Atop a newly-completed, 3.5-million-square-foot building that stands on 1,100 acres in the Arizona desert north of Phoenix is a giant logo of a microchip wafer and the letters TSMC.
CNBC first visited the fab in 2021, not long after TSMC broke ground. TSMC initially announced the plant would cost $12 billion and pump out 5-nanometer chips by the end of 2024. Three years later, that price tag has soared to $20 billion and full production is delayed until 2025.
Instead, the fab is in pilot production, making sample wafers and sending them to customers for verification. TSMC has committed to building two more fabs on the site by the end of the decade, for a total investment of $65 billion.
The project is “dang near back on the original schedule,” TSMC Chariman Rick Cassidy told CNBC during an exclusive first look at the completed fab in November.
“When we came to the U.S., we knew we were going to go through a learning process,” Cassidy said. “Whether it was permitting, learning how to work with the trades, learning how to work with the unions, local labor laws. Lots of learnings that went on. Now we’ve overcome those.”
TSMC chairman Rick Cassidy shows CNBC’s Katie Tarasov around its newly completed fab on November 7, 2024, where it will make advanced chips on U.S. soil for the first time.
Andrew Evers
With the help of some 2,000 employees, the fab is set to make more advanced chips than originally planned. It will produce 4-nanometer chips, at a rate of 20,000 wafers per month, TSMC said.
“We’ve seen TSMC be able to kind of name its price, and everyone’s going to pay it because right now it’s the dependability and the quality that is needed,” said Daniel Newman, CEO of The Futurum Group.
‘On par with our Taiwan compatriots’
The fab’s yields are anticipated to be “right on par with our Taiwanese compatriots,” Cassidy said. Still, some 92% of the world’s most advanced chips are currently made by TSMC’s Taiwan fabs, so the U.S. is far from self-reliant.
“It’s difficult or impossible for the U.S. or any country to be fully self-sufficient in everything that they need to build semiconductors,” said Stacy Rasgon of Bernstein Research. “That’s a pipe dream.”
Despite being the birthplace of microchips in the 1950s and remaining a top chip design hub, the U.S. now manufactures only 10% of the world’s chips and none of the most advanced ones. When supply chain chaos collided with booming demand for consumer electronics during the pandemic, the resulting chip shortage exposed the big risks of relying on outsiders for such a critical technology.
In the event of aggression between China and Taiwan, an earthquake or some other event that impacts Taiwan for a period of time, “the entire market, the entire world could suffer from lack of availability of leading edge nodes,” Newman said.
TSMC’s first fab in Arizona, shown in November 2024, where it will make advanced chips on U.S. soil for the first time.
TSMC
Other fears surfaced when President-elect Donald Trump expressed opposition to the $52 billion CHIPS Act in October during his campaign. Weeks later, the U.S. Commerce Department finalized TSMC’s allotted $6.6 billion from the bipartisan bill.
“Repealing the CHIPS Act would make Americans less safe,” Commerce Secretary Gina Raimondo told CNBC in an interview, adding that she doesn’t think the incoming administration would repeal it.
“I just don’t think they’ll do that,” Raimondo said.
Talks with TSMC about bringing advanced chip production to the U.S. began in 2018, during Trump’s first term.
“I set up a phone call between the chairman of TSMC and the head of Apple,” said Wilbur Ross, who was commerce secretary at the time. “Apple became very strongly supportive of the idea of TSMC coming.”
Rose Castanares, a 26-year company veteran and now president of TSMC Arizona, was also involved with the early conversations. Customers “wanted supply resilience,” Castanares said.
Relying on chips from Asia has also complicated the U.S. drive for technological dominance. That’s why President Joe Biden hit the chip industry with a complex web of export controls meant to keep China from pulling ahead with advanced tech.
In October, some TSMC chips were spotted in Huawei devices, despite bans on selling to the Chinese company.
