TSMC#039;s Arizona Plant Struggling with Rising Costs and Logistics difficulties”> logistical obstacles
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Apple's chip manufacturing partner TSMC is facing major headwinds hampering the growth of its Arizona chip manufacturing facility, and the culture clash between American and Taiwanese employees does not appear to be worsening.
Resolution TSMC, the world's leading semiconductor manufacturer, has been widely welcomed to expand its presence in the US. Its strategic move aims to secure supply chains and bring critical manufacturing capabilities closer to key markets.
However, the project is currently grappling with rising costs and unforeseen logistical challenges that could impact timelines and budgets, according to Rest of World.
TSMC's Phoenix plant, a key component of the U.S. effort to revive domestic semiconductor manufacturing, was initially valued at $12 billion. However, the project's costs are rising due to disruptions in global supply chains and inflationary pressures, highlighting its critical role in the industry.
The construction phase of TSMC's Phoenix plant faced many obstacles. These include difficulties in purchasing raw materials and managing an international workforce. Notably, the American engineers struggled with the company's rigid hierarchy, while the Taiwanese veterans observed a lack of commitment among their American colleagues, highlighting the complexity of the project.
TSMC insiders said the company's success depends on a strict, military-style work culture. Engineers have 12-hour workdays and often work weekends as well.
Local sourcing of materials was less than ideal: many components still had to be imported from Asia, increasing costs and logistical challenges. Moreover, the project has faced delays in the delivery of equipment needed to produce the chips, which could push back its start date.
Effectively addressing the challenges facing TSMC's Phoenix facility is critical not only for the company to meet its projected schedule, but also for the U.S. to create a more resilient semiconductor supply chain. Failure to do so could result in significant delays and potential disruption to the industry.
Meanwhile, TSMC is preparing a new generation chip made using a 1.8 nm process technology. The iPhone is expected to move to 2nm technology by 2026, when the iPhone 18 series is released.
Although TSMC's 1.6nm technology is expected to debut in the same year, it will not be used in products until 2027.
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