Tech
Secretive Giant TSMC’s $100 Billion Plan To Fix The Chip Shortage
Taiwan Semiconductor Manufacturing Company makes 24% of all the world’s chips, and 92% of the most advanced ones found in today’s iPhones, fighter jets and supercomputers. Now TSMC is building America’s first 5-nanometer fabrication plant, hoping to reverse a decades-long trend of the U.S. losing chip manufacturing to Asia. CNBC got an exclusive tour of the $12 billion fab that will start production in 2024.
As the world grapples with an ongoing chip shortage, a quiet giant among chipmakers has committed to investing $100 billion over three years to ramp up production.
Taiwan Semiconductor Manufacturing Company may not be a household name, but with a market value of over $550 billion, it’s one of the world’s 10 most valuable companies. Now, it’s leveraging its considerable resources to bring the world’s most advanced chip manufacturing back to U.S. soil.
CNBC got an exclusive tour of the $12 billion fabrication plant, or fab, in Phoenix, Arizona, where TSMC will start making 5-nanometer chips in 2024. The company says it will produce 20,000 wafers each month.
“These are parts that are going to be used in lots of different places: CPUs, GPUs, IPUs, etc. They’ll be used in smartphones,” Rick Cassidy told CNBC. Cassidy is TSMC’s chief strategy officer and the president and CEO of TSMC’s project in Arizona.
TSMC makes key components for everything from cellphones to F-35 fighter jets to NASA’s Perseverance Rover mission to Mars. Earlier this month, it announced plans for a new factory in Japan, where it will produce chips with older technologies, for things like household devices and certain car components. TSMC is also Apple’s exclusive provider of the most advanced chips inside every iPhone currently on the market and most Mac computers.
“But they remain sort of in the background, in terms of end markets. So Apple gets all the accolades when a new phone comes out,” said Joanne Itow, managing director of manufacturing at Semico Research.
“We’re low-key. We let our products speak for themselves. Their success brings all the business that we could ever hope for,” Cassidy said.
The U.S. was the birthplace of advanced silicon, but for decades now, it’s been losing market share to Asia, where 79% of the world’s chip production happened in 2020, according to industry association SEMI. It calculated the U.S. was responsible for 12% of worldwide chip manufacturing last year, down from 37% in 1990.
TSMC alone was responsible for 24% of the world’s semiconductor output in 2020, up from 21% in 2019, according to the company. When it comes to the most advanced chips used in the latest iPhones, supercomputers and automotive AI, TSMC is responsible for 92% of production while Samsung is responsible for the other 8%, according to research group Capital Economics.
“It’s become almost a monopoly at the leading edge, and all of those manufacturing operations, for the most part, are out of Taiwan, Hsinchu. That becomes a matter of national importance for the United States, but not only the United States, but the Western world,” said Christopher Rolland, Susquehanna’s senior semiconductor analyst.
Along with cutting edge 3- and 5-nanometer chips, TSMC also makes larger chips for products such as electric toothbrushes and coffeemakers. Cars often use less-advanced 28- to 40-nanometer chips. All types of chips have been impacted by the shortage. Carmakers including GM and Toyota have paused production at some plants. And Apple is likely to slash its 2021 production targets for the iPhone 13, with orders for some models delayed by more than a month.
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Secretive Giant TSMC’s $100 Billion Plan To Fix The Chip Shortage
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Tuesday is John Ternus’ first day as CEO of Apple, following Tim Cook’s 15-year run as the top leader. Ternus is a 25-year company veteran and was Apple’s senior VP of hardware engineering. Ternus takes over as Apple confronts major challenges due to soaring memory costs and the company’s precarious position in AI. CNBC technology reporters Kif Leswing and MacKenzie Sigalos discuss what’s next for the iPhone maker and what to expect from Ternus and Cook in their new roles.
Topics:
00:00 Introduction
00:14 Who is John Ternus?
00:59 AI era
3:00 What to expect from September 9th event
6:40 Tim Cook’s role
8:33 Smooth transition
11:18 Siri AI
15:12 Competition
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19:45 The importance of the Mac
22:07 Biggest challenge
Reporters MacKenzie Sigalos, Kif Leswing
Edited by Erin Black
Camera by Andrew Evers
Senior Director of Video Jeniece Pettitt
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Chapters:
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CREDITS:
Reporting by: Brandon Gomez
Produced by: Ryan Baker
Edited by: Darren Geeter, Andrea Miller
Camera and Additional Reporting: Natalie Rice
Animation by: Jason Reginato, Emily Park
Senior Managing Producer: Tala Hadavi
Additional Footage: Getty Images
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How The U.S Became So Dependent On Taylor Farms
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@LeicaM11
December 20, 2023 at 3:57 pm
Where in Arizona desert they will get all the water for production from? 💦
@user-vo3zy6bj1z
December 20, 2023 at 3:57 pm
Taiwan has leveraged unfair policies, including low-cost labor, land subsidies, tax incentives, low electricity and water prices, and a favorable interest rate environment. Additionally, it has benefited from institutional advantages such as low-cost universal education. Seizing the opportunity presented by the semiconductor industry's shift after the US-Japan semiconductor war in the 1980s, Taiwan has vigorously developed the semiconductor manufacturing and chip design industries. Currently, due to the advantages of unfair policies, many semiconductor companies in Taiwan have grown to the extent that they can compete with leading US companies. For example, MediaTek surpassed Qualcomm to become the world's top mobile chip processor company. This success is not solely attributed to MediaTek's capabilities but stems from the unfair competitive advantage.
Given this situation, the United States cannot tolerate the continuation of such circumstances. It is time to counteract and dismantle Taiwan's semiconductor industry, including companies like TSMC and MediaTek.
