Tag: TSMC

  • TSMC to Manufacture OpenAI’s AI Chips, Not Samsung Foundry

    TSMC to Manufacture OpenAI’s AI Chips, Not Samsung Foundry

    Key Takeaways

    1. AI-powered tools are attracting significant investor interest, but developing them can be costly.
    2. OpenAI is seeking to reduce operating expenses by creating its own hardware instead of relying on Nvidia.
    3. Samsung Foundry was considered for producing AI hardware, but OpenAI has chosen TSMC’s 3nm process instead.
    4. OpenAI plans to mass-produce its AI chips by 2026, with designs nearing completion.
    5. OpenAI is investing $500 million in its proprietary AI chip, aiming for long-term savings in operational costs.

    Development of AI-powered tools appears to be a profitable venture. An increasing number of investors are keen on backing these kinds of projects. Nonetheless, creating AI products can be pretty costly if one aims to compete with top players in the market. OpenAI, which is the parent organization of ChatGPT, is fully aware of these financial challenges, prompting them to seek ways to reduce operating expenses.

    OpenAI’s Strategy for Cost Reduction

    As per various reports, one of the strategies OpenAI intends to adopt for long-term savings involves crafting its own hardware to manage AI services. At present, the company relies on Nvidia, which holds a dominant position as the leading supplier of AI hardware globally. Nevertheless, Nvidia’s stronghold allows it to dictate prices that some companies, including OpenAI, find excessive.

    Samsung Foundry vs. TSMC

    Samsung Foundry has surfaced as a key potential producer for OpenAI’s AI hardware after a dialogue took place between Samsung Electronics Chairman Jay Y. Lee and OpenAI CEO Sam Altman during the week of February 3 to February 9. Some insiders hinted that the production of OpenAI’s AI chips using Samsung’s 3nm process was among the matters discussed. However, a recent report from Reuters suggests that OpenAI has opted for TSMC’s 3nm process instead.

    Future Plans and Investments

    The AI-centric firm won’t be the first significant player to part ways with Samsung after encountering issues and dissatisfaction with its wafer performance. Other companies like Qualcomm and Nvidia have also transitioned to TSMC for their needs. OpenAI is said to aim for the mass production of its AI chips by 2026. In the near future, TSMC might receive designs from OpenAI to kick off production tests, with reports indicating that the hardware design is nearing completion.

    OpenAI plans to invest approximately $500 million in the creation of its proprietary AI chip. Though this initial expense seems steep, the long-term savings in operational costs could be substantial. Apple previously took a similar path by moving away from Intel in favor of its own ARM chips for the Mac lineup.

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  • Snapdragon 8 Elite 2 Production by TSMC Confirmed in Report

    Snapdragon 8 Elite 2 Production by TSMC Confirmed in Report

    Qualcomm has unveiled its newest top-tier processor, the Snapdragon 8 Elite, which is made using TSMC’s advanced third-generation 3nm (N3E) technology. It looks like Qualcomm is sticking with a trusted ally for its upcoming chip, the Snapdragon 8 Elite 2, as whispers indicate it will be crafted with TSMC’s even more cutting-edge 3nm N3P process.

    Confirmation of Production

    A recent report from Gamma’s Hardware info (via Jukanlosreve) has confirmed that the Snapdragon 8 Elite 2 will indeed be produced with TSMC’s 3nm (N3P) tech. This implies that Qualcomm is still not ready to switch over to Samsung Foundry for its chip manufacturing needs.

    GOOD NEWS: THE PRODUCTION OF SNAPDRAGON 8 ELITE 2 BY TSMC HAS BEEN CONFIRMED. PIC.TWITTER.COM/EN0SDOR60G
    — Jukanlosreve (@Jukanlosreve) January 21, 2025

    Specifications of the Chip

    The Snapdragon 8 Elite 2 is said to carry the model number SM8850 and bears the codename Kaanapali. The report also suggests that Samsung made attempts to create the 8 Elite 2 using its own process, which was supposedly referred to as “KaanapliS.”

