$Taiwan Semiconductor (TSM.US)$ accomplished better-than-expected production yields at its first Arizona plant than at its Taiwan facilities, which is a crucial yardstick for a plant's profitability.
The contract chipmaker's Phoenix facility reported yields roughly 400 bps above those at home, Bloomberg cites head of Taiwan Semiconductor's U.S. division Rick Cassidy.
Prior reports indicated Taiwan Semiconductor's production yield at the Arizona facility matched its Taiwan facilities.
The contract chipmaker's update coincides with tensions over a possible violation of the U.S. semiconductor embargo on China, rendering the chipmaker vulnerable to regulatory scrutiny.
Taiwan Semiconductor stopped shipments to a customer after finding its chips had reached Huawei Technologies Co. The U.S. semiconductor ban on China has led to illegal attempts by Chinese firms to access restricted chips.
Huawei, a leading provider of 5G network equipment, has been a focal point in the tech standoff between Beijing and Washington since the U.S. imposed sanctions in 2019 over alleged espionage concerns, which Huawei denies.
Taiwan Semiconductor, a key U.S. CHIPS Act contender, is seeking $6.6 billion in U.S. grants, $5 billion in loans, and substantial tax credits to build three fabrication plants (fabs) in Arizona.
Cassidy told Bloomberg Taiwan Semiconductor that they may consider expanding further in the U.S., contingent on additional government support. The Phoenix complex has the potential for at least six fabs.
Taiwan Semiconductor's Arizona site initially battled labor shortages and safety issues, delaying the production timeline.
Also this week $NVIDIA (NVDA.US)$ chief Jensen Huang acknowledged the resolution of a Blackwell chip flaw thanks to its longtime partner Taiwan Semiconductor.
He also admitted that everything is going fine with its partner, snubbing reports hinting at possible friction between the companies.
Needham analyst Charles Shi expects Taiwan Semiconductor to reach a revenue of $90 billion in fiscal 2024 following upbeat third-quarter print led by 3nm thanks to $Apple (AAPL.US)$.
He expects the revenue to hit at least $110 billion in fiscal 2025 (up from $96 billion) and the margin to return to 60% in the second half of 2025.
