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Taiwan Semiconductor Manufacturing Company (TSM) has reportedly started making its first chips for a major customer at its new fabrication plant in Arizona.
The chipmaker is manufacturing A16 chips for Apple at Phase 1 of its Fab 21 in Phoenix, Arizona, independent journalist Tim Culpan reported in September, citing unnamed sources. The chips, which are being made with the 5nm process, are being produced “in small, but significant, numbers,” Culpan said.
Two people familiar with the matter told Business Insider that production of A16 chips has started but that the facility hasn’t reached full production levels, the publication reported Wednesday.
Production volume of the A16, which was launched in the iPhone 14 Pro in 2022, “will ramp up considerably” after the second stage of TSMC’s Phase 1 fab is finished, Taiwan-based Culpan said. That would put TSMC’s U.S. site on track to reach its target in the first half of next year, he said.
“The Arizona project is proceeding as planned with good progress,” a spokesperson for TSMC told Culpan. Neither Apple (AAPL) nor TSMC immediately responded to Quartz’s request for comment.
TSMC Arizona’s A16 chips are being manufactured with the same process that it uses for A16 chips in Taiwan, Culpan reported. In September, Bloomberg reported that TSMC’s yield rate, or the amount of functional chips it can produce per manufacturing process, at its Arizona fab is similar to yield rates at comparable facilities in Taiwan.
It’s not clear which Apple devices will use the chips, Culpan said.
The Taiwanese chipmaker makes an estimated 90% of the world’s advanced chips and counts chipmaking leader Nvidia (NVDA) and Apple as its top partners. In April, the Biden administration announced TSMC would receive $6.6 billion in grants through the federal Chips and Science Act to support its first major U.S. chipmaking hub in Arizona. TSMC’s two chipmaking factories in Arizona are expected to begin production in 2025 and 2028, while some of the anticipated Chips Act funding will support building a third facility.
The company is expected to report September-quarter revenue of $23.3 billion when it announces earnings Thursday, according to analyst estimates compiled by FactSet (FDS). Earlier this month, Bloomberg reported that the company had sales of $23.6 billion for the quarter.