@robertpearson8546
December 20, 2023 at 3:57 pm
Oh! Wow! After over three decades of outsourcing manufacturing overseas, executives are surprised that manufacturing is overseas.
@kishaniramsey5913
December 20, 2023 at 3:57 pm
The UasSA is a country of robbers and thieves. Alstom, Toshiba, Huawei's patents and TSMC's core tech processes. Good luck to TSMC.
@robertodulio817
December 20, 2023 at 3:57 pm
TSMC is another proxy company of China
@user-gi8bc6us4d
December 20, 2023 at 3:57 pm
Arizona people Have No Skills to build anything at all.
@jarrodyuki7081
December 20, 2023 at 3:57 pm
oh boy!!!!!!!!!!!!!!!!!!!!!!
@eugeniustheodidactus8890
December 20, 2023 at 3:57 pm
They don't want FAKE NEWS on their building sites.
@LiamTremblay207
December 20, 2023 at 3:57 pm
Things are a little off right now. The US dollar's purchasing power is declining, while its value as a whole is rising. Assets like stocks, homes, cryptocurrencies, and precious metals aren't performing as well as they could because individuals are investing their money in dollars for security. I'm worried that my $320,000 in savings may lose value rapidly. What should I do to secure my money?
@AlyssaMonetMason
December 20, 2023 at 3:57 pm
Love
@Sukhoi1983
December 20, 2023 at 3:57 pm
Im proud to be Dutch!! those machines inside TSMC that make the chips are made in the Netherlands 😀
@Robertl33trev
December 20, 2023 at 3:57 pm
So open up a TSMC so we dont have to import chips. Then Biden shut down our oil so we have to import it now. Seems legit.
@MissionaryForMexico
December 20, 2023 at 3:57 pm
Wait till a country starts slinging bombs that destroys electronics! It will shut down entire nations!
@ChineseRepOfTaiwan
December 20, 2023 at 3:57 pm
geopolitical tension is not our problem. We have been doing our best to put customers first, but China has other agendas. US and the world should recognize that and help Taiwan. Forcing TSMC to go to USA soil won't help USA but just hurt TSMC's competivity. (Well, Intel welcomes that for sure) US just doesn't have enough educated professionals in this area, and more importantly, the mantality to truly put customers first, and not competing with them. The really secret sauce why TSMC is so successful.
@ma_zu_888
December 20, 2023 at 3:57 pm
👏👏🇧🇷🇷🇺🇮🇳🇨🇳🇿🇦➕️👍👍👍
@Aarickghumman
December 20, 2023 at 3:57 pm
10:00:00:00
@u9722206
December 20, 2023 at 3:57 pm
The Colorado river is drying up already. Bad idea to manufacture in Arizona.
@LeandroMayer-sd4hv
December 20, 2023 at 3:57 pm
Uma empresa atraente em suas riquezas infinitas , mas uma disputa mundial que trazera sérias consequência se uma sabedoria devida a uma segurança não for tomada .
@samirabdulahad9379
December 20, 2023 at 3:57 pm
https://youtu.be/d66lEX7M06k
@TaTa-ce1kq
December 20, 2023 at 3:57 pm
TSMC is talking of problems in the UasSA and will be moving out of the UasSA . No proper workers and poor work culture. The UasSA has a long way to go to be able to recover her manufacturing.
@davepilsner2269
December 20, 2023 at 3:57 pm
For context: US Micron can't give their chips away. That TSMC won't hand over their tech to Micron should be expected. That SMIC has started creating their own lithography bypassing the US sanctions placed on ASML who lost money thanks to the US sanctions forced on them that they threaten to ignore. Which forced the US to lift the sanctions allowing Apple and FoxConn to leave the disaster in India and return to China.
@robyg7037
December 20, 2023 at 3:57 pm
Thank you TSMC for bringing wafer fabs into the Arizona ! God Bless the Republic of Free China !
@janicetan5299
December 20, 2023 at 3:57 pm
Actually in the near future, humans will become the work force manpower which AI cannot do well…so our work in the near future will focus on production workers which is still costly in the part of the companies than employing a single machine that will do things. In the era of AI revolution , the value of human beings will center only to continuity of life , our jobs will encircle in entertainment like " prostitution , clubs, entertainment media , gambling , excursion , travel , thinkers of ideas and others that involves deep emotion which the AI manpower cannot
Execute with perfection. lay off of workers will be massive, people with become more of sellers or perhaps consumers than producers… The education for learning will deteriorate, losing its value in the market. Therefore , the government will prepare for the transition or else it will lead to chaos and resistance . AI will be then transform as a weapon to control the people..
@wildlifewarrior2670
December 20, 2023 at 3:57 pm
I have stock in this company they better do good
@Will.i.am55555
December 20, 2023 at 3:57 pm
TSMC is going spiralling down 😢😢😢once…
They were forced to make in 🇺🇸 and joined in the sanctions against 🇨🇳
Even a nation like 🇯🇵 were destroyed by the imperialist 🇺🇸 back them …
Who is TSMC to play poker with the USA Govt. And become anti.China…
So silly and pure arrogance got into his water filled brains😢😢😢
@asperneto
December 20, 2023 at 3:57 pm
Semicon mfg demands a lot of water, the reality is, will Arizona prioritize its industries or residents?
Real estate will increase when these factories start hiring prior to start of operations. Many workers from Silicon Valley will now have alternatives.
With all these, at what costs?
Arizona should look beyond its borders to support industries it is trying to build.
@KenCheng
December 20, 2023 at 3:57 pm
One of the main reasons why China wants Taiwan back 😒