TSMC has announced that the production of N4 chips in the US will be delayed by a year. The first factory in Arizona, which was initially planned to be operational in 2024, will now only be ready by 2025. The decision to build a second contract manufacturing facility in the US, made last year, was a challenging one for TSMC. The company sought subsidies from American partners whenever possible, while also needing to reduce its medium-term capital expenditures. TSMC has now confirmed that the first of the two facilities in Arizona will start operations in 2025, instead of the previously planned 2024 timeframe.
The highly publicized project involves spending $40 billion to establish two TSMC facilities in Arizona, capable of processing 20,000 300 mm silicon wafers per month. The first facility was initially intended to offer customers 5nm chips and the N4 process technology in 2024, while the second facility was scheduled to produce 3nm components by 2026.
Although TSMC already operates a subsidiary, WaferTech, which began producing chips on a contract basis in Washington state in 1996, the new facilities in Arizona mark a significant advancement in technical processes. Therefore, they can be rightly considered TSMC's first major chip production ventures in the United States.
During a quarterly reporting event, TSMC representatives mentioned that capital expenditures for the current year will be around $32 billion, slightly below the previously mentioned upper limit of $36 billion. With $18.1 billion already spent on related needs in the first half of the year, the company is likely to allocate approximately $14 billion for capital expenditures in the remaining six months. The impact of this decision on the construction timeline of the Arizona plant has not been specified. However, TSMC management has assured that skilled workers will be dispatched from Taiwan to accelerate the process at the site.
Consequently, the establishment of mass production for N4 technology chips at the first Arizona facility will no longer happen in 2024 as originally planned. The commencement of serial production for chips utilizing this advanced technical process has been rescheduled for 2025. It remains uncertain how this delay will affect the plans of Apple, NVIDIA, and AMD, who have been rumored to consider TSMC for chip manufacturing in the US. Meanwhile, the 5nm process technology, closely related to N4, is currently available to customers at TSMC's facilities in Taiwan, with revenue from its use rising to 30% in the second quarter.
