AMD will produce high-performance chips at TSMC's new facility in Arizona, becoming the facility's second most prestigious customer after Apple.

TSMC Fab 21 in nearby Phoenix, Arizona has already begun pilot production of its 5nm process nodes, including the N4/N4P/N4X and N5/N5P/N5X families. While the first phase of production has not yet fully kicked off, Apple's A16 Bionic chips are already in production at Fab 21 using the N4P process.

The presence of the A16 Bionic has provided significant manufacturing testing opportunities at this facility since mid-2022. The factory reportedly produces a small but significant number of chips for a number of Apple products at the moment.

It is unclear what AMD's chip production plans are for Fab 21. Production is in the planning stages, with flow and manufacturing expected to take place in Arizona next year, the source said.The first phase of Fab 21 will be limited to N4 and N5 technologies, barring newer consumer chips such as the RDNA 3 and Zen 4.

AMD's CDNA 3 series of enterprise AI chips (for the Instinct MI300 series of accelerators) could be the focus. The MI325X will be released in Q4 2024 with an N4 node, while the MI350 will use TSMC's N3 node. Arizona could be the manufacturing site for the MI325X after initial production, but that's just speculation; AMD could decide to produce as-yet-unannounced AI or mobile chips at Fab 21.

HPC chips produced by AMD in Arizona would need to be shipped overseas for packaging first. However, Amkor and TSMC recently reached an agreement to jointly perform advanced packaging in Arizona, which will further solidify the AI chip supply chain in the US. Amkor is building a $2bn chip testing and packaging facility, expected to be in production as early as 2026, which will entitle it to use TSMC's CoWoS and InFO packaging technologies, allowing AI and HPC chips to be packaged more comprehensively in the U.S. GPUs in particular rely on CoWoS technology to connect to their high-bandwidth memory (HBM) chips. Amkor expects TSMC to be a major customer, but the partnership agreement with the proprietary CoWoS technology still came as a surprise to many.