Taiwan Semiconductor Manufacturing Company (TSMC) has confirmed a setback with its second plant in Arizona delayed by up to two years, while the company is still waiting on certainty over US government grants.
It is another blow for the $40 billion site after news broke in July that the first factory will not be up and running until 2025, as reported by Bloomberg.
TSMC, the world’s largest semiconductor chip foundry, is aiming to start second phase operations in 2027 or 2028, which is also a disappointment to the Biden administration in the White House in its aspirations to boost the manufacturing of key components on US soil.
The first site will only commence the production of 4-nanometer chips next year with labor and cost factors cited by the company in the announcement last year.
“Our overseas decisions are based on customer needs and the necessary level of government subsidy, or support,” stated chairman Mark Liu.
At TSMC’s earnings conference in Taipei on Thursday, its chief financial officer Wendell Huang added the decision on the second factory comes as a consequence of delays to the first plant.
Delays to US government funding
Taiwan’s flagship company is locked in talks with the US government on incentives and tax credits, whilst still facing challenges in hiring its workforce. Decisions on grants are set to influence the scale of advances at the second location which is also up against the clock.
TSMC has intimated a delay of two years could result in a one-generation evolution of semiconductor tech.
Incumbent US President Joe Biden passed the Chips and Science Act into law more than one year ago but the legislation aimed to inject billions of dollars toward the likes of TSMC and Intel for further US expansion has yet to yield any subsidies.
The situation is likely to be a source of frustration for the iconic chipmaker given that TSMC has already received funds from the Japanese government for a lesser project in Kumamoto, which was unveiled after the Arizona plan.
Production at the site in Japan is anticipated to get underway later this year.
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