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The highly anticipated start of Taiwan Semiconductor Manufacturing Co. (TSMC) chip production in Arizona has hit a roadblock. The company has officially confirmed a delay in the commencement of production, pushing the timeline from late 2024 to early 2025. The Arizona plant was set to manufacture chips, particularly for older Apple devices. Despite construction challenges and other hurdles, TSMC’s Arizona venture remains an essential development for the US tech industry.
TSMC first unveiled its ambitious plans to construct one or more chip plants in Arizona in 2020, with the promise of creating around 1,600 jobs within the local supply chain. To make this ambitious project a reality, the company sought substantial subsidies from the US government. Apple threw its support behind TSMC’s bid, actively lobbying for the chipmaker through the CHIPS Act, a $50B program aimed at promoting chip fabrication within the United States.
Apple’s involvement in the project was notable, as the Arizona plant would produce chips exclusively for older Apple devices. The joint efforts of TSMC and Apple in securing the necessary funds and support demonstrated their commitment to fostering domestic chip production in the US.
Unfortunately, TSMC faced significant construction delays, leading to a setback in the production timeline. Although the company initially downplayed the impact on chip production, recent developments indicate that the delay will, in fact, affect production plans.
TSMC attributed the delay to a shortage of skilled workers and technicians required to handle and install the advanced equipment at the Arizona facility. The challenges in recruiting a qualified workforce to facilitate the production setup have contributed to the revised timeline.
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The history of deals between American taxpayers and foreign companies to establish production facilities within the US has been mixed. A case in point is the failed deal with Foxconn in Wisconsin, where the state invested nearly a billion dollars in infrastructure for non-existent factories.
Despite the construction progress in Arizona, it came at a cost. TSMC demanded twice the initial cash offer and had to bring in hundreds of workers from Taiwan to overcome labor shortages. Furthermore, the plant has been marred by reports of serious safety issues, which the company only partially denied.