TSMC's second Arizona plant may not open until 2028

AppleInsider

Apple's iPhone processor manufacturer TSMC has announced that it expects its second Arizona plant will be delayed by up to two years -- and may no longer produced the promised 3-nanometer chips.

TSMC investing $40 billion in Arizona fabs

TSMC's second plant in the state was announced in 2022 with the company increasing its investment from $12 billion $40 billion for the new factory's development. This plant was specifically said to be for making 3nm processors, though it was later revealed that the all Arizona-made chips would still go to Taiwan for final assembly.

According to the Wall Street Journal, TSMC chair Mark Liu has announced that construction continues, but it will not be mass producing processors by 2026 as planned. At present, TSMC expects it to be fully operational by 2027 or 2028, though it gave no specific reasons for the delay.

While TSMC produces processors for many companies, it has a long-term relationship with Apple. Tim Cook has confirmed that Apple will use TSMC chips made in Arizona.

Liu also said that the new factory may not be dedicated to 3nm production. He said that the specific chip type had yet to be determined, and that the choice would be affected both by customer demand and government incentives.

The reference to initiatives is not the only factor in TSMC's relationship with the US government. As TSMC is a Taiwanese company and the US does not have an income tax agreement with that country, the chip manufacturer faces double taxation.

Unless this changes, it's been reported that TSMC would therefore be paying out over half of its US profits in tax.

Liu also said that TSMC is in "consistent communication with the U.S. government on incentive and tax credit support" regarding its Arizona operations.

Separately, TSMC's Arizona plant construction has been heavily criticised for being unsafe, and TSMC workers have said American staff "are the most difficult to manage."




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InspiredCode

Grain of salt. All the reporting on this has been a bit unreliable.

badmonk

I suspect it is related to the US presidential election, specifically Trumps threats regarding tariffs (since the chips will be sent back to Taiwan and then reimported) and taxation.

blastdoor

though it was later revealed that the all Arizona-made chips would still go to Taiwan for final assembly.

I thought it was then later, later reported that Apple had found a company to package chips in the us, so no need to send back to Taiwan for “assembly”:

https://arstechnica.com/tech-policy/2023/11/new-chip-packaging-facility-could-save-tsmcs-arizona-fab-from-paperweight-status/

jellybelly

The packaging (SIP) for Apple, will be done by an adjacent AMKOR plant that is to the west of TSMC plant.

Excerpt from AZFamily.com:  https://www.azfamily.com/2023/11/30/new-2-billion-plant-package-apple-microchips-manufactured-arizona/

Published: Nov. 30, 2023

“… Amkor, which packages semiconductors and other related microchips, has long been used by the tech brand. Now, it has acquired 55 acres of land to build a 500,000-square-foot facility in Peoria near TSMC,  where Apple silicon is being manufactured. The first phase of the plant is expected to be ready in the next two to three years. Amkor has long worked with Apple on advanced packing and was heavily involved in the design of the Arizona facility.

“Advanced packaging is a cutting-edge design and manufacturing method that places multiple chips with a variety of functions in a densely interconnected two- or three-dimensional “package,” explained the National Institute of Standards and Technology. …”

danox

Building important infrastructure takes time measured in years, decades.

BlueLightning

Much of the delay in new microprocessor plant construction is due to lack of US-based folks experienced in recent chip plant construction and operation.  Many of the US-based folks have retired or died.  A large number of non-TSMC plants are under construction or planning (including two Ohio-based Intel plants, an IBM plant, and others for companies like Texas Instruments).  Mainland China was offering folks with experience up to 10x current salary to relocate to China and help with specific parts of the chip manufacturing supply chain.  Other plants are under construction in Europe, Israel and elsewhere.  

Both Trump and Biden failed to understand that we lack many of the folks needed to re-shore many industries, and it takes time to train new workforces.  These folks are not doing rocket science, but the manufacture of chips is more demanding than building and operating a skyscraper.  US labor costs are considerably higher (leading to higher chip costs and inflation).  Similar education and training shortages exist for near-shoring or transfer of manufacturing from China to Vietnam and India.  Compared to China, electrical, water and telecommunications infrastructure is less well developed in much of Vietnam and India.  Quality will be lower until plants have been operating for months or years.  

Parts of Africa have the lowest labor costs, but often lack sufficient electrical and telecommunication infrastructure.  Language is often a barrier.  Some African countries that were long-time British, French or German Colonies may have lower language barriers.  Trained labor is often scarce, especially outside of major cities.