    Nonetheless, the report indicates that “KaanapliS” is no longer appearing in logistics data. This hints that the anticipated Samsung-made SM8850 is unlikely to come to fruition. Consequently, the production has been redirected to TSMC, with the new codename

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  • TSMC’s $65B Arizona Chip Plant Faces Challenges vs US Regulations

    TSMC’s $65B Arizona Chip Plant Faces Challenges vs US Regulations

    Taiwan Semiconductor Manufacturing Company (TSMC) is making a big move to increase semiconductor production in the United States, investing $65 billion in three factories located in Arizona. These new facilities are part of a larger plan to enhance domestic chip manufacturing and decrease dependence on Asia for essential technology.

    Challenges in the US

    Even with such a grand vision, TSMC has encountered a lot of challenges during its expansion in Arizona. Regulatory issues and compliance requirements have delayed progress, making the permitting and construction phases take at least double the time they would in Taiwan. Every construction step needs approvals, which adds a level of complexity that is not seen in Taiwan’s more efficient processes.

    Labor shortages have added to the difficulties, prompting TSMC to move half of its staff from Texas to Arizona. This relocation has notably raised costs due to moving and housing expenses. On top of that, gaps in the local supply chain have caused operational problems. For example, the price of sulfuric acid in the US is five times more than in Taiwan, forcing TSMC to ship materials from Taiwan to Los Angeles and then transport them to Arizona by truck.

    Technological and Cost Constraints

    The Arizona factory will primarily produce slightly older chip technologies, including the 4-nanometer chips currently being supplied to companies like Apple and Nvidia. The production of more advanced chips is expected to stay in Taiwan, where regulations and operational efficiencies make it easier to adopt cutting-edge technologies quickly.

    The high expenses associated with building in the US present another hurdle. TSMC has invested $35 million to establish 18,000 guidelines to meet local regulatory standards, and the overall costs for materials and labor are significantly higher than they are in Taiwan.

    Progress and Support

    Despite these obstacles, TSMC has marked a significant achievement by beginning the production of 4-nanometer chips in Arizona. TSMC CEO C.C. Wei has shared his belief that the quality of chips produced in the US will be on par with those manufactured in Taiwan.

    The project has also received considerable support from the US government, which includes $6.6 billion in grants under the CHIPS Act. This funding highlights the strategic importance of domestic semiconductor production in lessening reliance on Asia.

    While the Arizona factories are a notable step towards improving US chip production, regulatory and logistical issues still pose challenges. TSMC’s focus on older technologies for its US plants demonstrates the difficulties in mirroring Taiwan’s manufacturing efficiencies. Nevertheless, with ongoing investment and backing, the Arizona facilities could play a vital role in the US semiconductor strategy.

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  • TSMC Starts 4nm Chip Production in Arizona Amid Higher Costs

    TSMC Starts 4nm Chip Production in Arizona Amid Higher Costs

    TSMC has kicked off the mass production of its advanced 4nm chips at the Fab 21 facility in Arizona, which is a significant step for the U.S. semiconductor sector. This was confirmed by CEO C.C. Wei during a recent earnings call, stating that high-volume manufacturing began in Q4 2024, using the N4P process technology with yields similar to those of TSMC’s operations in Taiwan.

    TSMC’s New Chapter in Arizona

    This milestone highlights TSMC’s capability to provide top-tier manufacturing quality outside of its main base. However, chips produced at the Arizona facility come at a higher price compared to those made in Taiwan, primarily due to increased depreciation costs, a smaller production scale, an immature local ecosystem, and the additional shipping costs for transporting chips back to Asia for packaging. Wei pointed out the “geographic flexibility” of the chips made in the U.S., which is reportedly appreciated by customers even with the higher cost.

    Expansion Plans and Customer Engagement

    Currently part of TSMC’s $65 billion investment in U.S. manufacturing, the Arizona plant is operating Phase 1A with a monthly production capacity of around 10,000 wafers. Reports indicate that notable customers like Apple, AMD, and Nvidia are among the first to utilize this facility, with Apple testing its A16 Bionic chip for iPhones and S9 processors for Apple Watches produced there.

