TSMC to start commercial semiconductor production in Phoenix soon

The company behind Arizona's largest semiconductor investment ever said it now plans to start commercial production at its north Phoenix complex earlier than expected — a sign of progress at the massive $65 billion complex.

Taiwan Semiconductor Manufacturing Co. said commercial production of chips in Phoenix will start at the "beginning of 2025" rather than during the first half of next year, as it previously indicated. The company's CEO also said semiconductor production in test runs at the facility has been of good quality.

The update on TSMC's Arizona complex came during an earnings announcement earlier Thursday during which the Taiwan-based corporation, the most valuable company in East Asia, said it earned a whopping $10 billion profit on $23.5 billion in revenue during the quarter ending Sept. 30.

TSMC's CEO and chairman, C.C. Wei, also said the company is making progress in Arizona, after what some critics deemed a delayed start, with the company continuing to receive a solid commitment from government entities here.

"In Arizona, we have received the strong commitment and support from our U.S. customers" as well as from Phoenix, Arizona and federal officials, he said, adding that TSMC has "made significant progress in the past several months."

Officials representing Arizona and Phoenix courted the company for seven years before it finally announced in 2020 that it would build the giant complex here.

Wei said the cleanroom areas of the Phoenix complex will be roughly double that of comparable facilities, without providing further details. Cleanrooms are the critical locations where semiconductors are made and feature extensive filtration systems to keep out dust partices that can cause the electrical connections within chips to fail.

"We now expect volume (or commercial) production of our first fab to start in the beginning of 2025 and are confident (we can) deliver the same level of manufacturing quality and reliability from our fab in Arizona as from our fabs in Taiwan," Wei said.

TSMC's update on its Phoenix operation came two days after Intel, the other large semiconductor manufacturer in metro Phoenix, announced the layoffs of 385 employees here. Both TSMC and Intel are in line for billions of dollars in federal funding under the CHIPS and Science Act — up to $8.5 billion in grants for Intel and $6.6 billion for TSMC — as Arizona assumes a critical role in this important industry.

TSMC's second factory or fab at the site near Dove Valley Road and 43rd Avenue will utilize more advanced technologies and will begin high-volume commercial production in 2028, and the third Phoenix factory will do so around the end of the decade, Wei said.

"TSMC will continue to play a critical and integral role in enabling our customers’ success, while remaining a key partner and enabler of the U.S. semiconductor industry," he added.

Semiconductors are used in myriad products including cell phones, computers, vehicles, military weapon systems, medical equipment and more. Apple is TSMC's largest customer, and U.S. companies account for roughly two-thirds of the Taiwan company's revenue.

Despite the impressive quarterly earnings report, Wei cautioned that semiconductor-manufacturing costs have increased for all producers including TSMC. But he also pledged the company will remain an "efficient and cost-effective" manufacturer using the most advanced technologies to support its customers.

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