TSMC Delays Start Of Chip Production In Arizona Plant

Chip giant Taiwan Semiconductor Manufacturing Co Ltd. or TSMC (TSM) has delayed its plan to initiate production at its factory in Arizona State, citing a shortage of skilled workers. The chip production, which was expected to start in 2024, has now been pushed to 2025.

TSMC’s planned fab in Arizona started construction in April 2021 with an aggressive schedule for mass production of chips to support the United States to meet its surging demand for new advanced chips.

During the chipmaker’s second-quarter earnings call on Thursday, Chairman Mark Liu said, “We are now entering a critical phase of handling and installing the most advanced and dedicated equipment. However, we are encountering certain challenges as there is an insufficient number of skilled workers with the specialized expertise required for equipment installation in a semiconductor-grade facility.”

Liu further said the company is working on improving the situation, including sending experienced technicians from Taiwan to train the local skilled workers for a short period of time. The company now expects the production schedule of N4 process technology to be pushed out by 2025.

In December 2022, at an event in the factory in Arizona that was attended by U.S. President Joe Biden, TSMC had said its new plant was expected to start producing 4 -nanometer or nm processors in 2024.

TSMC, which produces the most advanced processors, including the chips in Apple’s latest iPhones, iPads, and Macs, also said then that it would invest $40 billion in the new advanced chip factory, where Apple Inc. and other chip companies AMD and Nvidia would be first customers. Apple CEO Tim Cook tweeted then that the tech major would be the site’s largest customer.

The construction of a second factory in Phoenix was expected to start in 2023, to be ready by 2026, which would produce 3nm chips, the smallest and most complex processors currently available.

TSMC’s factories in Arizona are partially subsidized under the U.S. Government’s CHIPS and Science Act, signed by Biden in August last year, which is a legislative package that contains $52 billion for domestic chip production.

TSMC earlier expected the two factories in Arizona to produce more than 600,000 wafers annually by 2026, which, according to White House officials, would be enough to meet the entire US demand for advanced chips.

As per reports, the company also planned to produce 2nm chips by 2025 in its overseas facilities mainly in Taiwan.

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