TSMC’s trial production yield rate at its U.S. facility has now surpassed that of its Taiwan plant. The early trial production yield rate at TSMC's first plant in Arizona has exceeded that of similar facilities in Taiwan, marking a significant breakthrough for the U.S. expansion project, which initially faced delays and worker conflicts.

This achievement reflects progress in the U.S. government’s efforts to revitalize domestic semiconductor manufacturing. As a key chip manufacturer for partners like NVIDIA and Apple, TSMC is anticipated to receive $6.6 billion in government subsidies and a $5 billion loan (along with a 25% tax credit) to construct three fabs in Arizona. As with nearly all awards under the 2022 CHIPS and Science Act, the funding is not yet finalized.

Meanwhile, two other core semiconductor manufacturers in the Biden administration’s tech strategy, Intel and Samsung, have faced significant challenges. Intel, originally expected to be the largest beneficiary of the CHIPS Act, is now under such severe financial strain that it is postponing global projects and considering asset sales.

TSMC, however, continues to see momentum. In October, the chipmaker’s quarterly earnings exceeded expectations, and it raised its 2024 revenue growth target, sending its stock price to a record high.

The yield improvement is a major accomplishment for TSMC, a company historically known for keeping its most advanced and efficient facilities in Taiwan. The Arizona plant had a rocky start as TSMC struggled to find enough skilled workers to install its advanced equipment, with employees facing safety and management challenges. By late 2023, TSMC reached an agreement with construction unions.

Initially, TSMC planned for its first Arizona plant to begin full production in 2024, but labor issues pushed this goal to 2025. Additionally, the second plant’s start date was postponed from 2026 to 2027 or 2028, raising concerns that TSMC might not achieve the same production efficiency in the U.S. as in Taiwan.

The first Arizona fab is scheduled to produce 4-nanometer technology by the first half of 2025, while the second fab, using advanced 2-nanometer technology, is slated to begin production in 2028.

In a statement in April this year, TSMC announced plans to construct a third advanced fab in Arizona, bringing its total investment in the region to over $65 billion. This marks the largest foreign direct investment in Arizona’s history and the largest foreign greenfield investment in U.S. history.

On Friday, Bloomberg, citing informed sources, reported that Rick Cassidy, president of TSMC’s U.S. division, disclosed on Wednesday that TSMC’s Arizona plant's trial production yield rate has surpassed that of its Taiwan counterpart by about four percentage points.

Yield rate, a key metric in the semiconductor industry, measures the proportion of qualified chips produced, with higher yield rates generally indicating greater production efficiency.

Follow us

Find us on Twitter, Instagram, YouTube, and TikTok for frequent updates on all things investing.

Have a financial topic you would like to discuss? Head over to the uSMART Community to share your thoughts and insights about the market! Click the picture below to download and explore uSMART app！

Important Notice and Disclaimer:

We have based this article on our internal research and information available to the public from sources we believe to be reliable. While we have taken all reasonable care in preparing this article, we do not represent the information contained in this article is accurate or complete and we accept no responsibility for errors of fact or for any opinion expressed in this article. Opinions, projections and estimates reflect our assessments as of the article date and are subject to change. We have no obligation to notify you or anyone of any such change. You must make your own independent judgment with respect to any matter contained in this article. Neither we or our respective directors, officers or employees will be responsible for any losses or damages which any person may suffer or incur as a result of relying upon anything stated or omitted from this article.

This document should not be construed in any jurisdiction as constituting an offer, solicitation, recommendation, inducement, endorsement, opinion, or guarantee to purchase, sell, or trade any securities, financial products, or instruments or to engage in any investment or any transaction of any kind, nor is there any intention to solicit or invite the purchase or sale of any securities.

The value of these securities and the income from them may fall or rise. Your investment is subject to investment risk, including loss of income and capital invested. Past performance figures as well as any projection or forecast used in this article is not indicative of its future performance.

This advertisement has not been reviewed by the Monetary Authority of Singapore