TSMC begins producing 4-nanometer chips in Arizona
(reuters.com)418 points by heresie-dabord 8 days ago
418 points by heresie-dabord 8 days ago
Packaging isn't done by TSMC.
Packaging is extremely low value and commodified, so companies prefer to contract it out to OSATs like Amkor.
Same reason why most companies became fabless - margins are much more competitive this way compared to owning your own fab.
This margin-oriented mindset is arguably one of the driving factors that makes the US lose its industrial base.
No, its a global product silicon chips, america ships em to 100+ countries and will lose its edge if it doesnt stay at the top.
Margins are crucial for this, the driving factor that made US lose its industrial base, is red-tape, red-tape, red-tape, red-tape, political interference, militant unionism (unions are good and fine, militant unions are not), and foolish gov laws which did not make sure that labour standards are consistent for all products in american market, to make sure slave-labour or extremely shoddy labour standard based countries do not erode away great american jobs and its industrial base.
Margins are fine, and good. Unfair competition, rules and red-tape for domestic manufacturers but none for foreign companies, is what killed it.
It’s cheaper for a chinese company to ship to american households than it is for a local american company to an american household… , this is purely because of crazy gov regulations.
Indeed, Apple* seem to be one of the only companies with the long term vision to integrate vertically and improve industry as a result. The short term pennies-on-the-dollar of outsourcing is just brain-dead and non-innovative.
*this is an observation from someone who has never bought a new apple product due to their increasingly closed eco-system
odd that you're not an Applehead but still think they're somehow "improving" the industry.
perhaps you mean "they provide competition among peers like Samsung and Sony, without which the industry would go slower, perhaps with worse products"?
ah, just noticed that you qualified "bought a new Apple..."
It's interesting to me that this is in Phoenix. Does that mean good things for the city? I thought they were in a desert and running out of water, and not well positioned for climate change. On the other hand, maybe with more solar panels, electricity and manufacturing will be cheaper there in the future?
There's no problem with residential water use in Phoenix. There are still farms that could be shut down if water is needed.
The biggest problem seems to be parochial NIMBYs. People don't like that TSMC needed to bring in Taiwanese workers to staff up the plant. They are currently posting AI generated renderings of factories with billowing smoke stacks when talking about the proposed Amkor semiconductor packaging plant in Peoria.
It’s also worth nothing that the TSMC plant is basically as far north as it’s possible to be while still counting as part of the (huge) Phoenix metro area. The vast majority of the 5 million residents of that metro area are nowhere near the plant and very unlikely to be affected by it in any way.
> There are still farms that could be shut down if water is needed.
Wow, that's good, glad you clarified that.
I was worried there weren't any farms that could be shut down if water is needed.
Can you imagine a world where we can't shut down farms to produce 4nm chips?
I am just so glad we can shut down farms to produce chips.
Farms are useless, but chips, we need it for the control grid. I am just glad we are all on the same page.
Who needs food when you have 4nm chips.
At least the fabs can recycle the majority of their water. Unlike farms which use more than is needed and are likely producing animal feed for international animals.
I get your point, but not all farms are created equal. Is it really so bad to shut down farms that grow feed for Arab race horses to produce computer chips?
Arizona and California have outdated water management laws that basically mean that big agriculture gets free water.
Until recently Saudi Arabia was using these laws to grow alfalfa in the desert.
In California, water intensive crops like almond trees get free water.
https://www.nytimes.com/2023/10/03/climate/arizona-saudi-ara...
This is an extremely over-simplified take. It depends on entirely on what the farms are producing, their water efficiency, etc. Nobody would seriously suggest that people go hungry so that we can have more chips, so responding as if that's the actual suggestion is unwarranted.
The place is a desert. Growing crops in a desert takes a lot of water, as you might imagine. A smarter thing to do is to not try to grow crops in a desert where it needs so much irrigation. The US has plenty of non-desert land for growing essential crops.
Lots of the farms exist to provide year around salad. What is more important, year around salad or computer chips? Economically, for Arizona, the answer is pretty clear.
This is also why I laugh when people in wet areas talk crap about my state's water problem. My state's problem is your problem too buddy.
Also, eating raw salad veggies (lettuce in particular) is one of the best ways to get foodborne illnesses like E. Coli.
Water in the fabs gets mostly recycled. There’s an old slidedeck from Intel’s Chandler (Phoenix metro area suburb) fab about it. This includes discharging what isn’t recycled to refill ground aquifer.
