TSMC Arizona Chip Plant Will Be a 'Paperweight', Says Analyst

When it comes to reducing American dependence on Taiwan, the TSMC Arizona chip plant will be little more than a useless paperweight, says an analyst at one chip research firm. 'The TSMC Arizona fab is effectively a paperweight in any geopolitical tension or war [with China over Taiwan] due to the fact that it still requires sending the chips back to Taiwan for packaging,' said Dylan Patel, chief analyst at SemiAnalysis. 9to5Mac reports: A new report in The Information says while Apple chips may be made in the U.S., they will still need to be sent back to Taiwan before they get anywhere near an Apple device: 'The Arizona factory -- which has been a focal point of the Biden plan and will cost $40 billion to build -- will do little to make the U.S. self-reliant in chips. That's because many advanced chips made in Arizona for Apple or other customers such as Nvidia, AMD and Tesla will still require assembly in Taiwan in a process known as packaging, according to interviews with multiple TSMC engineers and former Apple employees.'

Given that TSMC has been struggling even to build a chip fab for older tech, there seems no prospect that it would ever attempt to set up chip packaging facilities in the U.S. 'Building this type of facility is a huge expenditure of [capital], time, and effort, and it does not seem likely that TSMC will want to do this anytime soon in the desert in Arizona, particularly given all the problems the firm has encountered with construction, costs and personnel so far,' said Paul Triolo, senior vice president for China at consultancy DGA-Albright Stonebridge Group.

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