    Future Growth and Strategic Objectives

    TSMC intends to further increase its footprint, with Phase 1B expected to add an additional 14,000 wafers per month by the end of this year. The company also plans to introduce its 2nm process to Arizona by 2028, alongside a third fab slated for completion by 2030. These advancements are in line with the U.S. Chips and Science Act, which aims to enhance local semiconductor manufacturing. While chip packaging will still depend on Taiwan until Amkor’s U.S. packaging facility is operational, TSMC’s investment signals a move toward bolstering advanced chip supply chains within the U.S.

    Regulatory Environment and Industry Dynamics

    The U.S. and Netherlands have imposed stricter export controls to restrict China’s access to advanced semiconductors and AI technologies, citing national security reasons. This initiative impacts firms like Nvidia, TSMC, and ASML, enforcing tighter licensing regulations and increased scrutiny to stop advanced technologies from reaching China.

    Additionally, sources hint that TSMC has turned down an offer to produce Samsung’s Exynos chips, possibly due to worries about technology sharing with System LSI and commitments to vital clients such as Apple and Qualcomm. Meanwhile, Samsung is facing difficulties with its 3nm production, which is affecting its Exynos roadmap and device strategies.

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  • TSMC Rejects Samsung’s Request for Next-Gen Exynos Chips

    TSMC Rejects Samsung’s Request for Next-Gen Exynos Chips

    Samsung could be running into another challenge with its Exynos line of chipsets. It’s being said that Samsung Foundry may entirely bypass using Exynos chips for the Galaxy S25 series of flagship smartphones, and the situation doesn’t appear to be improving anytime soon. A recent report indicates that TSMC has turned down Samsung’s proposal to outsource the production of Exynos chips.

    No Next-Gen Samsung Exynos from TSMC

    It’s important to remember that there were speculations last year about Samsung finally opting to outsource Exynos chip production to TSMC. There were discussions happening internally about this shift, which could have benefited Samsung Foundry’s chip offerings. However, it looks like this agreement won’t be happening. According to insider @Jukanlosreve, TSMC (Taiwan Semiconductor Manufacturing Company) has refused Samsung’s proposal for Exynos production.

    Samsung Exynos Situation

    Sadly, there isn’t any information available on the reasons behind TSMC’s rejection of Samsung’s Exynos deal. If TSMC had partnered with Samsung, it would have added another significant tech player to its roster, joining the ranks of Apple, Nvidia, and Qualcomm. Jukanlosreve noted that TSMC, being the largest contract chip manufacturer, might have declined the agreement to safeguard its own internal processes.

    To clarify, Samsung Foundry has the capability to produce chips, unlike fabless companies such as AMD and Nvidia. This strategy could help TSMC avoid any potential leaks of their technology or processes. As far as we know, the upcoming Galaxy S25 series is set to launch with the Snapdragon 8 Elite SoC, meaning it could take some time before we see Exynos chips in the next generation of Samsung Galaxy devices. Stay tuned for more information!

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  • TSMC Approved for U.S. 2nm Chip Production Amid Taiwan Tech Easing

    TSMC Approved for U.S. 2nm Chip Production Amid Taiwan Tech Easing

    Taiwan’s Ministry of Economic Affairs has removed the restrictions that previously prevented TSMC from producing 2-nanometer chips in its overseas factories. This change is a significant shift from past rules that required foreign production to lag at least two generations behind domestic advancements.

    “Those were outdated regulations. The world has evolved,” remarked Minister of Economic Affairs J.W. Kuo during a press conference. “Private companies ought to make their own strategic decisions based on their technological advancements.”

    TSMC’s Expansion Plans

    This decision aligns with TSMC’s growth in Arizona, where total investments might exceed $65 billion. The company’s second fabrication plant is expected to begin producing 2nm and 3nm chips by 2028, after the first plant starts 4nm chip production in early 2025.

    Additionally, TSMC’s third facility in Arizona, which is set to be finished by the end of the decade, aims to focus on 2nm or more advanced technologies. Despite these new regulations, Minister Kuo noted that TSMC will be careful about investing the substantial $28 to $30 billion needed to establish a 2nm factory.