From what I understand, the area is more seismically stable, so the special building structures and equipment for more seismically active places are not needed.
There is the presence of ASU. The ASU president had been hired a while back to implement a very different kind of university system focused on broadening (not gate keeping) higher education and building up innovation. This includes both improving graduation rates in the traditional tracks and expanding non-traditional educational tracks. I don’t know if all those were considered by TSMC; they like hiring engineers straight out of college and training them in their methods.
Phoenix the city is limited by its existing water rights but the geographical area isn't really that constrained; water rights are just held by private parties, particulaly farmers. ~70% of all water used in the state is used in agriculture. Industrial and residential consumers simply have to purchase those rights if they want to continue to expand in the area and chip making is a high value add industry.
Is there any historical reason why farming is a big industry in a state associated with deserts? Did manufacturing never take root there until after WW2 when air conditioning became more affordable?
Before Phoenix the city was founded, there was a canal built by the indigenous people who live there in the lower Sonoran.
That canal became the basis for Phoenix, and eventually, the big canal that transport water long range through the state.
The other is that, with sufficient water, you can grow year round.
Not that I think industrial ag is good for society.
Phoenix itself is a metro area whose primary economic driver is real estate speculation. Many older citrus orchards has been surrounded, and sometimes bought and redeveloped.
It's sunny for a lot of the year. Ex. you can get an extra harvest of alfalfa per year compared to other climates.
Farming isn't really that large of an industry in Arizona today, maybe 2% of GDP tops. But my understanding is that surface water rights were allocated over a hundred years ago and naturally those rights were allocated to the people that wanted them then, i.e. agricultural landowners.
> Is there any historical reason why farming is a big industry in a state associated with deserts?
California is a desert too.
I am sure that some people will question some of the historiography there, but Cadillac Desert is a book all about the history of water management of the great plains, from Kansas onwards.
TLDR: America has spent a whole lot of money trying to make land more productive for farming, including land where it probably doesn't make much economic sense once you account for the infrastructure costs.
Both are true.
Looks like the fab requires about 40,000 acre-ft/yr of water. If they really do start running out of water, adding desal of AZ's brackish aquifers would cost the fab about $20m/year. Not really worth it for farming, but completely fine for a fab.
>40,000 acre-ft/yr of water
... is "acre feet" a common measurement of volume in the USA?
Makes sense, since we usually measure rainfall in inches, it's pretty easy to look up weather records for an area to see what the minimum annual rainfall is expected to be.
https://en.m.wikipedia.org/wiki/Acre-foot
> The acre-foot is a non-SI unit of volume equal to about 1,233 m3 commonly used in the United States in reference to large-scale water resources, such as reservoirs, aqueducts, canals, sewer flow capacity, irrigation water,[1] and river flows.
Seems to be.
Specifically in the desert west, yes.
We measure our land in acres and water is the limiting resource for using it. Water requirements for crops are expressed in feet/year (or inches/day). Combine the two and you get acre-feet.
m^3 would be a less useful unit in terms of calculating water needs out here, the metric equivalent would be hectare-meters (10,000 m^3).
I live here and we are definitely looking toward impending water shortages, and no one care at all. Nestle is in the process of building a 200 acre coffee creamer factory. The major flower delivery services grow their flowers here. We have tons of cotton and alfalfa fields. There are 100s of golf courses and in the wealthier areas everyone has a lush green lawn.
They sold land rights to the Saudis who then siphoned off the water (now revoked said rights).
"[The Saudis] used sprinklers to grow alfalfa in La Paz County and exports it to feed dairy cattle in Saudi Arabia. The company did not pay for the water it used under the old agreement."
https://www.cbsnews.com/news/saudi-arabia-water-access-arizo...
Water rights in the western US are mercenary. There's a healthy market in prior appropriation rights.
Just because people don't like what the water is used for doesn't mean the water isn't priced appropriately. You'll still get farmers growing thirsty / pricey crops in the desert if it covers the cost of irrigation.
Your comment was posted in January 2025, after 2024 was the "hottest year on record" with numerous climate-related disasters (hurricanes, droughts) hitting with unseen regularity.
https://wmo.int/news/media-centre/wmo-confirms-2024-warmest-...
I wished we used the node names, like TSMC N4/N4P/N4X, because nanometers are meaningless.
Well in that context TSMC N4P tells you no more information than 4-nm does.
Scientific notation would be to logical. Instead they'll make a new tiny unit that subdivides the inch into 1/81975489347.7 of an inch.
