Apple to Expand Chip Manufacturing in U.S. Thanks to New TSMC & Amkor Partnership
Credit: Apple
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Apple’s chip-making partner TSMC and chip packaging company Amkor announced on Thursday that they’ve agreed in principle to collaborate on chip production, packaging, and testing in their Arizona facilities.
The two companies say the close proximities of their facilities in Arizona will accelerate the overall chip manufacturing process:
Under the agreement, TSMC will contract turnkey advanced packaging and test services from Amkor in their planned facility in Peoria, Arizona. TSMC will leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix. The close collaboration and proximity of TSMC’s front-end fab and Amkor’s back-end facility will accelerate overall product cycle times.
Last year, Apple announced that Amkor would begin packaging Apple silicon chips at a nearby TSMC facility as part of an effort to expand U.S. manufacturing. In September, Taiwan-based independent tech journalist Tim Culpan reported that TSMC’s Arizona facility had begun producing Apple’s A16 chips on a small scale. The chips are said to be fabricated using the same 4nm N4P process employed in TSMC’s Taiwan factories. The A16 was introduced in Apple’s iPhone 14 Pro models two years ago and is still being used in the lower-end iPhone 15 and iPhone 15 Plus models.
At this point, it’s unclear which Apple devices will use the Arizona-made A16 chips. Apple will likely continue selling the iPhone 15 and iPhone 15 Plus until late 2026, so the chips may be solely intended for those devices. However, they could also find a home in a base-model iPad update or the upcoming fourth-generation iPhone SE, although most reports say the next iPhone SE will get the iPhone 16’s A18 chip; such a move would be in line with past iPhone SE models and would be necessary to power Apple Intelligence in this case.
The facility is expected to ramp up production significantly once the second stage of its first phase is completed. Full-scale manufacturing is projected to start in the first half of 2025.
Apple said Amkor will invest approximately $3 billion in the project, which, upon completion, is expected to employ more than 2,000 workers.
“Apple is deeply committed to the future of American manufacturing, and we’ll continue to expand our investment here in the United States,” said Apple’s operations chief, Jeff Williams, in a press release last November. “Apple silicon has unlocked new levels of performance for our users, enabling them to do things they could never do before, and we are thrilled that Apple silicon will soon be produced and packaged in Arizona.”
In April 2024, the United States Commerce Department announced it would provide a large subsidy to Apple chip supplier TSMC to produce more chips in the U.S. The White House announced that the U.S. Commerce Department would allocate $6.6 billion in grants to TSMC and $5 billion in loans to advance semiconductor production in Phoenix, Arizona. TSMC will also be allowed to claim an investment tax credit of up to 25% of capital expenditures.
TSMC has also announced plans to build a third chip fabrication plant in Arizona by 2030. The company’s first plant in Arizona is expected to start fabricating 4nm chips next year. The second plant, which was originally intended to be used to fabricate 3nm chips, will also begin producing 2nm chips by 2028. The company’s third plant will also manufacture 2nm chips and will include enough capacity to make more advanced semiconductors in the future.
