TSMC, the Taiwan-based semiconductor manufacturing company, has announced a delay in its plans to produce chips in its Arizona factory. The company, which was scheduled to begin 4-nanometer chip production in 2024, has now pushed the start date to 2025 due to a lack of skilled workers available to complete construction on time. To solve this issue, TSMC is considering loaning technicians from its home country to help complete the project.
This news comes as a blow to the CHIPS and Science Act, a measure signed into law by President Biden last year to enhance domestic semiconductor manufacturing. The act includes $52.7 billion in funding and tax credits aimed at encouraging companies to build semiconductor factories in the United States. TSMC is seeking $15 billion in tax credits for its two Arizona plants and plans to invest a total of $40 billion in the state.
While the federal government does not seem immediately concerned about the worker shortfall, stating that provisions in the CHIPS and Science Act will address the workforce needs, the delay poses problems for tech companies that rely on TSMC’s manufacturing, particularly Apple. Future iPhones and Macs were expected to use 4nm and 3nm chips produced at the Phoenix plants. If the delay continues, Apple may have to postpone product launches or seek alternative manufacturers. Although Intel is investing $20 billion in two Arizona facilities set to begin chip production in 2024, they may not be able to meet Apple’s needs.
This delay highlights one of the significant challenges in bringing more tech manufacturing to the US. While there is no lack of funds or desire to increase domestic manufacturing, the lack of trained workers is a significant hurdle. Countries like Taiwan and China have well-established production hubs with skilled workers readily available. Apple contractor Foxconn, for example, can easily find factory workers in China, but they are not as abundant in the US. Additionally, US-based plants tend to focus on niche products that require fewer employees, such as the Mac Pro factory in Austin.
Nevertheless, there is considerable pressure to get the TSMC factories up and running. Beyond boosting the US economy, these moves aim to diversify manufacturing away from China. This effort could address labor condition concerns and reduce dependence on China for crucial components and raw materials. While it may not solve every manufacturing issue, it could help mitigate potential fallout from political tensions between the US and China.
In conclusion, TSMC’s delay in chip production at its Arizona factory has raised concerns for tech companies, particularly Apple, and highlights the challenges of expanding tech manufacturing in the US. A shortage of skilled workers and the need to diversify manufacturing away from China are key factors in this delay. Nonetheless, the push to establish these factories is crucial for the US economy and reducing reliance on China.