"Eschew flamebait. Avoid generic tangents."
Bruh, you're never gonna be a good trad wife as a man. You're just not that pretty.
As such I’m going to assume it’s the least impressive variant of 4NM.
Can't wait to see the factory in Germany also starting to pump out chips.
German TSMC fab will produce 16nm there, not 4nm though. Useful for the auto industry but much lower margin and less strategically important than 4nm fab in the US.
Strategic for that same German auto industry, though. I assume that the Covid disruption to the supply of boring but essential microcontrollers for cars was a wake-up call.
Speaking of the leading edge, though: while industrial policy, like other kinds of investment, is easier with the benefit of hindsight, there must be some regret at having let Global Foundries drop out of the peloton.
That's still nice, especially considering that it’s somewhere between Haswell and Broadwell from 2014.
Maybe not the kind of progress or initiative that gets headlines, but neither is it trying to push as far as what Intel has been trying to do for the past few years.
Sure, but coming dead last behind Taiwan, Korea, US, Japan and China in the race to cutting edge semiconductor manufacturing is nothing to brag about. That's like celebrating for coming last.
This means you're getting the lowest industry margins, meaning less profits, less money for R&D, less wages and also less geopolitical leverage. This is nothing to celebrate but should be an alarm clock for our elected leader to wake the f up.
A lot of semi research is done in the EU, like at IMEC in Belgium, but few of it ends up commercialized by EU companies, so EU taxpayer money gets spent but other nations get to reap the rewards.
What Europe wants is not necessarily profitability but rather resilience. You can't leave this kind of decision up to the irrationality of market forces. So—you're correct, germany (or the EU) should subsidize chips if they want to weather the future.
If you mean the Intel factory, this is delayed by 2 years. If it ever will come.. And the other planed Wolfspeed factory is cancelled completely.
I wished they produced the chips in Europe instead of United States.
IIRC, this isn't happening because Europe doesn't have a large enough industry to purchase chips at the scale required to have such a huge investment.
This one in USA is for political reasons and likely will be feasible only if US manages to preserve the global political order.
Maybe Europe could have had force having a latest node FAB by banning exports of EUV machines and have factories built in Europe through flying Taiwanese engineers to build and operate it and call it huge success like USA is doing now.
I don't know if its worth the cost though. Sure it is good to have it bu in USA's case they even haven't built the industry around it, they will produce the chips in USA, call it "Made in America", collect the political points and ship the chips to the other side of the planet for further processing.
Is it really that big of a deal to have European machines being operated by the Taiwanese in the USA to print chips that need a visit to China to become useful? If the global world order collapses, will the 330M Americans be able to sustain the FAB? If it doesn't collapse, will that be still a good investment considering that Taiwanese have the good stuff for themselves and integrated into the full chain without flying parts across the world?
Well they made the fiirst step. They have the fab, other parts of industry may emerge with time
Europe really dropped the ball on semiconductor manufacturing.
That narrative doesn't make sense, making Taiwanese build and run a factory in USA is not much different than an oil rich Arab country luring a western institution opening a campus in their desert. Its good to have but it doesn't make you a superconductor superpower.
To be fair, the USA does have many of the key companies and technologies that make these ICs possible in first place so it's not exactly like that but in the case of TSMC it kind of is.
Top 5 Countries That Produce the Most Semiconductors:
1 Taiwan
2 South Korea
3 Japan
4 United States
5 China
Germany has 22
France has 5
Spain has 1
UK has 16
Ireland has 3
Italy has 2
Sweden has 1
Finland has 1
It's simpler than that. The USA holds the majority of the IP.
The United States possessed approximately 12% of the world's global chip manufacturing capacity as of 2021. This is a notably lower percentage of global capacity than the US enjoyed just a few decades previously (37% in 1990, for instance), before countries such as Taiwan and China ramped up their semiconductor production capabilities. Despite this decline, the semiconductor industry remains quite lucrative in the US. According to the Semiconductor Industry Association (SIA), semiconductors exports added $62 billion (USD) to the US economy in 2021, more than any product other than refined oil, aircraft, crude oil, and natural gas. Many of these imported chips return to the US in the form of finished consumer electronics.
Although the US held just 12% of the world's total semiconductor manufacturing capacity in 2021, US-based companies held approximately 46.3 percent of the total semiconductor market share. This seeming discrepancy can be explained by both the dollar value of imported US semiconductors, outlined above, and the fact that many US-based companies own and operate semiconductor fabrication plants in other countries, such as Japan. In such cases, the manufacturing capacity is added to that country's capacity rather than the capacity of the US, but the profits typically count as part of the US economy.