“This problem is as old as time,” Newman said. “There’s a lot of complex rerouting of goods to get gray market to different countries that have limited access to leading edge or the most advanced technology.”
TSMC Arizona president Rose Castanares with CNBC’s Katie Tarasov in the newly completed fab on November 7, 2024, where it will make advanced chips on U.S. soil for the first time.
Andrew Evers
Workers, water and power
Nearby in Chandler, Arizona, Intel is also building two huge fabs.
The U.S. company has a far different business model, designing and manufacturing its own chips, while TSMC only makes chips for others. The relationship between the two companies is solid, Cassidy said.
“We meet with [Intel] weekly and the feedback is we’re helping them increase their ranks,” Cassidy said. “We’re helping them train on the most advanced stuff, so I think they’re pretty happy with what we’re doing.”
Both companies have delayed the timelines for full production at their new Arizona fabs. But where TSMC has remained the uncontested leader in advanced chips, Intel has stumbled time and again.
The two will also be competing for a scarce resource in the U.S. chip industry: workers.
“When we finished the construction of this fab, it was really the first advanced manufacturing fab that had been built in the United States for at least 10 years. Semiconductors is a very, very tough technology,” TSMC’s Castanares said. “The experience is just not here in the United States.”
At the beginning of the project, TSMC sent some 600 engineers to train in Taiwan. Process integration engineer Jeff Patz spent 18 months there starting in 2021.
“The purpose was to go and actually make things, right? And learn how they’re made,” Patz said. “You have to have a kitchen to cook.”
TSMC has also brought experts over from Taiwan on 3-year temporary assignments. TSMC plans to hire at least 6,000 workers by the time all three fabs are completed.
“For engineers, we are actively recruiting at universities in Arizona and all across the U.S.,” Castanares said. Arizona State University “even has what they call a TSMC day.”
Water is another scarce resource needed in abundance.
With Taiwan recently facing its worst drought in nearly a century, TSMC is no stranger to recycling the massive amount of water it needs to make chips. TSMC will take 4.7 million gallons of water daily to run the first Arizona fab, but it will bring that demand down to 1 million gallons a day, in part by recycling some 65% of that, the company said.
It also takes a massive amount of power to make chips.
TSMC built solar on site, but it’s not nearly enough to cover the 2.85 gigawatt-hours per day needed to run the first fab. That’s equivalent to the power used by roughly 100,000 U.S. homes. TSMC said it’s purchasing renewable energy credits to offset that. But amid the AI-fueled data center boom, Arizona’s largest utility warned that it could run out of transmission capacity before the end of the decade.
That’s also when TSMC plans to start production at its third Arizona fab, which Cassidy said is “probably going to be 2 nanometer and more advanced.”
TSMC is also broadening its global footprint. It opened its first fab in Japan in February and broke ground on an $11 billion fab in Germany in August.
Within the U.S., Cassidy said TSMC is also likely to keep expanding.
“There’s room for lots of fabs,” Cassidy said.
Watch the full video for never-before-seen footage inside TSMC’s Arizona fab: https://cnbc.com/video/2024/12/12/inside-tsmcs-new-chip-fab-where-apple-will-make-chips-in-the-us
The Robinhood logo is seen displayed on a smartphone screen against a computer screen displaying stock market graphs on Oct. 10, 2024.
Dominika Zarzycka | Nurphoto | Getty Images
The Securities and Exchange Commission is dropping its investigation into Robinhood’s crypto arm, the company revealed Monday.
Robinhood said it received a letter from the SEC’s enforcement division on Friday, detailing in a blog post that the agency has closed its investigation into the crypto business with no intention of moving forward with an enforcement action. The news comes three days after Coinbase similarly announced that the SEC has agreed to end its enforcement case against it.
Shares of Robinhood initially rose on the news but were last lower by about 2% amid a broader pullback in stocks from the day’s highs.
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Shares of Robinhood initially rose on the news but pulled back with the broader market.
