But advanced packaging is still conducted in Taiwan
(Image credit: Nvidia)
Nvidia and TSMC on Friday announced they had reached a significant milestone with the manufacturing of the first production Blackwell wafer at Fab 21 near Phoenix, Arizona. The achievement of making one of the most complex chips in history in the U.S. has strategic, symbolic, and political importance for both companies, but there is a major catch.
"This is a historic moment for several reasons," said Jensen Huang, chief executive of Nvidia, at the commemorative event. "It is the very first time in recent American history that the single most important chip is being manufactured here in the United States by the most advanced fab, by TSMC, here in the United States. This is the vision of President Trump of reindustrialization — to bring back manufacturing to America, to create jobs, of course. Still, also, this is the single most vital manufacturing industry and the most important technology industry in the world."
Production of Nvidia Blackwell B300 silicon (we presume these are the B300 chiplets, though as it is unconfirmed) in the U.S.— one of the most complex chip ever created — using TSMC's 4N fabrication process (a custom 4nm-class node for Nvidia) means that TSMC's Fab 21 is capable of making such large chips presumably with good yields (which apparently took some time to achieve), which may indicate that the fab is indeed as capable as ones that TSMC runs in Taiwan (something that we have already heard from TSMC's own comments, but those were made about smaller chips).
Strategically, it fulfills a key goal of the U.S. government's industrial policy: bringing more advanced semiconductor manufacturing to American soil. Therefore, Nvidia can now claim that it produces one of its most essential products in the U.S. and avoid tariffs if they are imposed on Taiwan-made goods. The same applies to TSMC as it spreads its production across the world, reducing risks for its business from potential interruptions caused by China. Eventually, TSMC is set to build Fab 21 phases that will produce chips on N3, N2, A16, and A14 process technologies in Arizona.
For decades, Nvidia — the world's most valuable company with a market capitalization of $4.5 trillion — has produced its chips exclusively in Taiwan with a brief production of the NV40 silicon at IBM's microelectronics fab in New York. Producing its key AI GPUs in the U.S. has a deep symbolic meaning for Nvidia, which is an American company.
For the U.S., the achievement has a deep political meaning too. For decades, the world's most sophisticated chips were developed in the U.S. and then almost exclusively made in Taiwan, which created heavy dependence on a nation located in a high-risk geopolitical region. Producing Blackwell — the most advanced and demanded AI GPU — in the world, in the U.S., now gives Washington a tangible outcome from years of subsidies and incentives under the CHIPS Act (and before it), and pressure from the Trump administration. To some degree, this even gives Washington political leverage when negotiating with partners.
While Nvidia's Blackwell silicon is now built in the USA, to make an actual Nvidia B300 out of them, they must be transported back to Taiwan and then integrated using CoWoS-L advanced packaging technologies with HBM3E memory at a TSMC facility. This not only makes these chips more expensive than those produced in Taiwan, but to a large degree, this strikes strategic and political advantages, leaving only the symbolic part.
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Still, this strategic dependence on advanced packaging in Taiwan is not going to last long. Both TSMC and Amkor are building advanced packaging facilities in the U.S., so when they come online, sometimes towards the end of the decade, that dependence will get significantly lower. Also, Micron and SK hynix are building DRAM production (Micron only) and HBM packaging facilities in the U.S., which will mark another significant step towards onshoring of production of strategically important components.
Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
This is great on so many levels. Hopefully my next computer build will have at least some parts sourced from the same continent instead of nearly 100% sourced from the other side of the planet.
Until the Amkor advanced packaging facility opens (I believe scheduled for 2028) this is going to continue being the case and thus it's purely symbolic political posturing. TSMC's own advanced packaging facility isn't supposed to break ground until 2028.
This is great on so many levels. Hopefully my next computer build will have at least some parts sourced from the same continent instead of nearly 100% sourced from the other side of the planet.
You may want to reconsider your perception:
China is arranging worldwide with plenty of countries, opening huge factories, bringing thousands or millions of citizens, producing and profiting. Whatever arrangement they do, stays there among the two parties; it doesn't go to the local country citizens' in any form or shape. Your roads will not be better and your city will not be cleaner. Expect the opposite.
Also, your products will be made by chineses, in a chinese factory, with chinese materials. They will be physically made in a facility which physical space will (most probably) also be legally chinese.
Apply the same rules here replacing "China" with "Taiwan" (if that makes any difference...)
It's expected to create something like 12,000 jobs with current investment plans. Those are high paying jobs generating tax revenue and supporting local economies. Not sure how that isn't going to benefit locally. I suppose your argument is the bulk of the profits go back to Taiwan corporate? Well not all of it, and it will spawn plenty of other business locally as well. That's just one company. The investments planned in the US right now are off the charts.
This is great on so many levels. Hopefully my next computer build will have at least some parts sourced from the same continent instead of nearly 100% sourced from the other side of the planet.
Consumer chips made in Arizona are less likely to use something as advanced as CoWoS-L, so maybe that's the bright spot here. But making it in Arizona only to ship it to Taiwan and back to the States is messy.
I think some Apple chips use CoWoS, not sure.
Zaranthos said:
It's expected to create something like 12,000 jobs with current investment plans. Those are high paying jobs generating tax revenue and supporting local economies. Not sure how that isn't going to benefit locally. I suppose your argument is the bulk of the profits go back to Taiwan corporate? Well not all of it, and it will spawn plenty of other business locally as well. That's just one company. The investments planned in the US right now are off the charts.
The investment is helpful. But whatever the numbers for TSMC are, the more important part is the contingency plan. If it hits the fan, TSMC could effectively become an American company. More Taiwanese engineers could be flown in on military transport planes one night. Getting fabs ready and people moved before that happens is preferable to having nothing.
I so strongly disagree with Trump for most things. This may be the one brought spot I can begrudgingly admit in his career. Kudos to America for getting to this point.
I so strongly disagree with Trump for most things. This may be the one brought spot I can begrudgingly admit in his career. Kudos to America for getting to this point.
For what exactly?
A fab that was already planned?
An advanced packaging facility which was already planned?
Drawing forward an advanced node facility due to demand?
These companies aren't stupid and are all too happy to play to the president's ego, but don't think what's going on has anything to do with him. TSMC's 5nm fab was instantly filled not because it's in the US, but because they needed wafer capacity. TSMC has stated several times that their N2 nodes have seen unprecedented demand so it makes sense to potentially even skip over N3 with regards to new construction.
The investment happening is due to market forces and should the market shift so will the investment.
A fab that was already planned?
An advanced packaging facility which was already planned?
Drawing forward an advanced node facility due to demand?
These companies aren't stupid and are all too happy to play to the president's ego, but don't think what's going on has anything to do with him. TSMC's 5nm fab was instantly filled not because it's in the US, but because they needed wafer capacity. TSMC has stated several times that their N2 nodes have seen unprecedented demand so it makes sense to potentially even skip over N3 with regards to new construction.
The investment happening is due to market forces and should the market shift so will the investment.
Trump initiated and pushed all of this over 5 years ago.
May 10, 2020
"The Trump administration is in talks with Intel and TSMC to spur development of new chip factories in the U.S. according to a report in the Wall Street Journal today. Many observers have for years bemoaned the loss of chip manufacturing capacity and expertise in the U.S. Any abrupt move to reinvigorate U.S.-based semiconductor manufacturing capacity, particularly for leading edge products, seems likely to receive broad support."
