Apple and TSMC have had a long and successful partnership. The Cupertino juggernaut is always first in line for TSMC’s most advanced nodes, and these chips always come from Taiwan. But in light of recent supply chain turmoil, Apple and other companies are looking for ways to diversify their chip sources. TSMC is said to begin production of the 3nm design at its Arizona fab in early 2024. This could allow Apple to boast of using American-made silicon for the first time. However, Bloomberg is reporting that this is likely nothing more than a PR stunt.
News of Apple’s plans came at a recent meeting with employees in Germany that included CEO Tim Cook Bloomberg’s Mark Gurman, who is a noted Apple Beat reporter, noted that TSMC produces 60 percent of the world’s semiconductor products. In light of this, Cook commented, “Whatever you may feel and think, getting out of anywhere 60 percent according to Engadget is probably not a strategic position”. To address this situation, TSMC will reportedly begin producing chips for Apple at a new facility in Arizona. The company already has a fab in Arizona, but 3nm production will come from a new plant. The company will begin 5nm manufacturing in Arizona in 2024.
Moving some of its most advanced technology to the States is a big deal for TSMC. However, it is not clear whether Apple will be able to acquire 3nm chips from the Arizona fab anytime soon. TSMC is believed to be starting production of this advanced process in Taiwan right now. This latest node is expected to be used for the A17 chip in the upcoming iPhone 15. It also has 3nm plans for future M2 chips. However, news of TSMC bringing 3nm to Arizona and Apple using “US-made chips” may not be connected.
According to a Bloomberg analyst, Apple will indeed use chips from Arizona, but they likely won’t be 3nm. According to 9to5mac, Bloomberg’s Tim Kulpan thinks it’s mostly a “symbolic gesture.” Instead of leaning on TSMC for its most advanced designs, Apple will likely use mature nodes for fewer parts in its flagship devices, or use SoCs for less significant products. These include AirPods, HomePod, Apple TV and Watch.
Even if the Arizona site starts making M-class silicon or A-class chips for the iPhone, it will be in extremely low volumes. It is reported TSMC’s new facility will produce 20,000 wafers per month. In contrast, TSMC as a whole currently produces 1.3 million wafers a month in Taiwan. That means the new facility will provide just 1.6 percent of that capacity. In other words, as Bloomberg says, it’s more of a marketing campaign than anything else.
To be fair to Tim Apple, he didn’t say which companies would produce chips in Arizona. However, the only other fabs in that state belong to Intel. If he actually mentioned Chipzilla, it would be a huge announcement. However, given his long relationship with TSMC along with the company’s advanced node leadership, it is clear that he is referring to TSMC. Also, recently the two companies have reportedly been in a price tussle, with Apple bowing to its sole supplier demands. It appears that the two companies will be joining the proverbial hip for at least the next few years.
Still, sourcing chips outside of Taiwan is a big step for Apple. Nvidia and AMD are also big TSMC customers, of course, and are currently using TSMC’s 5nm process for their latest CPUs and GPUs. Perhaps once Arizona fab capacity expands, other companies may also entertain the idea of buying silicon stateside.