In May 2024, Robinhood received a notice warning that it could be charged for potential violation of securities law within its crypto unit after previously being subpoenaed for its cryptocurrency listings, custody and platform operations – despite “years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,'” Dan Gallagher, the company’s chief legal, compliance and corporate affairs officer, said at the time.
“Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities,” he said in a statement Monday. “We appreciate the formal closing of this investigation, and we are happy to see a return to the rule of law and commitment to fairness at the SEC.”
An SEC spokesperson declined to comment for this story.
The SEC’s dismissal of the Robinhood and Coinbase cases is an early sign of the regulatory sea change for the crypto industry promised by President Donald Trump during his election campaign. Despite the meteoric rise of the price of bitcoin under the previous administration, many crypto businesses saw it as low point due to the SEC’s notorious regulation-by-enforcement approach to crypto – as opposed to the creation of clear rules by which to operate – under the leadership of then Chair Gary Gensler.
Yuval Bachar knows data centers. He’s worked on them for Meta, Microsoft and Cisco, but now, his startup is looking to help Silicon Valley run data centers with lower carbon dioxide emissions.
ECL, Bachar’s startup, builds hydrogen-powered data centers.
Hydrogen is a novel energy source for data centers that is more eco-friendly, and more importantly for tech companies that need to quickly expand their infrastructure, data centers running on hydrogen can be placed into service in half the time that it takes to construct data centers that connect to the grid, Bachar said.
There’s one of these hydrogen-powered data centers, with a measly 1-megawatt capacity, next to ECL’s headquarters in Mountain View, California. Twice a month, a diesel truck hauls in hydrogen in a tank from Southern California or northern Nevada. The hydrogen mainly derives from natural gas, which is the top energy source for electricity in the U.S.
Bachar and others developing technologies that can fuel data centers with minimal emissions discuss their work in a new CNBC documentary, which you can watch above.
Since OpenAI released ChatGPT in 2022, Amazon, Google, Microsoft and other companies have been racing to open data centers that can handle generative artificial intelligence. These buildings are typically filled with power-hungry Nvidia graphics processing units. GPUs are the standard for training and running large language models that produce impressive chunks of text with a few words of human input. Executives across industries have seen what ChatGPT can do, and now they want to infuse generative AI into their products and internal operations, sometimes with hopes of boosting productivity.
If your data center doesn’t have enough power for GPUs today, then executives will look elsewhere. Bachar knows that. It’s a big part of his pitch.
He likes to say that utilities in some places, such as California and Virginia, can’t help you right now if you want a lot of power for a data center. OpenAI’s Sam Altman has invested hundreds of millions in nuclear startups, but they won’t be ready to deliver energy for years, Bachar said.
After establishing ECL in 2021, Bachar has signed up two paying customers, with several other organizations that have placed orders for future delivery.
“It’s the Microsofts, Facebooks, Amazons and Googles of the world … which require all of this technology to be placed somewhere, and right now, somewhere is nowhere,” said Bachar, explaining that traditional data centers in the U.S. can’t be easily repurposed to work with AI.
ECL has plans to operate its sites efficiently, but as of now, it’s tiny, with 10 employees and 18 contractors. That’s much smaller than Altman’s nuclear fusion investment, Helion, and the fission startup he backed, Oklo. Together the two employ nearly 600 people, representatives said.
Microsoft has committed to working with Helion, and the software company also signed a power purchase agreement in September to restart a nuclear reactor at Pennsylvania’s Three Mile Island that shut down in 2019.
Nuclear installations inherently prompt questions about safety and the handling of waste, but their carbon-free status makes them attractive. Amazon, Google and Oracle have all explored small modular reactors with lower capacity than the ones at Three Mile Island.
Last Energy Founder and CEO Bret Kugelmass shows CNBC a full-scale prototype of the start-up’s small modular reactor in Washington, DC, on January 8, 2025.
Magdalena Petrova
Thebig tech companies are carefully watching their emissions in the AI age.
