TSMC says first advanced U.S. chip fab ‘dang near back’ on schedule. Here’s an inside look

Published

1 month ago

December 13, 2024

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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.

Taiwan Semiconductor Manufacturing Company’s first Arizona chip fabrication plant, or fab, is making history because it’s the most advanced chip fab on U.S. soil, and Apple has committed to being the site’s largest customer.

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.

Wafers cost upwards of $18,000, according to a Morgan Stanley report. They’ve continued to rise in price, taking TSMC’s stock value with it over the past couple years.

“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.

A deadly 7.4 magnitude earthquake in April briefly halted production in Taiwan and led to a $92 million loss for TSMC. The Arizona buildings are “well prepared” for earthquakes, Cassidy 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

Technology

Supreme Court upholds TikTok ban, but Trump might offer lifeline

Published

4 hours ago

January 17, 2025

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Supreme Court upholds TikTok ban, but Trump might offer lifeline

Jaap Arriens | Nurphoto | Getty Images

The Supreme Court on Friday upheld the law requiring China-based ByteDance to divest its ownership of TikTok by Sunday or face an effective ban of the popular social video app in the U.S.

ByteDance has so far refused to sell TikTok, meaning many U.S. users could lose access to the app this weekend. The app may still work for those who already have TikTok on their phones, although ByteDance has also threatened to shut the app down.

In a unanimous decision, the Supreme Court sided with the Biden administration, upholding the Protecting Americans from Foreign Adversary Controlled Applications Act, which President Joe Biden signed in April.

“There is no doubt that, for more than 170 million Americans, TikTok offers a distinctive and expansive outlet for expression, means of engagement, and source of community,” the Supreme Court’s opinion said. “But Congress has determined that divestiture is necessary to address its well-supported national security concerns regarding TikTok’s data collection practices and relationship with a foreign adversary.”

Supreme Court Justices Sonia Sotomayor and Neil Gorsuch wrote concurrences.

TikTok’s fate in the U.S. now lies in the hands of President-elect Donald Trump, who originally favored a TikTok ban during his first administration, but has since flip-flopped on the matter. In December, Trump asked the Supreme Court to pause the law’s implementation and allow his administration “the opportunity to pursue a political resolution of the questions at issue in the case.”

In a post on his social media app Truth Social, Trump wrote that the decision was expected “and everyone must respect it.”

“My decision on TikTok will be made in the not too distant future, but I must have time to review the situation. Stay tuned!” Trump wrote.

Trump began to speak more favorably of TikTok after he met in February with billionaire Republican megadonor Jeff Yass. Yass is a major ByteDance investor who also owns a stake in the owner of Truth Social.

Trump will be inaugurated Monday, one day after the TikTok deadline for a sale. TikTok CEO Shou Chew is one of several tech leaders expected to be in attendance, seated on the dais.

In a video posted on TikTok, Chew thanked Trump “for his commitment to work with us to find a solution that keeps TikTok available” in the U.S. He said use of TikTok is a First Amendment right, adding that over 7 million American businesses use it to make money and find customers.

“Rest assured, we will do everything in our power to ensure our platform thrives as your online home for limitless creativity and discovery as well as a source of inspiration and joy for years to come,” he said.

It's pretty clear Trump likes TikTok and is going to save it, says LightShed's Rich Greenfield

The nation’s highest court said in the opinion that while “data collection and analysis is a common practice in this digital age,” the sheer size of TikTok and its “susceptibility to foreign adversary control, together with the vast swaths of sensitive data the platform collects” poses a national security concern.

Under the terms of the law, third-party internet service providers such as Apple and Google will be penalized for supporting a ByteDance-owned TikTok after the Jan. 19 deadline.

If service providers and app store owners comply, consumers will be unable to install the necessary updates that make the app functional.

Representatives of TikTok did not immediately respond to requests for comment.

Users look for alternatives

White House press secretary Karine Jean-Pierre reiterated Biden’s support for the law in a statement, saying “TikTok should remain available to Americans, but simply under American ownership or other ownership that addresses the national security concerns identified by Congress in developing this law.”

“Given the sheer fact of timing, this Administration recognizes that actions to implement the law simply must fall to the next Administration, which takes office on Monday,” Pierre said.

Attorney General Merrick Garland and Lisa Monaco, his deputy, said in a release that the decision “enables the Justice Department to prevent the Chinese government from weaponizing TikTok to undermine America’s national security.”

Kate Ruane, the director of the Center for Democracy and Technology nonprofit, criticized the ruling, saying in a statement that it “harms the free expression of hundreds of millions of TikTok users in this country and around the world.”

In December, members of the House Select Committee on the Chinese Communist Party sent letters to Apple CEO Tim Cook and Google CEO Sundar Pichai, urging the executives to begin preparing to comply with the law.

Shou Zi Chew, CEO of TikTok, speaks to reporters outside the office of Sen. John Fetterman (D-PA) at the Russell Senate Office Building on March 14, 2024 in Washington, DC.

Anna Moneymaker | Getty Images

On Jan. 10, the Supreme Court heard oral arguments from lawyers representing TikTok, content creators and the U.S. government. TikTok’s lead lawyer, Noel Francisco, argued that the law violates the First Amendment rights of the app’s 170 million American users. U.S. Solicitor General Elizabeth Prelogar argued that the app’s alleged ties to the Chinese government pose a national security threat.

