AMD is reportedly planning to manufacture high-performance chips at TSMC's new Arizona facility, becoming the second major client after Apple. According to sources cited by independent journalist Tim Culpan, the deal will see AMD's next-generation high-performance computing (HPC) and AI chips produced at TSMC’s Fab 21 in Arizona, which has begun trial production using its 5nm process node.

TSMC's Fab 21, located near Phoenix, is currently producing Apple’s A16 Bionic chip, utilizing the N4P process. Although the fab's Phase 1 operations have yet to fully ramp up, Apple’s A16 chips are already being manufactured as part of the trial run, with yield rates reportedly comparable to TSMC’s Taiwan fabs.

The specific AMD chips to be produced at Fab 21 are not yet confirmed, but sources suggest that AMD's enterprise AI chips, such as the MI325X from the Instinct MI300 series, could be among the first candidates. The MI325X, expected to launch in late 2024, uses TSMC's N4 process, making it a likely fit for production in Arizona. However, there is also speculation that AMD could produce other AI or mobile chips at the facility.

While initial chip production at the Arizona fab will need to be shipped overseas for packaging, the recent partnership between TSMC and Amkor Technology to establish advanced packaging operations in Arizona will create a more complete AI chip supply chain within the U.S. Amkor’s $2 billion chip test and packaging facility, expected to be operational by 2026, will use TSMC’s proprietary CoWoS and InFO packaging technologies, which are crucial for high-performance GPU production.

The agreement with AMD is a significant boost for TSMC’s Arizona fab, which has faced challenges during its construction, including labor disputes. The addition of AMD as a key client, alongside Apple, is expected to strengthen faith in the U.S.-based fab and the broader efforts to establish a domestic semiconductor manufacturing ecosystem. With the U.S. government providing $6.6 billion in grants and up to $5 billion in loans to support Fab 21, the deal marks a major step forward in securing a reliable supply chain for AI and HPC chips in the United States.