By 2030, Google wants to have net-zero emissions while Microsoft’s goal is to be carbon negative by that year. Amazon has pledged to reach net-zero carbon by 2040.
“We’re working with major tech companies, as well as various industrial players, to help them integrate our plug and play solution for on-site power generation into data centers,” said Bret Kugelmass, founder and CEO of Last Energy, a Washington startup working on small modular reactors.
Bachar is fascinated with nuclear energy, but he said getting more of those facilities online will take time.
“We have a problem that we have to solve right now,” he said.
In addition to his nuclear investments, OpenAI’s Altman has bet on solar startup Exowatt. It has partners developing data centers that are consuming more than half of the energy available in their states in some locations, co-founder and CEO Hannan Happi said.
Geothermal energy has also garnered fresh interest in the modern AI era, with Google collaborating with startup Fervo Energy in Nevada. Tim Latimer, the startup’s CEO, said Fervo has found a way to generate gigawatts of electricity in a single place by drilling horizontal holes underground, rather than the traditional vertical way.
Gigawatts are a serious quantity, but drilling holes for geothermal plants can be expensive, said Adrian Cockcroft, a former Amazon sustainability executive.
ECL intends to build a large-scale, 1-gigawatt data center in Texas over the next four years, with the help of hydrogen pipelines. It will probably take that long to move to zero-carbon green hydrogen using electrolyzers that convert water into hydrogen and oxygen, Bachar said.
But generating green hydrogen through electrolysis isn’t cheap, said Kittu Kolluri, managing director of Neotribe Ventures.
The price of green hydrogen is to be determined, especially now that Donald Trump is U.S. president again, Bachar said.
Still, every gigawatt matters.
In 2028, U.S. data center demand could come in between 74 gigawatts and 132 gigawatts, according to a December report from the Lawrence Berkeley National Laboratory. Data centers might account for 6.7% to 12% of total U.S. energy consumption in 2028, up from 4.4% in 2023, the report said.
“The concern we have is can we grow fast enough to address the unprecedented demand for AI data centers,” Bachar said.
Tim Cook, chief executive officer of Apple Inc., greets customers during the first day of in-store sales of Apple’s latest products at Apple’s Fifth Avenue store in New York, US, on Friday, Sept. 20, 2024.
Victor J. Blue | Bloomberg | Getty Images
Apple plans to open a new factory for artificial intelligence servers in Texas as part of a $500 billion investment in the U.S., the company said Monday.
The U.S. technology giant said it would work with partners to launch a 250,000-square-foot server manufacturing facility in Houston to produce servers for Apple Intelligence, its AI personal assistant for iPhone, iPad and Mac computers.
The new factory, which is slated to begin operations in 2026, will form part of a major investment plan Apple is committing to over the next four years. In addition to the new Texas facility, Apple said it also plans to hire around 20,000 new employees across the U.S.
Most of the new hires will be focused on research and development, or R&D, silicon engineering, software development, and AI and machine learning, Apple said.
“We are bullish on the future of American innovation, and we’re proud to build on our long-standing U.S. investments with this $500 billion commitment to our country’s future,” Apple CEO Tim Cook said in a statement Monday.
Read more CNBC tech news
The move comes after Apple’s chief executive met with President Donald Trump last week.
The iPhone maker faces pressure from the Trump administration over where it chooses to manufacture its products. Apple assembles most of its products in China.
Apple said its $500 billion investment plan will include work with suppliers across the U.S. and production of content for its Apple TV+ media streaming service in 20 states, as well as new hires and research and development spending.
Apple said it “remains one of the largest U.S. taxpayers, having paid more than $75 billion in U.S. taxes over the past five years, including $19 billion in 2024 alone.”
The tech giant also said it would double its U.S. Advanced Manufacturing Fund to $10 billion from $5 billion currently, create a new manufacturing academy in Michigan, and grow its R&D investments in the U.S. to support cutting-edge fields such as silicon engineering.
