Taiwan Semiconductor Manufacturing Co. (TSMC) plans to open a chip packaging plant in Arizona by 2029, an executive told Reuters. Modern artificial intelligence chips, such as those made by Apple and Nvidia, are not single chips but several chips glued together using advanced packaging technologies. This step has become a major supply bottleneck for Nvidia and other companies. In a January earnings call, TSMC said it was applying for permits to begin construction of its first advanced packaging plant in an existing Arizona facility, but did not provide a timeline for when it would come online. Stephen Nellis and Max Cherney for Reuters:
That said, 2029 remains a long way off. Amkor aims to start its own Arizona packaging production earlier (targeting early 2028), and broader rumors suggest TSMC could eventually scale to multiple packaging facilities as part of a massive Arizona “gigafab” cluster. Taiwan will continue to dominate CoWoS (Chip-on-Wafer-on-Substrate) packaging capacity in the near term, with aggressive expansions already ramping there. TSMC is responding to customer demands (and likely U.S. incentives/political pressure) by slowly localizing more of the supply chain. It’s smart risk management and good news for American tech sovereignty in the long run — but the timeline highlights how difficult it is to replicate Taiwan’s ecosystem quickly. For AI leaders hungry for more capacity now, the packaging crunch isn’t going away anytime soon. Patience (and continued heavy investment) will be required. Support MacDailyNews at no extra cost to you by using this link to shop at Amazon. The post TSMC plans to open chip packaging plant in Arizona by 2029 appeared first on MacDailyNews. You're currently a free subscriber to MacDailyNews. For the full experience, upgrade your subscription.
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