Enlarge / Apple wants to build more of its A- and M-series chips in the United States. (credit: Apple)

Late last year, Apple CEO Tim Cook announced that the company would definitely be buying chips made at Taiwan Semiconductor's new Arizona-based fab once it had opened. Apple working with TSMC isn't new; most, if not all, of the processors currently sold in Apple's products are made on one of TSMC's many manufacturing nodes. But being able to buy them from a US-based facility would be a first.

The issue, as outlined by some TSMC employees speaking to The Information in September , is that the Arizona facility would manufacture chips, but it wouldn't be building a facility to handle packaging. And without packaging, the Arizona factory would essentially be a "paperweight," requiring any chips made there to be shipped to Taiwan for assembly before they could be put in any products.

Today Apple announced that it had solved that particular problem, partnering with a company called Amkor to handle chip packaging in Arizona. Amkor says that it will invest $2 billion to build the facility, which will "employ approximately 2,000 people" and "is targeted to be ready for production within the next two to three years." Apple says that it has already worked with Amkor on chip packaging for "more than a decade."

Enlarge (credit: NurPhoto / Contributor | NurPhoto )

Today, Intel officially announced the termination of a $5.4 billion deal with Tower Semiconductor that was supposed to propel Intel closer to its "goal of becoming the second-largest global external foundry by the end of the decade."

Yesterday, the deadline for completing the deal passed after the tech companies failed to secure timely regulatory approval in China, Intel said in its press release.

Intel and Tower reached the deal back in February 2022. According to Bloomberg , this week's scrapping of the deal was expected, as Chinese officials dragged their feet for months, ultimately never signing off on it.

Enlarge / Silicon wafers from a TSMC factory. (credit: Taiwan Semiconductor Manufacturing Co., Ltd.)

It's been rumored for several months now that Apple will be using a new 3 nm manufacturing process from Taiwan Semiconductor (TSMC) for its next-generation chips, including M3 series processors for Macs and the A17 Bionic for some next-gen iPhones . But new reporting from The Information illuminates some of the favorable terms that Apple has secured to keep its costs down: Apple places huge chip orders worth billions of dollars, and in return, TSMC eats the cost of defective processor dies.

At a very high level, chip companies use large silicon wafers to create multiple chips at once, and the wafer is then sliced into many individual processor dies. It's normal, especially early in the life of an all-new manufacturing process, for many of those dies to end up with defects—either they don't work at all, or they don't perform to the specifications of the company that ordered them.

Normally, chip designers would have to pay for each individual die whether it worked or not; that's a major reason why companies sell cut-down or "binned" chips that run at lower clock speeds or have parts switched off. That way, they can recover some money from a defective die instead of none. Apple's orders with TSMC are apparently large enough that TSMC can afford not to charge Apple for defective dies.

Enlarge / In a few years, Phoenix residents will be seeing a lot more of this logo. (credit: SOPA Images )

Reuters reports that TSMC—Taiwan Semiconductor Manufacturing Company, the chip foundry making advanced processors for Apple, AMD, and Qualcomm—is beefing up its plans to build factories in Arizona while turning away from an advanced plant in Europe.

Last year, TSMC announced that it would invest $10-$12 billion to build a new 5 nm capable foundry near Phoenix, Arizona. According to Reuters' sources, TSMC officials are considering trebling the company's investment by building a $25 billion second factory capable of building 3 nm chips. More tentative plans are in the works for 2 nm foundries as the Phoenix campus grows over the next 10-15 years as well.

US President Joe Biden called for $50 billion to subsidize US chip manufacturing facilities, and the US Senate may take action on the item this week. Strong domestic manufacturing capacity is seen as critical, since US chip firms such as Nvidia and Qualcomm rely on Asian manufacturing facilities. TSMC would be competing with Samsung and Intel to secure these Biden administration subsidies.

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Samsung Electronics said a global semiconductor shortage that has hit global carmakers could also disrupt orders for the memory chips used in smartphones, as manufacturers rushed to respond to the crisis.

The warning from the world’s biggest memory chipmaker comes as companies and governments grow concerned that constrained chip manufacturing capacity could derail countries’ economic recoveries from the coronavirus pandemic.

The rush by semiconductor foundries to meet demand for auto chips means many are now operating at full capacity, limiting their ability to take on new orders, which could in turn slow deliveries of chips designed for mobile devices.

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