TSMC Delays Launch of Arizona Chip Production Facility to 2025
TSMC’s chip production in Arizona will not commence as planned, as the Taiwanese company has decided to postpone the start of 4-nanometer chip manufacturing at its inaugural factory in Phoenix. Originally scheduled for 2024, the production is now expected to begin in 2025 due to a shortage of skilled workers required to complete the construction on time, as stated by Chairman Mark Liu. To address this issue, TSMC is contemplating the possibility of deploying technicians from Taiwan to assist in the project’s completion.
The Arizona facility is a highlight of the CHIPS and Science Act, which was signed into law by President Biden last year. The measure aims to boost domestic semiconductor manufacturing and includes $52.7 billion in financing and tax credits for companies building factories in the states. TSMC is seeking $15 billion in tax credits for its two Arizona plants, even as it anticipates investing a total of $40 billion in the state.
The federal government is not immediately concerned about the lack of workers. In a statement, White House Representative Olivia Dalton says the CHIPS and SCIENCE Act provisions will get “the workforce we need.”
The delay continues to cause problems for tech companies that depend on TSMC’s manufacturing, especially Apple. Future iPhones and Macs will use 4nm and 3nm chips manufactured at the Phoenix factories. If the delay lasts, Apple may have to either stop product launches or rely on alternative manufacturers. Intel is pouring $20 billion into two Arizona manufacturing facilities as it begins chip production in 2024, but they may not be available for Apple’s needs.
The delay illustrates one of the key challenges in bringing more technology manufacturing to the United States. While there is no shortage of money or desire, fewer workers are being trained for jobs like those in Taiwan and other major manufacturing centers. It may be easy to find factory workers at Apple’s contractor Foxconn in China, for example, but they are nowhere near as common in the United States. Factories like the Mac Pro plant in Austin tend to focus on specialty products that don’t require large numbers of workers.
Despite that, there is pressure to get the TSMC factories up and running. Such moves are expected not only to boost the US economy, but also to diversify production away from China. The efforts could address issues related to working conditions and limit problems if U.S.-China relations deteriorate. They do not solve all problems (many components and raw materials also come from China), but they can reduce the consequences of political drama.
