U.S. Subsidy for TSMC Has AI Chips, Tech Leadership in Sight

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U.S. subsidies for Taiwan Semiconductor Manufacturing Co. (TSMC) will yield the nation's first production of AI chips and a strong shot at tech leadership, according to analysts surveyed by EE Times. The experts caution that a workforce shortage remains a key downside for the revival of the U.S. semiconductor industry.

www.eetimes.com/, Apr. 15, 2024 – 

After the U.S. Department of Commerce last week announced a CHIPS Act plan for $6.6 billion in grants and up to $5 billion in loans for TSMC, the world's top chip foundry said it will build a third fab in Phoenix, Arizona, raising its total investment in the U.S. to $65 billion from the previous $40 billion. The company said the new "Fab 3" will make chips with process tech that's 2 nm and below, strengthening U.S. economic and national security. The chips will be vital to AI, U.S. Commerce Secretary Gina Raimondo said during an interview on CNBC.

"AI runs on 2 nm," Raimondo said on CNBC. "TSMC is saying they are going to start making this at scale."

The top customers of TSMC include American companies like AI leader Nvidia, as well as Apple, AMD and even TSMC rival Intel.

TSMC implied that those customers will soon use the Phoenix fab to source chips and "derisk" their supply chains from dependence on Asia.

"Thanks to the bipartisan CHIPS Act, TSMC will now be making advanced AI GPUs and related processors right here in America," Peter Cleveland, a TSMC VP, said in a post last week on LinkedIn.

The latest CHIPS Act investments in TSMC and Intel have "put the U.S. on the path to a secure and trusted supply chain," TechInsights senior research fellow Dan Hutcheson told EE Times. "But there's still a lot of work to be done–particularly on the workforce side."

Workforce issues that have delayed TSMC's ramp to production in Arizona will potentially affect other chipmakers like Intel that are expanding in Phoenix, according to Paul Triolo, who advises global tech clients at Albright Stonebridge Group.

"The big unresolved issue for TSMC, Intel and other advanced manufacturing and supply chain players investing heavily in the Phoenix region is workforce," Triolo told EE Times. "Water and power are not real issues–TSMC recycles all of the water it uses, and there is sufficient power in the area. The challenge is finding a qualified cadre of advanced companies capable of providing support for installation and ongoing support."

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