TSMC postpones Arizona factory opening due to lack of skilled local talent.

Chip Production in Arizona Delayed​ to 2025 Due to Skilled Labor Shortage

Taiwan Semiconductor Manufacturing Co (TSMC),‍ the world’s largest chipmaker, has announced a delay ‍in production at its new Arizona chip plant. The delay, now set for 2025, is attributed to⁤ a shortage of skilled labor.

This setback comes amidst deteriorating trade relations between‍ Washington and Beijing over the‍ past several years.

TSMC Chairman Mark​ Liu​ broke the ⁤news to investors during a second-quarter earnings call on⁣ July 21. He⁣ explained that the company lacks enough skilled local workers to install ⁤advanced equipment at the new facility‌ within the original deadline.

TSMC initially proposed plans to build the Arizona facility in 2020, during former President Donald Trump’s tenure.

Last fall, the Taiwanese company announced its intention ‌to begin manufacturing ⁤5-nanometer chips at the Arizona facility by 2024.

Mr. Liu had hoped to have the first of TSMC’s two semiconductor production facilities at the Arizona plant operational by⁤ 2024, with the second coming online by⁢ 2026.

TSMC is the primary chip manufacturer for Apple’s iPhones, and Apple⁤ CEO Tim Cook plans to source computer chips from the Arizona plant.

Apple’s next iPhone processor is rumored to ‍be based on the company’s 3-nanometer process technology.

The American phone maker typically releases its latest iPhone in September and is likely to order ⁣chips from TSMC in the third quarter.

Plan to Bring Chip Production Home to America Faces Delays

Semiconductor chips are essential components in everything from cars and‍ computers to mobile phones.

Since the Trump administration, the⁤ United States has been striving to bring semiconductor manufacturing back home after⁤ relying ​on chip imports from East Asia for decades.

In 1990,‍ the United States accounted for nearly 40 ⁤percent of global ⁤computer chip production. However,​ it ​now only produces around 10 percent of the global supply.

The ‌vulnerability of America’s extended supply chain across ⁣the Pacific for critical computer chips has become a national security risk.

Fears of China’s growing chipmaking industry have prompted Washington to impose measures against Beijing while investing billions of dollars to strengthen America’s semiconductor industry.

The pandemic further highlighted the vulnerability of American dependence​ on computer chips from countries like Taiwan, which is increasingly susceptible to attacks from China.

Last summer, the​ Biden administration passed the CHIPS and Science Act, which allocates $280 billion to bring more domestic chip development and manufacturing back home and create jobs.

The investment includes tax​ breaks for foreign companies that establish computer chip ⁣manufacturing plants in the United States.

In December, TSMC informed​ the Biden administration that it would triple its investment in the project to $40 billion, making it one ‌of the ​largest foreign investments in American ‍history.

The Wall Street Journal reported that the company initially applied for $15 billion in funding under⁤ the CHIPS act.

Taiwanese Chip Maker to Build Chips in the US

TSMC assured ​the Biden administration that⁣ it would meet the act’s conditions by creating over 1,600 high-tech professional jobs and generating thousands of indirect jobs‍ in the semiconductor ecosystem.

However, Mr. Liu ​revealed that the plant, under construction since April 2021, now faces a shortage of workers ⁢with the specialized expertise required for equipment installation in a semiconductor-grade facility.

The TSMC Chairman ‍added that the company is working to improve⁣ the situation by sending experienced technicians from Taiwan to​ train local skilled workers ⁢in the United States for a short period of time.

In late June, TSMC confirmed to Reuters that it was working ‍to send technicians from Taiwan to train local workers and expedite the launch, ensuring a fast ramp-up‌ of⁣ its factory.

“The additional number who will be going has yet to be determined,” and Taiwanese workers “will only⁤ be in the state for a limited time,” the company ⁢stated.

ASML Holding NV CEO Peter Wennink told Bloomberg that the delay was not unexpected, given the challenge of accessing skilled workers for building semiconductor fabrication plants.

“People don’t seem to realize that when we start building those fabs across the ‌globe now‍ and…