Many TikTok creators have been telling their fans to find them on competing social platforms such as Google’s YouTube and Meta’s Facebook and Instagram, CNBC reported. Additionally, Instagram leaders scheduled meetings after the Jan. 10 Supreme Court hearing to direct workers to prepare for a wave of users if the court upholds the law.

Chinese social media app and TikTok look-alike RedNote rose to the top of Apple’s app store Monday, indicating that TikTok’s millions of users were seeking alternatives.

The Chinese government also weighed a contingency plan that would have X owner Elon Musk acquire TikTok’s U.S. operations as part of several options intended to keep the app from its effective ban in the U.S., Bloomberg News reported Monday.

Should ByteDance decide to sell TikTok to a U.S. company or group of investors, potential buyers may have to pay between $40 billion and $50 billion, according to an estimate by CFRA Research Senior Vice President Angelo Zino.

WATCH: SCOTUS hears TikTok ban case

TikTok ban's fate is now in the Supreme Court's hands

Technology

Bumble founder Whitney Wolfe Herd to return as CEO

Published

5 hours ago

January 17, 2025

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Bumble founder Whitney Wolfe Herd to return as CEO

Whitney Wolfe Herd speaks onstage in Dana Point, California.

Joe Scarnici | Getty Images Entertainment

Bumble founder Whitney Wolfe Herd will return to the company as CEO, a little more than a year after she stepped down from the role, the company announced Friday.

The company’s current CEO Lidiane Jones has resigned for “personal reasons,” Bumble said. Jones previously served as the CEO of Salesforce’s cloud-based messaging platform Slack. She will continue to helm Bumble until Wolfe Herd takes over in mid-March.

“I am deeply grateful for the transformative work Lidiane has led during such a pivotal time for Bumble, and her leadership has been instrumental in building a strong foundation for our future,” Wolfe Herd said in a statement.

Bumble is a dating app that encourages women to make the first move. Wolfe Herd founded the company in 2014 in an effort to foster a safer online dating community. Bumble went public through a successful initial public offering in 2021, but its market cap has tumbled from its debut of $7.7 billion to around $847 million.

The company said Friday that it expects to report total revenue and Bumble App revenue above the midpoint of its provided outlook ranges for its fourth quarter, and adjusted EBITDA within the disclosed outlook range.

Shares of the company popped 6% in premarket trading on Friday.

In addition to the CEO transition, Bumble said Ann Mather, who serves as a lead director at the company, will become chair of the board of directors.

“We are fortunate to have a passionate and engaged founder in Whitney to drive Bumble’s vision as the Company accelerates the execution of its strategy,” Mather said in a statement.

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Technology

Bitcoin gains as Trump reportedly plans crypto executive order

Published

6 hours ago

January 17, 2025

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Bitcoin gains as Trump reportedly plans crypto executive order

Jakub Porzycki | Nurphoto | Getty Images

Bitcoin rejoined the crypto rally on Friday amid reports that President-elect Donald Trump could release an executive order making crypto a national priority as soon as day 1 of his new term.

The price of the flagship cryptocurrency was last higher by more than 2% at $103,174.90, according to Coin Metrics. The broader crypto market, as measured by the CoinDesk 20 index, was up another 1%, after a 4% increase Thursday.

Shares of exchange operators Coinbase and Robinhood advanced about 5% each. Trading activity in small cap cryptocurrencies benefits trading platforms. Appetite for smaller cap, higher risk coins has grown ahead of Trump’s inauguration, with litecoin surging 26% in the past two days.

The moves follow a Bloomberg report late Thursday that Trump could create the crypto advisory council he previously promised, giving the industry a voice within his administration. A bitcoin stockpile is part of discussions about a possible executive order that would cover several areas of crypto policy, the New York Times reported the same day.

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Bitcoin trades above $100,000 ahead of Trump’s inauguration

Coins and crypto projects outside of bitcoin arguably stand to gain more from clear and supportive policy and regulation as they’ve been more of a target of SEC lawsuits and alleged banking discrimination under the Biden administration. Some investors say bitcoin could see a rocket ship rally, however, if a national stockpile or reserve is established.

Bitcoin has been trading closely with stocks so far this year. It’s been in consolidation mode since late December, when Federal Reserve chair Jerome Powell sounded an inflation alarm that subsided this week after two cool December inflation reports. Bitcoin ETFs have seen more than $1 billion in inflows in the past two days.

Investors expect any announcements from the incoming administration next week to send bitcoin higher – potentially to a new record. Heightened expectations come after warnings from Wall Street this month that although having a pro-crypto Congress and White House in 2025 is sure to be supportive for innovation in the industry and asset class, it could take a while before the market feels the impact.

“The new administration and a new SEC chairman opens the door for new opportunity in cryptocurrency innovation,” JPMorgan analyst Kenneth Worthington said in a note this week. However, he added, “we don’t see a next wave of cryptocurrency [exchange-traded product] launches as being meaningful for the crypto ecosystem given much smaller market capitalization of other tokens and far lower investor interest.”

Bitcoin’s record is $108,327.01, from Dec. 17. It’s up 9% in 2025.