AMD Set to Become TSMC's Second Major Customer at Arizona Fab, Boosting US AI Chip Production

AMD set to become second largest client of TSMC's US fab; hinted at one year ago

TSMC's Fab 21 in Arizona has not yet fully commenced its first phase of mass production, but it is already producing Apple's A16 chip. Additionally, AMD may become the second major customer for Fab 21 after Apple, which is not surprising given that AMD announced a year ago its intention to be among the initial customers of this fab. Citing industry sources, independent journalist Tim Culpan pointed out that TSMC's Arizona Fab 21 will manufacture high-performance chips for AMD and is currently in the production planning phase. It is expected to enter the tape-out phase by 2025 and commence production, potentially utilizing the N4 process node. TSMC has not confirmed this report. However, AMD CEO Lisa Su hinted at this order as early as September 2023, during the Goldman Sachs Communacopia & Technology event. She noted that TSMC's Arizona plant is very important for AMD, stating, "We will be one of the early-stage customers. As a key client of the Arizona fab, we will soon initiate our first chip tape out process." She also emphasized that TSMC has always been an outstanding partner for AMD in advanced technologies, both in wafer manufacturing and packaging. At that time, Fab 21 faced delays due to equipment installation issues and labor disputes, pushing back the mass production timeline to 2025, but Su maintained her confidence in TSMC. It remains unclear which products AMD plans to commission Fab 21 to produce. Tom's Hardware commented that considering Fab 21's first phase will only introduce processes like N4 and N5, the orders from AMD are unlikely to involve consumer-grade processors more advanced than the RDNA 3 or Zen 4 architectures. As for data center-level or AI processors, it is known that AMD plans to launch the Instinct MI325X within 2024, followed by the MI350 and MI400 in 2025 and 2026, respectively. Narrowing down to the recent MI325X and MI350, since these two products are expected to utilize N4 and N3 processes, the MI325X seems more likely. Based on this speculation, the MI325X might first be released in the fourth quarter of 2024, with production handed over to Fab 21 in 2025. There is also the possibility that AMD could commission Fab 21 to manufacture new products that have not yet been disclosed to the public. Although it is anticipated that products manufactured at Fab 21 will still be sent back to Taiwan for packaging in the foreseeable future, TSMC's partner Amkor has announced at the end of 2023 that it plans to build a packaging and testing facility in Arizona. In October 2024, they further announced a collaboration with TSMC in advanced packaging technologies such as InFO and CoWoS. Once Amkor's new packaging and testing plant is operational, it theoretically enables TSMC to complete the packaging process locally in Arizona, especially since CoWoS technology is crucial for manufacturing AI processors. AMD's commissioning Fab 21 to produce high-performance chips holds significant implications for the US, as it represents a step closer to establishing a complete domestic supply chain for AI.

AMD to reportedly become TSMC's next major customer in Arizona -- HPC AI chips could start US production in 2025

AMD is set to produce high-performance chips at TSMC's new Arizona fab, making it the second high-profile client for the fab after Apple. Independent journalist Tim Culpan reports that sources close to the matter confirmed the agreement today, though TSMC declined to comment. TSMC Fab 21, located near Phoenix, Arizona, has begun trial production on its 5nm node, a process node family that includes the N4/N4P/N4X and N5/N5P/N5X processes. While its phase 1 production has not fully commenced, the Apple A16 Bionic chip is currently in production at Fab 21 using the N4P process. The A16 Bionic has been around since mid-2022 and is an excellent manufacturing test for the young fab, which reports "small, but significant" numbers of the chips currently being produced for various Apple products. Fab 21's current yields were described as similar to TSMC's Taiwan fabs by Bloomberg last month. However, the chip(s) that AMD plans to produce at Fab 21 is currently unknown. According to sources, production is currently in planning, with tape-out and manufacturing of the chip both set to happen in Arizona starting next year. Fab 21's Phase 1 is limited to the N4 and N5 technologies, barring the possibility of any consumer chips newer than RDNA 3 and Zen 4. AMD's enterprise AI chips in the CDNA 3 family powering Instinct MI300-series accelerators are a likely suspect. The MI325X, due to release in Q4 2024, is on the N4 node, while the upcoming MI350 will be on TSMC's N3. Arizona could be the place where the MI325X is manufactured after its initial production waves. It must be said that this is a speculative take; AMD could decide to produce a yet-unannounced AI or mobile chip at Fab 21 instead. AMD's HPC chips that are manufactured in Arizona must, at first, be shipped overseas for packaging. However, the recent agreement between Amkor and TSMC to team up for advanced packaging in Arizona will more firmly entrench an AI chip supply chain in the U.S. Amkor's $2 billion Arizona chip test and packaging facility, currently under construction and expected to begin production as soon as 2026, will be permitted to use TSMC's patented CoWoS and InFO packaging technologies, allowing AI and HPC chips to be packaged more completely in the U.S. GPUs specifically rely on CoWoS tech to connect with their high-bandwidth memory (HBM) chips. Amkor began construction on its Arizona fab counting on TSMC to become its major customer, but the agreement to work with the patented CoWoS technology is still a happy surprise for many. The potential AMD/TSMC agreement is momentous for both U.S. interests and TSMC. TSMC's Arizona fab has made many headlines since 2023 over various troubles it has encountered during its construction, mostly surrounding labor disputes between American and Taiwanese workers and leadership. The recent Apple production yields and today's AMD news will do much to increase faith in Fab 21. And the United States' significant financial backing ($6.6 billion in grants and up to $5 billion in loans) behind Fab 21 now appears to have a solid return on investment incoming, as AMD and TSMC will become pioneers in establishing a solid AI/HPC chip production supply chain stateside.

AMD should be TSMC's next huge customer for Arizona: HPC AI chips made in the USA in 2025

AMD is reportedly set to make next-gen, high-performance HPC AI chips at TSMC's new fab in Arizona, joining as the second major company making next-gen chips... the other is Apple. In a new post from insider Tim Culpan, who reports that AMD is "lined up to produce high-performance computing chips from TSMC Arizona, making the American fabless chip designer another client for the new US facility" according to his sources. Culpan explains that production is already in the planning phase, with tape out and manufacturing of AMD's next-gen HPC chips expected to kick off at TSMC's 5nm process node in 2025. Apple is the first customer of TSMC's fresh new fab in Arizona, which will be producing some of the A16 processors that go inside of the new iPhone 16 family of handsets. In the latest information he received, Culpan reports that Apple projects shipments of the A16 processor before the end of 2024, a "symbolic move" adds Culpan (he's right) that allows TSMC to ship ahead of the "early 2025" schedule. TSMC is in discussions with multiple clients to tape out chips from its fab in Arizona, with AMD "likely to be next" and making it the second customer, but it's also "possible another chip designer will land there first". This could be NVIDIA or Intel. For years and years, I've been writing about anything and everything Made in the USA, and this is another fantastic for the United States and its self-reliance on the semiconductor industry (where right now, the US is at the mercy of Taiwan and South Korea).