On Tuesday, Arizona Governor Katie Hobbs said the state was working with Taiwan Semiconductor Manufacturing Company (TSM) to add advanced chip packaging capabilities at its factory in the state. It is understood that packaging has become the bottleneck of chip manufacturing with the greatest demand today. Although TSMC has pledged to expand its packaging capabilities in Taiwan, company chairman Mark Liu told a semiconductor conference earlier this month that supply constraints are expected to continue for another 18 months.
Additionally, at the same event, Anirudh Devgan, CEO of Cadence Design Systems Inc., said packaging will become a key battleground for countries seeking to establish technology leadership.
It is reported that TSMC’s current investment in Arizona covers two wafer fabs and an investment of US$40 billion, and adding advanced packaging to this effort will once again increase the possibility of production there. In December, TSMC said it would supply more advanced 4-nanometer chips from its Arizona factory at the request of Apple (AAPL.US), one of its largest customers.
Hobbs said Arizona and TSMC are "working out some kinks," but she's "very impressed with how quickly it's been built" and the project remains on schedule. TSMC executives said on their last earnings call that operations at the first Arizona factory would be delayed until 2025 due to a lack of skilled labor.