so, ask your children: Do they aspire to work in a factory—a very modern and clean factory, but still a factory—doing highly repetitive, detail-oriented engineering assembly work that requires specific trade education, for 12 hour shifts, and living in factory-housing along with tens of thousands of other employees? 

    The answer to that is why there is zero chance of skilled tech assembly ever coming to the U.S. beyond performative efforts like the TSMC plant in Arizona and little dog and pony shows like Apple building low-volume Mac models in Texas. We would need an entire generation of young adults to opt into that career path to make specialized manufacturing viable.
    edited January 14
    danoxkillroyblastdoorronnwatto_cobra
     2Likes 3Dislikes 0Informatives
  • Reply 3 of 16
    hodarhodar Posts: 372member
    Never is a very long time.
    nubusdanoxkillroydewmeblastdoorsconosciutowatto_cobra
     7Likes 0Dislikes 0Informatives
  • Reply 4 of 16
    hodar said:
    Never is a very long time.
    So true
    watto_cobra
     1Like 0Dislikes 0Informatives
  • Reply 5 of 16
    JinTechjintech Posts: 1,085member
    neoncat said:
    Why is it we can't reproduce this infrastructure?   It seems like it is more a matter of will, then not being able to do it?
    Are you a parent? If so, ask your children: Do they aspire to work in a factory—a very modern and clean factory, but still a factory—doing highly repetitive, detail-oriented engineering assembly work that requires specific trade education, for 12 hour shifts, and living in factory-housing along with tens of thousands of other employees? 

    The answer to that is why there is zero chance of skilled tech assembly ever coming to the U.S. beyond performative efforts like the TSMC plant in Arizona and little dog and pony shows like Apple building low-volume Mac models in Texas. We would need an entire generation of young adults to opt into that career path to make specialized manufacturing viable.
    You forgot to mention pay. On average Foxconn workers in Zhengzhou make $3.55 an hour and average about $409.22-$545.63 a month.
    ronnwatto_cobra
     2Likes 0Dislikes 0Informatives
  • Reply 6 of 16
    badmonkbadmonk Posts: 1,341member
    In TSMC’s principal chip manufacturing complex in Taiwan, new PhD(!) chip engineers work the night shift.  People do not understand the scale and complexity of these operations.
    ForumPostronnwatto_cobra
     2Likes 0Dislikes 1Informative
  • Reply 7 of 16
    thttht Posts: 5,813member
    Why is it we can't reproduce this infrastructure?   It seems like it is more a matter of will, then not being able to do it?
    Tim Cook says the USA doesn't have the necessary number of manufacturing engineers to support the speed of manufacturing development they want. It's not assembly line workers. It's engineers to design, run, verify processes (QA et al), engineers to design, make and change the assembly line. Then, there is the anecdote that the supply chain to support electronics mass manufacturing at speed and scale is poor in the USA. The screw in the 2013 Mac Pro is the highlighted example. This could be true for everything that goes into a computer: resistors, capacitors, cabling, machines, so on and so forth.

    The human line workers is basically the easiest thing to source, almost anywhere. It's the professional workforce that makes it all happen that is really hard. The USA has to actively promote the field with making educational degrees in it cheap to free, provide even more incentives to build manufacturing plants here, so on and so forth.

    The chicken or the egg problem. It's only solved with a sugardaddy sinking a lot money into it, year over year over year, to build up the capability and capacity. The USA has a bipolar government, so if it is not done in a 4 to 8 year time frame, progress is slow, there isn't any progress, or it is reversed. Counting the companies to do it obviously doesn't work.
    neoncatdewmeronnwatto_cobra
     3Likes 1Dislike 0Informatives
  • Reply 8 of 16
    danoxdanox Posts: 3,516member
    tht said:
    Why is it we can't reproduce this infrastructure?   It seems like it is more a matter of will, then not being able to do it?
    Tim Cook says the USA doesn't have the necessary number of manufacturing engineers to support the speed of manufacturing development they want. It's not assembly line workers. It's engineers to design, run, verify processes (QA et al), engineers to design, make and change the assembly line. Then, there is the anecdote that the supply chain to support electronics mass manufacturing at speed and scale is poor in the USA. The screw in the 2013 Mac Pro is the highlighted example. This could be true for everything that goes into a computer: resistors, capacitors, cabling, machines, so on and so forth.

    The human line workers is basically the easiest thing to source, almost anywhere. It's the professional workforce that makes it all happen that is really hard. The USA has to actively promote the field with making educational degrees in it cheap to free, provide even more incentives to build manufacturing plants here, so on and so forth.

    The chicken or the egg problem. It's only solved with a sugardaddy sinking a lot money into it, year over year over year, to build up the capability and capacity. The USA has a bipolar government, so if it is not done in a 4 to 8 year time frame, progress is slow, there isn't any progress, or it is reversed. Counting the companies to do it obviously doesn't work.

    Basically explains the demise/collapse, of the UK industries and it appearsAmerica and all the other English-speaking countries in the world are going down the same path it can’t be done give up or never try, and it also explains the demise of US steel give up don’t make anything in country move to a cheaper country or just quit, that seems to be the answer of modern American companies and apparently with a lot of citizens too.

    And it appears that Germany is starting to go down that same deindustrializing yourself pathway.
    neoncatronnwatto_cobra
     1Like 2Dislikes 0Informatives
  • Reply 9 of 16
    It seems that fabs more focused on the type of research and development that universities do is more fitting for the US than mass production.
    williamlondonwatto_cobra
     1Like 1Dislike 0Informatives
  • Reply 10 of 16
    thttht Posts: 5,813member
    It seems that fabs more focused on the type of research and development that universities do is more fitting for the US than mass production.
    We, the USA, needs to have state of the art CMOS mass production capacity. The problem is that Intel fucked up. Options are limited. Keep Intel afloat or have TSMC/Samsung build local fabs. 

