TSMC Delays Production At Arizona Fab, Amid Skills Shortage

Production start at vaunted Arizona chip factory pushed back a year by TSMC, due to shortage of skilled workers

Taiwan Semiconductor Manufacturing Company (TSMC) has made a significant announcement about its Arizona chip factory.

The chairman of the world’s largest contract chip maker, which is also a major Apple supplier, said during an earning call that TSMC will delay the start of chip production at the Arizona fab until 2025, due to a shortage of skilled labour, CNBC reported.

The delay is a blow to US officials touting American efforts to develop domestic chip manufacturing, which saw President Biden in December visit the TSMC construction site in Arizona.

Two fabs

Last December TSMC had announced that in addition to its first fab in Arizona, which had been scheduled to begin production of 5-nanometre chips in 2024, it had also started the construction of a second fab – scheduled to begin production of 4 or 3nm process technology in 2026.

TSMC has also previously said it would more than triple its investment to $40 billion in Arizona as it constructed the second chip factory.

TSMC manufactures the bulk of its chips in Taiwan, and has older chip facilities in China and Washington state.

It announced back in 2020 that it would be building a $12bn chip-making plant in Arizona, construction of which began in 2021.

TSMC had confirmed the overall investment for these two fabs would be $40 billion, representing the largest foreign direct investment in Arizona history and one of the largest foreign direct investments in the history of the United States.

In addition to the over 10,000 construction workers who helped with the construction of the site, TSMC Arizona’s two fabs are expected to create an additional 10,000 high-paying high-tech jobs, including 4,500 direct TSMC jobs.

When complete, TSMC Arizona’s two fabs will manufacture over 600,000 wafers per year, with estimated end-product value of more than $40 billion.

Apple has said it plans use computer chips built at TSMC’s Arizona facilities.

Skills shortage

But now TSMC said it will push back production at its new Arizona-based chip plant to 2025 due to a shortage of skilled labour. It had originally planned to begin chip production in 2024.

According to CNBC, TSMC Chairman Mark Liu told analysts on an earnings call Thursday that the company does not have enough skilled workers to install advanced equipment at the facility on its initial timeline.

Liu reportedly said the company is working to send trained technicians from Taiwan to train local workers to help accelerate installation.

The United States has sought to bolster chip production within America, after the severe semiconductor shortage during the Covid-19 pandemic.

In August last year President Joe Biden signed the landmark and bipartisan CHIPS and Science Act of 2022, which set aside $52 billion to significantly boost American semiconductor production and research over five years.