Taiwan Semiconductor Manufacturing and the Arizona authorities are currently discussing the possibility of expanding chip packaging capacities at the factories of the Taiwanese manufacturer located on the territory of this American state.

Arizona Governor Katie Hobbs announced the talks on Tuesday, September 19, while in Taipei. The head of the region is a member of the American delegation that visited the island to discuss Taiwan’s role in the semiconductor supply chain. In this case, the process of negotiations between companies and officials is carried out.

United States Undersecretary of Commerce Laurie E. Locascio said the U.S. is discussing research and development with TSMC for the first time as part of an effort to introduce more technology to the world’s largest onshore contract chip manufacturer.

Packaging is currently a bottleneck in the production process of the most popular silicon – Nvidia artificial intelligence accelerators made by TSMC. A company from Taiwan has already committed to expanding packaging capacity at factories located on the island. At the same time, the chairman of the TSMC board said that supplies will be limited for another 18 months.

Anirudh Devgan, Chief Executive Officer of Cadence Design Systems, is convinced that packaging will become the main battleground for those countries that seek technological leadership. Combining the so-called chiplets into a multifunctional 3D chip is a way by which silicon developers expand their capabilities. The desire to create transistors of ever smaller sizes has already become something like a constant and has approached the boundary beyond which means overcoming the laws of physics, which is impossible and fantastic. At the same time, in a sense, this conceptual guideline allows to create of chips that have a power level sufficient to cope with workloads, including generative artificial intelligence.

The CEO of Cadence, based in California, says that the United States should take achieving leadership in this industry as a priority. According to him, in order to deal with packaging, it is not necessary to own a factory, since in some cases it is possible to collect chips from other plants. He noted that it is good for the US government to have such technology.

TSMC’s obligations in Arizona currently extend to two plants and investments totaling $40 billion. Advanced packaging could raise the ceiling of production capacity. In December last year, the company announced that it would offer 4-nanometer chips from its factory located in Arizona at the request of Apple, one of TSMC’s largest customers.

Katie Hobbs says that currently the Taiwanese manufacturer and this region of the USA are working on some mistakes, separately noting that she is impressed by the company’s speed in implementing projects and strict compliance with the schedule.

TSMC executives said that the commissioning of the brand’s first plant in Arizona has been postponed to 2025. They called the shortage of skilled labor the reason for adjusting the start-up period of the factory.