    Strengthening Global Partnerships

    This policy adjustment is part of Taiwan’s broader initiative to strengthen the global chip supply chain. In the coming year, the Ministry of Economic Affairs will concentrate on forming alliances with countries such as the United States, Germany, Japan, and the Philippines. They are also planning to establish an office in Fukuoka, Japan, to assist semiconductor-related businesses near TSMC’s forthcoming Kumamoto site.

    This change occurs as Taiwan updates its “Silicon Shield” strategy, which previously restricted the country’s advanced chip production to maintain a technological lead. The government recognizes the evolving semiconductor landscape, particularly with 60 percent of the world’s chip design companies being located in the U.S.

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  • TSMC Founder: Intel Should Focus on AI, Not Foundry Business

    TSMC Founder: Intel Should Focus on AI, Not Foundry Business

    Morris Chang, the founder of TSMC, recently critiqued Intel’s approach. He stated that the company should have placed greater emphasis on AI development instead of attempting to pivot into a contract chip manufacturing role. These remarks were made at the launch of his autobiography on Monday.

    Intel’s Leadership Changes

    This statement follows the resignation of Intel’s CEO, Pat Gelsinger. The board was dissatisfied with the progress of Gelsinger’s bold turnaround strategy, which was failing to deliver results. During Gelsinger’s tenure, Intel aimed to regain its status as the leading manufacturer of chips for external clients, a title currently held by TSMC.

    Chang’s Critique

    "Compared to AI, he appeared to concentrate more on becoming a foundry. Obviously, it now looks like Gelsinger should have prioritized AI instead," Chang remarked, taking a shot at Intel’s strategic direction. He also pointed out that Intel lacks both a definitive strategy and a CEO, labeling it a challenging scenario.

    Chang’s comments resonate strongly, particularly in light of Intel’s recent difficulties with AI. The company disclosed that it will not meet its $500 million sales goal for its Gaudi 3 AI accelerators this year, citing software challenges—another indication that the commitment to AI may have been insufficient.

    Insights from Chang’s Autobiography

    Chang’s autobiography, which chronicles his journey from 1964 to 2018, also sheds light on Intel’s historical choices. For instance, he discusses how Intel declined the opportunity to invest in TSMC during the 1980s, only to later become one of its major customers. The book further explores TSMC’s partnerships with firms like Apple and Qualcomm.

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  • TSMC 2nm Trial Run Exceeds Expectations with 60% Yield

    TSMC 2nm Trial Run Exceeds Expectations with 60% Yield

    Chips designed with the advanced 2 nanometer (2nm) technology are expected to deliver better performance and/or energy efficiency than their 3nm versions, which are already used in devices like the latest iPhone 16 Pro series, the newest MacBook Pros, and flagship Android devices, such as the OnePlus 13.

    Challenges in Production

    Nonetheless, the next-generation silicon’s potential benefits indicate that it is becoming increasingly challenging to manufacture, a reality Intel is currently experiencing with negative consequences. On a positive note, TSMC’s ongoing 2nm pilot project seems to be moving ahead of schedule, with production yields reported to be at or above 60%.

    Location of Production Trials

    The trial run is taking place at TSMC’s Zhuke Baoshan facility, located in Hsinchu County, Taiwan. The first 2nm production process is expected to transition to the Kaohsiung factory afterward.

    This facility is set to become the very first site for mass production of TSMC’s 2nm chips. The silicon is anticipated to hit the market by late 2025, likely emerging in products like the next-generation iPad Pro.

    Future Product Expectations

    Moreover, TSMC’s upcoming offerings are projected to include the A20 Pro for the next iPhones, MediaTek’s future flagship Dimensity 9600 SoC, NVIDIA’s Rubin series, and AMD’s Zen 6 platform.

    This might explain why Wei Zhejia, TSMC’s chairman and president, has described the demand as being "beyond imagining." The 2nm chips produced by TSMC are also expected to significantly contribute to the rollout of next-gen AI technologies.

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  • TSMC to Start 2nm Chip Production in Arizona by 2028

    TSMC to Start 2nm Chip Production in Arizona by 2028

    Taiwan Semiconductor Manufacturing Co. (TSMC) is set to introduce its 2-nanometer chip-making technology at its facilities in Arizona around 2028, as stated by Wu Cheng-wen, the head of Taiwan’s National Science and Technology Council (NSTC).