What a ridiculous thing to say about the home of ASML.
They do in Dresden Germany, but not nearly as cutting edge as the ones in US and Taiwan. US is a more useful strategic ally for Taiwan than EU. Not to mention the more expensive energy in Germany vs the US.
EU finds out the hard way that not having had energy independence plus a weak/non-existent military relying mostly on the US, has costly second order externalities that voters never think about or factor in their decisions(I'm European).
The best way to have peace is to always be ready for war. Being a non-armed hippie pacifist nation sounds good in some utopic fantasy world like the Smurfs, but in reality it only invites aggression from powerful despots like Putin and Xi and even your strong ally, the US, can exploit your moment of weakness and security dependence on it, to push its own agenda and trade terms on you.
After all, whenever EU falters, America gains: https://www.youtube.com/watch?v=jE-E1lQunm0
That's true, but there is a large financial cost to always being ready for war. The US has spent 80 years being the "policeman of the world" for good or bad. Lots of bad decisions but the world also takes for granted the open seas, etc. that come at a great cost to Americans in reduced social services like health insurance and higher education.
Firstly, you don't need to spend America levels (more than than the next world powers combined) to have an efective military deterrent, since currently most EU member states barely spend 2% GDP on defense which is too little. You can have a strong military AND welfare services if you're smart about your state finances which many EU members are not(looking at you Germany), especially since defense investments create more jobs and innovations flowing back into the state coffers. Switzerland is a good example.
Secondly, America's defense is way more expensive than it needs to be due to a lot of high level corruption and lobbying from the military industrial complex profiteering when it comes to purchasing decisions, where a 10$ bag of bolts is bought by the military for 50K$, shovelings taxpayer money into the right private industry pockets. EU can achieve similar results with way less cost if it wanted to by minimizing this style of corruption but that's easier said than done. The only one rivaling America's military inefficiency is Germany who spends more than France, a nuclear power with aircraft carriers, but can't afford to issue underwear and dog tags to new conscripts.
Thirdly, America's lack of social services is not due to its powerful military, but due to political choices and inefficiencies. It could easily have better welfare if it wanted to since it can afford it with the world's largest GDP, but it chooses not to, since the current status quo is enriching a lot of private enterprises and parasites, while the concept of even more welfare is usually not a popular topic with the US voters which see welfare recipients as lazy and an unnecessary money sink funded by higher taxes on the middle class which they don't want. So their issue is social and political, not economical.
But being the "policeman of the world" has helped with preserving dollar's status as the major currency for international transactions between third countries, and in particular for oil, which in turn makes the dollar a desirable currency, because everyone has and wants to have dollars, and has allowed the federal central bank to print the trillions of dollars it had been printing over and over without it losing its value. Any other country's currency would have been super-inflated if they did the same.
> but there is a large financial cost to always being ready for war. The US has spent 80 years being the "policeman of the world" for good or bad.
The US has never gone through the stage of being "ready for war" and instead went for the "living from one war to the next"
> takes for granted the open seas
The open seas is a myth. It is the American seas unless you have a lot of nuclear weapons.
> that come at a great cost to Americans in reduced social services like health insurance and higher education
But also brought lots of business and investment too. On total it's positive, otherwise the US would not do it. *I am not saying the distribution of the incoming wealth was equal.
are you claiming that the US disadvantages non-American traffic? like Chinese vessels are less safe, or not free to travel, or prone to piracy?
I think that's not the case. you can make a case that Russia's "shadow fleet" is being treated with some bias, but then again...
Nonsense, Americans pay the most for health insurance. It's merely about how you use the money. Same with education. The American economy is so great it could afford an entire second military industrial complex and still have enough money left for healthcare and education.
well, EU are enjoying NATO Protection (what I mean nato is only few nato country that really spend money on their military)
some country didn't spend as much even almost downscale its military and you expect the same benefit while didn't want any cost associated with it, how it make sense and fair for everyone???
TSMC also builds facilities in europe but they are not as advanced. Europe's strategic budget to finance such moves is much smaller. And this is purely strategic, these plants are a technology transfer program meant to de-risk the Taiwan/SK issue getting ugly. From an economic point of view, production in Asia is cheaper.
