The launch of TSMC's second chip plant in Arizona is delayed, as is the first. The company previously said the plant would be operational in 2026, but now says that date has been pushed back to 2027 or 2028.
In addition, the chipmaker says the second plant was originally intended to produce advanced technologies. 3nm chips – can also be replaced with larger process chips …
TSMC Chip Plants in Arizona
In 2020, TSMC first announced plans to build one or more chip plants in Arizona. It was claimed that 1,600 jobs would be created in the US, including in the local supply chain.
The company secured significant subsidies from the US government to continue operations. Apple supported the proposal by lobbying on behalf of TSMC through the CHIPS Act, a $50 billion program aimed at promoting chip manufacturing in the United States.
The first plant was supposed to begin production in 2024, but construction has fallen behind schedule: reports of serious safety problems at the plant have been only partially denied by TSMC.
Controversially, the chipmaker decided to bring in hundreds of workers from Taiwan to speed up work, leading to conflicts with American workers, and set a new start date of 2025.
The second plant is now also delayed
Bloomberg reports that the start-up date for the second plant has also been delayed, perhaps even by two years.
Taiwan Semiconductor Manufacturing Co. announced another delay to construction of its $40 billion facility in Arizona […] Executives said their second plant, now under construction, will begin operations in 2027 or 2028, later than TSMC's previous forecast for 2026.
May also lose 3nm chip manufacturing capabilities
TSMC initially said that the first plant would produce 4nm chips, and the second one would produce more advanced 3nm chips. The company now says that may change.
TSMC previously said it would produce 3nm chips at a second plant, which is expected to be larger more advanced than the previous one. first in Arizona. But the company said Thursday that incentives from the U.S. government will help determine how advanced its internal technology will be, adding uncertainty to the project's outcome. […]
“Our overseas solutions are based on customer needs and the required level of government subsidies or support,” Chairman Mark Liu said during TSMC's earnings call in Taipei on Thursday.
This is a reference to the fact that White House has not yet provided any of the promised funding under the CHIPS Act.
Could be a double whammy
A delay of up to two years, combined with capacity cuts, could leave the second plant about five years behind Taiwan in chip production.
TSMC had always planned to reserve its most advanced processes for its domestic factories, but limiting production to 4nm at a time when its Taiwanese factories may have moved to the 1.4nm process would mean that the plant is unlikely to be able to produce chips for even the oldest Apple products still on sale at that time.
Photo by Adam Davis on Unsplash