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The construction of TSMC’s Arizona chip plant, which is slated to manufacture chips for older Apple devices, has hit a major roadblock, causing the project to exceed its budget and fall behind schedule. To address these issues, TSMC is reportedly considering bringing in hundreds of additional workers from Taiwan.
The news comes on the heels of mounting concerns about safety at the plant, with reports of multiple accidents and allegations that an active shooter drill was used as a cover-up for evacuating the facility following a gas leak.
From the outset, financing the construction of TSMC’s Arizona chip plant has been a contentious matter. Soon after the announcement, it was revealed that the company was seeking substantial subsidies from the US government to proceed with the project. Apple threw its weight behind TSMC’s bid for subsidies and actively lobbied on the company’s behalf.
Initially, these subsidies seemed likely to materialize through the CHIPS Act, a $50 billion program aimed at promoting domestic chip fabrication in the United States. However, TSMC’s demands for funding have exceeded the amount originally offered, raising questions about the viability of the financial arrangements.
According to Nikkei Asia, TSMC has now conceded that the project’s cost has exceeded its initial expectations, although it maintains that the excess is “manageable.” Moreover, the construction work has fallen significantly behind the planned schedule. While chip production was initially projected to commence in September of this year, TSMC now expects the facility to be operational no sooner than February or March of the following year.
This delay raises concerns about when the plant will be fully operational. TSMC insiders have attempted to assuage fears, asserting that the company had always accounted for potential setbacks, and thus, the project’s delay “does not necessarily mean” that initial chip production will be affected.
Blame for the construction setbacks has fallen on the 12,000 US workers involved in the project, who are deemed “costly” and present communication challenges. To expedite the work, TSMC intends to bring in hundreds of experienced workers from Taiwan.
Discussions are underway between TSMC, its suppliers, and the US government to facilitate the application process for non-immigrant visas, to dispatch more than 500 skilled workers as early as July. These workers would assist in accelerating the construction of cleanroom facilities, as well as the installation of pipelines and other equipment.
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An executive within the chip supply chain revealed, “There are not enough US workers who have good firsthand experience specifically in building semiconductor manufacturing facilities, and many are not familiar with the requirements for chipmaking plants. That has caused delays in multiple installation works.”
The complexity of communication and the associated costs of working with foreign construction workers in an unfamiliar environment has also contributed to the challenges. Consequently, TSMC and its suppliers believe that sending experienced construction contractors and workers from Taiwan, who has previously collaborated with chip suppliers, could save both time and expenses.
The outcome of the visa application process remains uncertain, leaving questions about whether US workers will be replaced or supplemented by their Taiwanese counterparts. As TSMC grapples with construction hurdles, the fate of the Arizona chip plant hangs in the balance.