TSMC says its $40 billion chip project in Arizona faces a further delay

19.01.2024

TSMC has announced a delay in the operational timeline for its second factory in Arizona, marking a setback for the world’s largest chipmaker and impacting US President Joe Biden’s initiative to bolster American manufacturing. Instead of the initially anticipated start in 2026, Chairman Mark Liu stated during an earnings call that the facility is now expected to be operational in 2027 or 2028, citing the need to assess the incentives provided by the US government.

Although construction on the factory’s shell has commenced, TSMC is engaged in discussions with US officials regarding potential incentives, including tax credits. This marks the second time the Taiwanese chipmaker has adjusted its plans in Arizona. In 2022, TSMC announced the construction of a second semiconductor plant, augmenting its existing facility and increasing its overall investment in the state from $12 billion to $40 billion—a move previously applauded by President Biden as a resurgence of US manufacturing.

However, in the past year, TSMC had to postpone production at its first facility from 2024 to 2025 due to a shortage of specialized workers. Additionally, the company is now reconsidering the types of products to be manufactured in the second facility. Initially, plans indicated the production of 4-nanometer chips in the first facility and 3-nanometer chips in the second, representing some of the most advanced semiconductors. Chairman Liu suggested that government incentives would influence the decision on the technology deployed in the second facility. Despite these challenges, the first facility remains on schedule for the production of 4-nanometer technology starting in the first half of 2025, according to the company executive.