TSMC is postponing chip production in Arizona until 2025 due to a labor shortage

TSMC delays chip production in Arizona until 2025 due to labor shortages

Taiwan Semiconductor Manufacturing Co. said that production at its planned facility in Arizona will be delayed from late 2024 to 2025, marking a concerning setback as Washington seeks to build a more resilient chip manufacturing industry.

Chairman Mark Liu said there are several challenges TSMC faces at its US facility, including a shortage of skilled workers and higher costs compared to Taiwan. The company is relocating some employees to Arizona to assist with development.

Mark Liu, Chairman of Taiwan Semiconductor Manufacturing Co. Photographer: I-Hwa Cheng / Bloomberg

“We are working to improve this situation by sending skilled technical specialists from Taiwan to the United States,” Liu said during a conference call following the earnings report.

TSMC is preparing to build another plant in the US as tensions with China rise

The administration of President Joe Biden has made the development of domestic chip manufacturing a top strategic priority, supported by subsidies under the CHIPS Act that could exceed $50 billion. As the US faces growing tensions with China, policymakers are concerned about the vulnerability of Taiwan, which Beijing claims as its territory.

TSMC made these remarks as the company reported its second-quarter financial results and lowered its revenue forecast for 2023. The company, which manufactures chips for Apple Inc. and Nvidia Corp., now expects a 10% decline in dollar terms this year, compared to its earlier forecast of a single-digit decrease.

ASML Holding NV, a leading manufacturer of chipmaking equipment, warned that policymakers appear to underestimate the complexity of building new plants. While governments from Washington to Beijing and Berlin aim to develop domestic chip production capacity, such manufacturing is complex and requires deep expertise.

“It seems that people do not realize that as we begin building these factories around the world and expand globally, this expertise has been developed over the past couple of decades only in a few places on the planet—primarily in Taiwan, Korea, and to some extent in China,” said Peter Wennink, CEO of ASML. “Accessing the necessary skills and qualified workforce to meet construction timelines is a major challenge.”

Source: Bloomberg