Apple Spark Hope For America's Semiconductor Comeback: Key Supplier TSMC Reportedly Begins Producing Chips In US For iPhone Maker

Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM), the leading global chipmaker, has reportedly started manufacturing A16 chips for Apple Inc. at its Phoenix, Arizona facility. This move is part of the U.S. strategy to enhance domestic semiconductor production.

What Happened: Two sources familiar with the situation told Business Insider that the production has commenced, although it has not yet reached full capacity. The chips are being produced in “small, but significant, numbers,” as initially reported by journalist Tim Culpan last month, the report said on Wednesday.

This development follows Apple Inc. (NASDAQ:AAPL) CEO Tim Cook‘s announcement two years ago that the company would be the primary customer of TSMC’s Arizona facility, marking a return to using U.S.-made chips after nearly a decade.

Despite initial challenges, such as construction delays and workforce issues, TSMC’s investment in Arizona is progressing well. The company plans to have the facility fully operational by the first half of 2025, aligning with the Biden-Harris administration’s goals to boost U.S. chip production and reduce reliance on Taiwan.

Analysts view this as a positive step for the U.S. semiconductor industry, potentially leading to job growth and long-term economic benefits.

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Why It Matters: The commencement of chip production by TSMC in Arizona is a significant development in the semiconductor industry. This move comes after Apple decided to skip TSMC’s 2nm chip for its iPhone 17 series, opting instead for a refined 3nm chip. This decision highlights the ongoing evolution and strategic choices in chip manufacturing.

Moreover, TSMC’s recent financial performance has been robust, with September revenues rising 0.4% month-over-month and a 39.6% year-over-year increase. This financial strength underscores the company’s capacity to expand its operations and invest in new facilities like the one in Arizona.

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Image via Unsplash

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari