Home Business Tech Ambitions Stalled: TSMC Delays Arizona Chip Factory, Dealing Blow to Biden’s Vision

Tech Ambitions Stalled: TSMC Delays Arizona Chip Factory, Dealing Blow to Biden’s Vision

by Editorial Desk
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Taiwan Semiconductor Manufacturing Company (TSMC), a leading chipmaking giant, has hit a roadblock in its plans to start production at its Arizona factory in the United States. This delay deals a significant blow to President Biden’s ambitions of bolstering the country’s technology capabilities.

Originally slated to commence next year, the chip manufacturing process at the Arizona facility has been postponed due to a shortage of skilled workers. This setback comes amidst the backdrop of an escalating trade dispute centered on technology between the United States and China.

On Friday, TSMC’s shares experienced a decline of more than 3% in Taiwan in response to the news. TSMC Chairman Mark Liu revealed during an earnings presentation that the production of advanced microprocessors at the Arizona plant will now begin in 2025. Construction on the factory began in April 2021, but the lack of workers with specialized expertise in semiconductor-grade equipment installation posed a challenge.

To address the issue, Mr. Liu mentioned that TSMC is actively working on improving the situation. The company plans to send experienced technicians from Taiwan to train local skilled workers in the US for a short period, hoping to bridge the skills gap.

Additionally, TSMC has forecasted a 10% decline in sales for the year, attributing it to a slowdown in semiconductor demand. The company’s profits for the three months ending in June dropped by approximately 23% to 181.8 billion Taiwanese dollars ($5.8 billion) compared to the same period last year.

TSMC’s decision to build a factory in Arizona was announced in 2020, during the tenure of former President Donald Trump. In December of the following year, the company announced a significant increase in investment, earmarking $40 billion for the project – one of the largest foreign investments in US history. At that time, Mr. Liu had anticipated the first semiconductor production facility to be operational by 2024, with the second one following suit in 2026.

The US-China technology dispute has led the US to take various measures against China’s chipmaking industry while investing billions of dollars to strengthen its own semiconductor capabilities. Currently, the US produces approximately 10% of the global supply of computer chips, which are vital components in a wide array of products, including cars and mobile phones. In 1990, the country’s chip production accounted for nearly 40% of the global total.

In response to these challenges and to bolster the country’s tech sector, President Biden signed legislation last year committing $280 billion to high-tech manufacturing and scientific research within the US. The investment package included tax incentives for companies willing to establish computer chip manufacturing plants in the country.

While the delay in TSMC’s Arizona factory poses a setback for President Biden’s technology ambitions, efforts continue to strengthen the US semiconductor industry and secure its position as a key player in the global tech landscape. Overcoming the shortage of skilled workers and boosting domestic chip production will be crucial in achieving these goals.

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