    Timeline and Regulations

    This schedule is in line with Taiwan’s rules, which require a three-year delay between the production of advanced semiconductor technology domestically and internationally. TSMC aims to begin large-scale production of 2nm chips in Taiwan by 2025, with initial test production already taking place at its site in Hsinchu County.

    Arizona Expansion Plans

    The expansion in Arizona will feature three fabrication plants (fabs). The first fab is expected to kick off production of 4nm chips in early 2025. The second fab is preparing to manufacture 3nm and 2nm chips starting in 2028. The third facility, which is part of a potential $6.6 billion subsidy agreement, will focus on 2nm technology or even more advanced options, with production anticipated to commence by late 2030.

    Progress in Taiwan

    Meanwhile, TSMC is also advancing its 2nm production in Taiwan. The Baoshan plant in Hsinchu County is planned to enter full production in 2025, followed by another plant in 2026. Additionally, a facility in Kaohsiung is on track to begin production in 2026, while another one is currently under construction.

    Just last month, TSMC received final approval for $6.6 billion in funding via the CHIPS Incentives Program. This agreement will help bring forth A16 technology, which incorporates advanced nanosheet architecture and a feature known as Super Power Rail tech. These enhancements will increase chip efficiency by allowing more logic to fit while also improving power delivery.

    Oversight and Strategy

    The transfer of cutting-edge technologies overseas is under strict scrutiny. Taiwan’s Ministry of Economic Affairs is closely watching the situation, emphasizing that TSMC must achieve domestic production of its most sophisticated processes before contemplating any overseas ventures. This approach helps Taiwan maintain its lead in the technology sector while supporting allied nations in boosting their semiconductor manufacturing capabilities.

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  • Samsung Considers Halting Exynos 2600 Production Due to Issues

    Samsung Considers Halting Exynos 2600 Production Due to Issues

    Samsung’s Exynos 2600 chip, once thought to be a groundbreaking advancement in mobile technology, might not be released at all. A recent report indicates that Samsung is thinking about stopping its production due to difficulties with the 2nm manufacturing process. This news brings up concerns about the future of Samsung’s own chip production and how it will compete in the semiconductor industry.

    Low Production Yields

    The Exynos 2600 was set to use Samsung Foundry’s cutting-edge 2nm process. Nevertheless, the production yield rate—a crucial factor that measures how many usable chips come from a single wafer—has apparently been quite low. Recent data shows yields ranging from only 10 to 20%, which is far from enough for mass production.

    Historical Challenges

    This isn’t the first time Samsung Foundry has faced these types of issues. Its 3nm process, utilized for the Exynos 2500, had similar problems, with yields dropping below 20%. This has sparked rumors that Samsung may consider outsourcing the production of its top Exynos chips to TSMC, which is well-regarded in advanced chip manufacturing.

    Shift in Production Strategy

    Complicating matters further, Samsung has reportedly closed down several manufacturing plants that were using older 4nm, 5nm, and 7nm technologies. The semiconductor division is also said to be dealing with a reduced workforce, restricted by South Korea’s regulation on a 52-hour workweek. A reorganization of Samsung’s application processor (AP) development team is in the works, but it may take years to fully implement.

    Potential Outsourcing Consequences

    While sending production to TSMC might help with yield problems, it could also raise production costs. Traditionally, Samsung has depended on in-house manufacturing to keep expenses low and maintain competitive prices for its products. Outsourcing might lead to even higher prices for consumers.

    Uncertain Future for Exynos

    Despite these challenges, Samsung Foundry is reportedly striving to enhance its 2nm process to stay competitive with TSMC. However, there isn’t much information available about the current state of progress, which leaves the future of Exynos in doubt.

    For consumers, Samsung’s possible switch to Snapdragon 8 Elite or MediaTek Dimensity 9400 for the Galaxy S25 series could offer improved performance and efficiency. Nonetheless, the potential cancellation of the Exynos 2600 underscores the difficulties Samsung faces in balancing innovation with cost efficiency.

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