TSMC delays Arizona factory that will eventually build chips for iPhones and AI

The world’s biggest chip maker is postponing the start of 4nm chip production at its new facility in Phoenix, Arizona, to 2025, blaming labor shortages. Apple has said it intends to eventually source chips for its iPhones and MacBook models from a Taiwan Semiconductor Manufacturing Company (TSMC) plant in the US, while Nvidia and AMD have also committed to using its production capacity.

The chipmaker’s first Phoenix-based fab, which is slated to begin construction in 2021, was originally projected to start producing 4nm chips next year. A second fab that will produce smaller, more complex 3nm chips is due to open in 2026.

during the company Q2 earnings call On Thursday, TSMC President Mark Liu said the company “is facing some challenges because there is an insufficient amount of skilled workers with the specialized expertise required for equipment installation in a semiconductor-grade facility” in the US.seen through wall street journal,

Liu said TSMC plans to temporarily send technicians from Taiwan to train local workers at the new Arizona production plant. Nikkei Asia informed of Last month a “task force” of more than 500 experienced workers was on the way to help install the specialized equipment, with analysts quoted as saying the slow progress is due to weak market demand for TSMC’s chip production.

chip maker Q2 Earnings Report saw a 10 percent decrease in revenue (NT$480.8 billion or approximately $15.4 billion USD) and a 23 percent decrease in profit (NT$181.80 billion or $5.8 billion) compared to the same period last year, and its CEO Che Chia Wei Estimated decline of 10 percent. year amid falling demand for consumer electronics. “High inflation and interest rates affect final demand in all market segments, in every region of the world,” Wei said. “While we have seen an increase in AI-related demand recently, it has not been sufficient to balance the overall cyclicality of our business.

The explosive popularity of generative artificial intelligence models such as OpenAI’s ChatGPT last year has resulted in an increase in demand for the advanced chips needed to run them. TSMC acknowledged that this has resulted in a capacity crunch as it is having difficulty fulfilling orders, but Wei is optimistic that this will improve by the end of next year. “We are working with them in the short term to help them meet customer demand,” Wei said. He said the company aims to double its capacity “as soon as possible”.

Liu said TSMC is working with the US government to maximize the subsidies and tax credits available in the CHIPS Act to cover the first five years of the increased premium from manufacturing in the US.

TSMC says that 66 percent of its total net revenue so far for 2023 will come from customers based in North America, which is lower than competing markets such as China (12 percent) and EMEA (Europe, the Middle East and Africa, with a combined 7 percent). It’s no wonder the Biden administration is working so hard to boost domestic semiconductor manufacturing, though the various issues delaying TSMC’s Arizona-based plant are a stark reminder that bringing chip-making capacity in-house is easier said than done.