Many commenters on HN have this weird idea that if Taiwan is slightly ahead of competition, US would defend Taiwan against a country with nukes. Or that TSMC superiority is Taiwan's national security issue.
> Many commenters on HN have this weird idea that if Taiwan is slightly ahead of competition, US would defend Taiwan against a country with nukes. Or that TSMC superiority is Taiwan's national security issue.
Well... TSMC is definitely a component of Taiwan's national security. It's called the "Silicon Shield" for a reason.
And the US definitely has more reasons to go to war, and more importantly, threaten war to prevent one breaking out, over Taiwan if it knows there will be a massive economic impact.
And China definitely knows that if Taiwan is important for the US, it's almost certain the US would defend it.
The US would probably defend Taiwan if the CCP invaded it. I don't think we would ever use nukes.
Because Samsung and Intel would probably close the gap by the time the war is done. They are just 2-4 years behind with the gaps already closing in.
Some people are against industrial policy (like the CHIPS Act) because they don't believe that market failure exists.
Some people are against Biden/Dems.
Some people are clueless about the foreign policy and the geopolitical reality in Asia and take the status quo regional power balance as a given.
Not on the I want it to fail side but my main question is why we put this water intensive industry in Arizona instead of further east where water is less stressed as a resource?
Seems like it would be way better off being somewhere in the eastern half of the country or at least not in the Southwest.
water is a non-issue. The main issue in deciding where a factory should go is which state will give you the most to do it.
Previous discussion (16 hours ago)
Apple will soon receive 'made in America' chips from TSMC's Arizona fab (tomshardware.com)
Does this mean that you will see entirely made in the USA Macs?
The closest you can get is the Mac Pro line starting with the Trashcan Mac Pro.
https://www.cnet.com/tech/computing/after-federal-break-appl...
Depends, Do you have 10 year olds who will work for 18c an hour?
Or do you have consumers who will pay for the difference?
People already pay a premium on Macs to be honest. Every hard drive upgrade is ridiculously overpriced.
"Minecraft proves that the children yearn for the mines"
Marginal cost added probably isn't that much. How many manhours does a mac take to build?
Got any more of that hyperbole? Or maybe outdated xenophobia?
The average manufacturing salary in China is around $13,000 a year, in a country where cost of living is 50% lower than the US and rent is 75% lower.
China is actually a place with relatively high manufacturing labor costs these days, but it's a production center for a lot of industries and holds a lot of the ecosystems and institutional knowledge (not unlike all the automotive parts suppliers in the American Midwest).
Unfortunately the USA doesn't have religious prisoners who can be coerced into a factory as slave labor.
None of the people assembling Apple products in China are 10-year-olds making $0.18 an hour.
The good thing about apple prices is they could easily not change any of their prices and just swallow the loss in profit.
But doubtful, it'll definitely be a premium made-inthe-usa labeling for government & school use.
Just grift grift grift, then graft graft graft.
Don't chip fabs require a great deal of water? Wondering why a place like Arizona, with serious water issues, was selected.
According to TSMC: "To achieve our goal of 90% water reclamation, We will build an advanced water treatment facility (Industrial Water Reclamation Plant) at our Phoenix operation with a design goal of achieving “Near Zero Liquid Discharge”. This means the fabs will be capable of using nearly every drop of water back into the facility."
While they reclaim 90% of the water, given the immense amount of water they use, it's still an exorbitant amount.
With all 6 fabs online, and water reclamation in place, it's expected to be the equivalent of 160,000 homes:
https://www.phonearena.com/news/tsmc-access-to-water-us-fabs...
Now you can and absolutely should (IMO) make the argument that the fabs are far more important than the agricultural use in the area which is far more wasteful. But someone has to step up and do that and none of the politicians in the area seem to have been willing to make a commonsense decision and say: we're done growing crops in the desert when we've got endless better options.
Be easier just for Arizona to stop growing alfalfa. Its popular because they can grow two crops. According to the feds, there is 300,000 acres of alfalfa in Arizona. Cut that you have enough water saved for tens of millions of people. growing water hungry crops in the desert doesn't make sense.
https://www.nass.usda.gov/Statistics_by_State/Arizona/Public...
Why not a place like Washington State or Oregon with abundant water and hydropower
Maybe you should have developed a technology to upload his brain.
About time.
I seem to recall some detail about how they don't do the packaging, and that' still on the mother island.
This suggests that may be the case: https://www.theregister.com/2024/10/04/tsmc_amkor_arizona/
It's a move in the right direction, but not as much as may be needed.