Chip board with TSMC logo

TSMC delays opening of Arizona chip plant

Image credit: Taiwan Semiconductor Manufacturing Co., Ltd.

Taiwan Semiconductor (TSMC) has delayed the start of production at its new Arizona chip plant to 2025, due to a shortage of skilled workers.

The company's chairman has revealed that TSMC has not been able to recruit enough skilled workers to install advanced equipment in the original timeline, and is now planing on sending Taiwanese technicians to train US workers. 

The Arizona factory, which has been under construction since April 2021, was originally scheduled to begin production of 4-nanometre chips in 2024. A second fab that will produce smaller, more complex 3nm chips is scheduled to open in 2026.

TSMC made the announcement during its second-quarter earnings call on Thursday, July 20th. The company's chairman Mark Liu stated that TSMC was “encountering certain challenges, as there is an insufficient amount of skilled workers with the specialised expertise required for equipment installation in a semiconductor-grade facility” in the US.

Last month, Nikkei Asia reported that a “task force” of more than 500 experienced workers was heading to the Arizona plant, while also quoting analysts who said the slow progress is due to weaker market demand for TSMC’s chip production.

The announcement is a blow to the US' ambitions to boost domestic production of semiconductors. As part of this effort, several US-based technology companies have already announced their plans to use the chips produced in the Arizona plant, including Apple, Nvidia and AMD.

The US has restricted China’s access to semiconductor technology since at least 2019 when the Trump administration banned Huawei from buying vital US technology. In August 2022, the US further prohibited the export of four technologies tied to semiconductor manufacturing, citing how they were “vital to national security” and signed a “historic” bill providing financial incentives for companies looking to produce chips in the US. 

TSMC first announced its plans to build a facility in Arizona in 2020. Two years later, the company said it would more than triple its investment in the project to $40bn (£31.1bn), in what was considered one of the largest foreign investments in American history.

On Friday, TSMC's shares closed more than 3 per cent lower in Taiwan.

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