TSMC Arizona Outage Saw Fab Halt, Apple Wafers Scrapped

Summary

Good Evening from Taipei,A power outage at an industrial gas facility servicing TSMC interrupted manufacturing at the company’s Fab 21 in Arizona late last quarter, sources told me. The incident stopped the flow of crucial inputs needed for chipmaking, forcing the facility to shut down for at least a few hours, I was told. As a result, the company had to scrap thousands of wafers that were in production for clients at the site which include Apple, Nvidia, and AMD.The event happened mid-September and was caused by a power fault at its outsourced vendor Linde, a British industrial gases and engineering company, my sources tell me. TSMC runs a lot of its own gas supply in Taiwan, but opted to contract the work out for its Arizona site. While mistakes happen, and insurance may cover some of the losses from the event, Linde has been put on notice to identify and rectify the cause of the outage, I was told. A PR representative for Linde didn’t answer multiple phone calls and emails from Culpium outlining the incident and requesting comment.Photo: Culpium & Adobe StockTSMC’s Arizona unit turned profitable in the first quarter of this year, a sign of the Taiwanese company’s ability to quickly scale up and churn out chips even in higher-cost locales like the US. But a 99% drop in net income in the third quarter to just $1.4 million had folks scratching their head. One writer was quick to jump to conclusions, with the assumption that “rising costs have taken out an enormous chunk of profits, putting pressure on the firm’s operations.” The September outage, which hasn’t previously been reported, offers an alternative explanation for the profit decline.“TSMC Arizona has begun to positively contribute to TSMC’s revenue. However, the company’s profit is influenced by multiple factors and should be read over time,” TSMC wrote in response to a detailed account of what Culpium has been told about the outage. “We also stated before that the ramp up for our overseas fabs will lead to ...