Arizona fabs are reaching Taiwan-level yields at a modest premium

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 13:41

   We don't have a lot of time, so we want to get into it. In April, it was announced that you achieved your first silicon output at the TSMC facility in Arizona on that two nanometer line. This administration and the private sector have talked a lot about on-shoring semiconductor manufacturing. would love your thoughts of the on-the-ground experience in Arizona. How's it going? What's not going well?

2. 14:02

   What does America need to do to get this right? Well, absolutely. First of all, it's a pleasure to be here. Love the theme. I think we're all super excited about winning the U.S. AI race. And I thought if we're going to talk about chips, David, I should actually bring one. Oh, awesome. If that's okay. A little bit of show and tell. So this is our latest generation AI chip. It's our MI355 chip, 185 billion transistors, takes about nine months to build, lots of technology on it.

3. 14:28

   That's a two nanometer? This is three nanometer and six nanometer, so lots of different chiplets. I'll be putting this on eBay later. I'm going to take it with me when I leave. How is that? Thank you. But look, to answer your question, I think these AI chips are extremely, extremely complex. They have so much technology on it. But we're super excited about the progress in U.S. manufacturing. I would say, you know, 12 months ago, people weren't sure that we could do leading-edge manufacturing in the United States.

4. 14:58

   We've been very early in Arizona with TSMC, and we did get our first chips out. They're actually four nanometer. But what we see from it is where there's a will, there's a way. And I think all of the conversation about onshoring manufacturing has been super good for the semiconductor industry and frankly for all of us in semiconductors we're in such an interesting place because your chips are so essential to ensuring that we are able to win the AI race that we want to make sure that there's a lot of geographic diversity and capability there. But the reports out were that TSMC couldn't get good qualified trained employees they had to bring folks over is that accurate and like again like if we're gonna scale like what's the the order of magnitude we're going from here is a 10x 100x and how are we going to build a workforce

5. 15:48

   to support this industry which is a completely new industry for america and lisa you have permission to speak freely the best way to say it is no matter when you start something new it's It's going to be hard. So sure, in the beginning, there were some issues of, you know, the TSMC has like a formula for how they build, and they just, you know, rinse and repeat, and they've learned how to do that well in Taiwan. So they had to learn how to do it well in the United States. But I have to tell you, we've been super impressed with the progress. And, you know, if we look at the main thing that we look at is, you know, yields and just how many chips do we get out on a given wafer, and I would say it's equivalent between what we get in Taiwan.

6. 16:30

   on and what we get in Arizona. What about cost? It's unrealistic to think the United States could compete on cost. Am I correct? We're going to pay a little bit more. Give us the ballpark, 50% more, 20%? Not 50% more. I mean, look, it's going to be more than 5%, but let's call it less than 20%. So low double digits. Let's say low double digits. And how does that impact the business, if at all, in terms of competition globally? Well, I think the important thing is, I mean, just think about, like, everybody wants a GPU, right? Like, if you look across the industry, you really say, you know, the people who are going to win in AI want to have as much compute in their foundation as possible, and they want assurance of supply. We want to be able to supply this no matter what happens. And so if you put that in context, you know, the fact that you're not going

7. 17:19

   for the lowest cost, you know, every minute of the day is okay. It's okay. Like, obviously, we're not going to build not everything needs to be in the most advanced technologies and so we have a very geographically diverse supply chain you know i think taiwan continues to be important in that view but the the focus from this administration on getting on firm manufacturing in a big way not in a small way i think is is very good how much time do we have if there was a disruption for whatever reason we can come up with hypotheticals in taiwan and we were unable to get chips from those factories what would that look like globally yeah you have to look across the supply chain but you know from a structure standpoint we all want to keep reserves for you know those those times but it's months it's

8. 18:10

   not years we said there was two really interesting posts over the last couple