    One of the reasons TSMC built this facility in Arizona is because Intel has been operating there for about 40 years. They have an existing and local skills base, training and supply chain. 

    Since TSMC N5/N4 is different and more advanced than Intel 7nm to 14nm, everyone still needs to be trained, and TSMC still has to have Taiwanese engineers come over to get the fab working. 

    This will be true for all foreign manufacturing plants. If you want it to get up and running fast, you aren’t doing it with people who have never done it before. You are doing it with people who have several cycles under their belt. Batteries, solar PV, anything. 

    It’s not assembly line workers. It’s the manufacturing engineers and the supply chain for the plants. 
    ronnbaconstangwatto_cobra
     2Likes 0Dislikes 1Informative
  • Reply 11 of 16
    Pip pip! I say, good sir, harumph!
    williamlondon
     0Likes 1Dislike 0Informatives
  • Reply 12 of 16
    blastdoorblastdoor Posts: 3,671member
    sconosciutoronnwatto_cobra
     2Likes 0Dislikes 1Informative
  • Reply 13 of 16
    blastdoorblastdoor Posts: 3,671member
    Why is it we can't reproduce this infrastructure?   It seems like it is more a matter of will, then not being able to do it?
    In the 90s the US had just won the Cold War and we believed we were invincible. We thought free trade would always work to everyone’s mutual benefit.

    Those were not crazy thoughts. They weren’t entirely wrong, either. But our leaders were focused on relatively short term benefits to trade while the Chinese were playing the long game. And we did not appreciate the degree to which their “long game” was not to become more democratic, but rather to make authoritarianism great again. We could have all gotten rich together, but that’s not what the CCP wanted. They wanted to rebuild an empire.

    Ross Perot’s warnings about NAFTA were wrong, but if he had made those warnings about China he would have been closer to right. Our industrial base was hollowed out by a deliberate multi decade effort by the Chinese to do exactly that.

    The “never” in the title of this article is consistent with the kind of thinking that made that hollowing out possible. In the 90s, it seemed such a thing could ‘never’ happen. But now we find ourselves living in “never.’ 

    The bright side is that we can reverse this decline and the CHIPS Act is an example of how to do it. Despite this article’s negative tone, this fab in Arizona is a big deal. With continued efforts, we can rebuild our industrial base. 


    sconosciutoronnwatto_cobra
     3Likes 0Dislikes 0Informatives
  • Reply 14 of 16
    blastdoorblastdoor Posts: 3,671member
    neoncat said:
    Why is it we can't reproduce this infrastructure?   It seems like it is more a matter of will, then not being able to do it?
    Are you a parent? If so, ask your children: Do they aspire to work in a factory—a very modern and clean factory, but still a factory—doing highly repetitive, detail-oriented engineering assembly work that requires specific trade education, for 12 hour shifts, and living in factory-housing along with tens of thousands of other employees? 

    The answer to that is why there is zero chance of skilled tech assembly ever coming to the U.S. beyond performative efforts like the TSMC plant in Arizona and little dog and pony shows like Apple building low-volume Mac models in Texas. We would need an entire generation of young adults to opt into that career path to make specialized manufacturing viable.
    Manufacturing does not inherently or inevitably involve 12 hour shifts, living in factory housing, or highly repetitive work. That’s just the Chinese model.

    If manufacturing returns to the US it will be highly capital intensive (robots/machines), not labor intensive. The role for humans will be almost the opposite of what you describe. Humans will design processes and trouble shoot. They will repair machinery. For people who prefer hands-on work and problem solving, these could be very satisfying jobs. 
    baconstangwatto_cobra
     2Likes 0Dislikes 0Informatives
  • Reply 15 of 16
    avon b7avon b7 Posts: 8,103member
    blastdoor said:
    Why is it we can't reproduce this infrastructure?   It seems like it is more a matter of will, then not being able to do it?
    In the 90s the US had just won the Cold War and we believed we were invincible. We thought free trade would always work to everyone’s mutual benefit.

    Those were not crazy thoughts. They weren’t entirely wrong, either. But our leaders were focused on relatively short term benefits to trade while the Chinese were playing the long game. And we did not appreciate the degree to which their “long game” was not to become more democratic, but rather to make authoritarianism great again. We could have all gotten rich together, but that’s not what the CCP wanted. They wanted to rebuild an empire.

    Ross Perot’s warnings about NAFTA were wrong, but if he had made those warnings about China he would have been closer to right. Our industrial base was hollowed out by a deliberate multi decade effort by the Chinese to do exactly that.

    The “never” in the title of this article is consistent with the kind of thinking that made that hollowing out possible. In the 90s, it seemed such a thing could ‘never’ happen. But now we find ourselves living in “never.’ 

    The bright side is that we can reverse this decline and the CHIPS Act is an example of how to do it. Despite this article’s negative tone, this fab in Arizona is a big deal. With continued efforts, we can rebuild our industrial base. 


    With multiple decades of dollar hegemony it's fair to say that the US never really had free trade as a goal.

    It created its own empire and with the fall of the Soviet Union, it felt empowered in a mostly uni-polar world. 

    The question is if the empire status was abused. Over the coming 10 to 20 years we will see that answered.

    In that time the world will, and without doubt, become multi-polar and a new empire will arise. 

    How the US reacts to the inevitable is up for interpretation. 

    Subsidies are fine (the norm even) but the costs are there. In the case of TSMC they made it clear from the outset that chips made in the US would be more expensive than the same kind of Chips made elsewhere. That is a trade disadvantage. 
    edited January 15
    watto_cobra
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