TSMC Arizona chip plant construction delayed by labor shortages, Covid-19 surges

TSMC has pushed back the move-in date for its Arizona plant from September 2022 to March 2023 because of multiple factors impacting construction and increased competition with Intel for labor.

Construction for the Taiwan Semiconductor chip fabrication plant in the United States began in June 2021. The company had initially projected to move in September 2022, but the timeline has been pushed back by about six months.

According to Nikkei Asia, this delay was onset by several problems impacting construction like COVID-19 surges and labor shortages. Intel's expansion of the Chandler, Arizona facility is also impacting TSMC's plant construction due to resources being prioritized for the US-based company.

"It's generally taking longer to build a chip plant because of the pandemic and all the other supply chain disruptions," said Arisa Liu, a veteran semiconductor analyst with the Taiwan Institute of Economic Research. "TSMC will have to negotiate details for subsidy packages with governments and also learn local regulations and apply for all kinds of licenses in a foreign destination."

The labor pool in Arizona is also creating a challenge for TSMC. Intel already employs 12,000 people and seeks 3,000 more for its expanded facilities. TSMC will have to compete in an already low-unemployment region when seeking talent for its new plant.

This is the first advanced chip manufacturing facility TSMC is developing outside of its home market. Generally, these plants take about 12 to 15 months from groundbreaking to equipment move in when they are built in Taiwan. However, the challenges presented in building in a foreign country make this timeline much longer.

Despite the delays in construction, TSMC expects it will still reach its production start in early 2024. The timeline for installing and testing equipment will be shorter, but the production should begin on time.

5 Comments

viclauyyc 847 comments · 10 Years

About 2 years ago

Suddenly everyone is building fab like no tomorrow. I wonder how they can find so many new customers after Covid as it is dying down. Remember, the whole semiconductor industry was running pretty well balanced before 2019.

Xed 2896 comments · 4 Years

viclauyyc said:

Suddenly everyone is building fab like no tomorrow. I wonder how they can find so many new customers after Covid as it is dying down. Remember, the whole semiconductor industry was running pretty well balanced before 2019.

Is Covid dying down? This article talks of delays due to labor shortages from Covid and I've certainly seen more and more businesses either temporarily shut down or get limited hours because of labor shortages from Covid. Then there are microchip shortages causing delays, plus other production and transport issues that are surging. If this is "dying down" then ramping up would end up like a Roland Emmerich movie.

loopless 343 comments · 16 Years

I had a chance to drive by the building site of this fab plant - the scale is quite unbelievable. There is a massive area under construction and huge buildings going up.

tmay 6456 comments · 11 Years

viclauyyc said:

Suddenly everyone is building fab like no tomorrow. I wonder how they can find so many new customers after Covid as it is dying down. Remember, the whole semiconductor industry was running pretty well balanced before 2019.

Actually, the semiconductor industry flushed out buyers of decades old components, ie, the automotive companies, that are or will have to reengineer their product lines. I would state emphatically, that after all of the mostly unnecessary death is over, COVID 19 will be seen as a very beneficial disruption, for the most part. The business model will be more in the way of pay to play, similar to Apple payments in advance to TSMC.

Notable exceptions to COVID long term benefits;

Long COVID sufferers
Movie theaters

payeco 581 comments · 17 Years

tmay said:

viclauyyc said:

Suddenly everyone is building fab like no tomorrow. I wonder how they can find so many new customers after Covid as it is dying down. Remember, the whole semiconductor industry was running pretty well balanced before 2019.

Actually, the semiconductor industry flushed out buyers of decades old components, ie, the automotive companies, that are or will have to reengineer their product lines. I would state emphatically, that after all of the mostly unnecessary death is over, COVID 19 will be seen as a very beneficial disruption, for the most part. The business model will be more in the way of pay to play, similar to Apple payments in advance to TSMC.

Notable exceptions to COVID long term benefits;

Long COVID sufferers
Movie theaters

I have to agree that there is that silver lining to all the rest of the misery. Even with high inflation right now, people in many industries are seeing wage increases that well outpace inflation. Hell, even fast food workers are getting sign on bonuses and $15/hour pay, even in low cost of living areas.