TSMC delays Arizona plant, blames US labor shortage

Apple's processor manufacturer TSMC says that it can't find enough skilled workers to open its Arizona facility on time, and mass chip production will have to wait until 2025.

The Taiwan Semiconductor Manufacturing Company (TSMC) began work on a first factory in Arizona in 2021. Since then, the plant has seen safety concerns, complaints from TSMC about US taxation. and a claim that US staff don't work hard enough.

Most recently, the company announced that it was sending more Taiwanese workers to the US to manage the final stages of making the plant operational. Now according to Nikkei Asia, that move has proven insufficient.

"We are encountering certain challenges, as there is an insufficient amount of skilled workers with the specialized expertise required for equipment installation in a semiconductor-grade facility," said TSMC chair Mark Liu. "Consequently we expect the production schedule of N4 [4-nanometer] process technology to be pushed out to 2025," continued Liu.

The news comes alongside TSMC's latest earnings report, which shows that the firm's profits have fallen, though they are expected to recover when the iPhone 15 range launches. TSMC blames the results on a slow economic recover in China, and a downturn in the consumer electronics market.

"It's all about macroeconomics," C.C. Wei, TSMC CEO told Nikkei Asia. "In fact, higher inflation and interest rate [rises] impact demand in all market segments in every region in the world."

China's economic recovery is also slower than we expected," continued Wei. "While we have recently observed an increase in AI-related demand, it is not enough to offset the overall cyclicality of our business."

While TSMC has revised its estimate for when the Arizona plant will mass-produce 4-nanometer processors, the company is already making 3-nanometer ones that are expected to be in the iPhone 15 Pro and M3 Macs.

23 Comments

quakerotis 100 comments · 8 Years

About 1 year ago

They are FOS. I feel no pain for them. They chose Arizona, which in 5 years will be burned to a crisp and uninhabitable.

And their water demands will only further its demise.

blastdoor 3564 comments · 15 Years

About 1 year ago

quakerotis said:

They are FOS. I feel no pain for them. They chose Arizona, which in 5 years will be burned to a crisp and uninhabitable.

And their water demands will only further its demise.

My understanding is that Arizona is actually very appealing due to geological stability and lack of hurricanes/tornadoes.

It is also my understanding that while a fab uses a lot of water, it's mostly recycled water. The analogy I've heard is that it's like a swimming pool -- it holds a lot of water, but then it just mostly recycles it.

And in terms of water use furthering the demise of Arizona -- I've read the biggest culprit is ALFALFA farmers. Yes, alfalfa. Somehow, people are growing one of the most water intensive crops there is in the middle of a desert.

Far better to turn those alfalfa fields into solar farms that power a Fab that's filled with water once, and then use the vast quantity of water saved from alfalfa farming to, you know, drink.

danox 3393 comments · 11 Years

About 1 year ago

blastdoor said:

quakerotis said:

They are FOS. I feel no pain for them. They chose Arizona, which in 5 years will be burned to a crisp and uninhabitable.

And their water demands will only further its demise.

My understanding is that Arizona is actually very appealing due to geological stability and lack of hurricanes/tornadoes.

It is also my understanding that while a fab uses a lot of water, it's mostly recycled water. The analogy I've heard is that it's like a swimming pool -- it holds a lot of water, but then it just mostly recycles it.

And in terms of water use furthering the demise of Arizona -- I've read the biggest culprit is ALFALFA farmers. Yes, alfalfa. Somehow, people are growing one of the most water intensive crops there is in the middle of a desert.

Far better to turn those alfalfa fields into solar farms that power a Fab that's filled with water once, and then use the vast quantity of water saved from alfalfa farming to, you know, drink.

TSMC could have built the facility somewhere near/close to the Columbia river basin in eastern Washington or Oregon, and certainly not in water less Arizona. Another good location would’ve been somewhere in British Columbia just north of the US Canadian border within 50 miles of the border and within 50 miles of the Pacific Ocean.

Anywhere in the Pacific northwest near the Pacific ocean close to vast amounts of hydroelectric power (45% of the USA’s total Hydro electric output) and plenty of water. With the added bonus of having a better post secondary educational system and Microsoft and Boeing nearby.

Being in Arizona, long-term is not good because of the lack of water means you’re gonna have to duplicate your efforts in building another facility within 5 to 10 years in an area with water.

TSMC, did a bad job in scouting. Whatever they were going to build should’ve been within 50 miles of the pacific ocean between Vancouver and San Diego, the best schools, the largest population of Asians in the United States, and the best companies in Tech are all along the Pacific Coast from San Diego to Vancouver, Qualcomm in the south, and Microsoft and Boeing in the north, with Silicon Valley in the middle.

waveparticle 1497 comments · 3 Years

About 1 year ago

Since July 1, Phoenix temperature has reached over 115 F every day. The forecast is this will continue nonstop. The early morning temperature is 90 F. How many skilled American workers will like to work in such environment?

BiCC 59 comments · 1 Year

About 1 year ago

danox said:

blastdoor said:

quakerotis said:

They are FOS. I feel no pain for them. They chose Arizona, which in 5 years will be burned to a crisp and uninhabitable.

And their water demands will only further its demise.

My understanding is that Arizona is actually very appealing due to geological stability and lack of hurricanes/tornadoes.

It is also my understanding that while a fab uses a lot of water, it's mostly recycled water. The analogy I've heard is that it's like a swimming pool -- it holds a lot of water, but then it just mostly recycles it.

And in terms of water use furthering the demise of Arizona -- I've read the biggest culprit is ALFALFA farmers. Yes, alfalfa. Somehow, people are growing one of the most water intensive crops there is in the middle of a desert.

Far better to turn those alfalfa fields into solar farms that power a Fab that's filled with water once, and then use the vast quantity of water saved from alfalfa farming to, you know, drink.

TSMC could have built the facility somewhere near/close to the Columbia river basin in eastern Washington or Oregon, and certainly not in water less Arizona. Another good location would’ve been somewhere in British Columbia just north of the US Canadian border within 50 miles of the border and within 50 miles of the Pacific Ocean.

Anywhere in the Pacific northwest near the Pacific ocean close to vast amounts of hydroelectric power (45% of the USA’s total Hydro electric output) and plenty of water. With the added bonus of having a better post secondary educational system and Microsoft and Boeing nearby.

Being in Arizona, long-term is not good because of the lack of water means you’re gonna have to duplicate your efforts in building another facility within 5 to 10 years in an area with water.

TSMC, did a bad job in scouting. Whatever they were going to build should’ve been within 50 miles of the pacific ocean between Vancouver and San Diego, the best schools, the largest population of Asians in the United States, and the best companies in Tech are all along the Pacific Coast from San Diego to Vancouver, Qualcomm in the south, and Microsoft and Boeing in the north, with Silicon Valley in the middle.

Apple can build anywhere they want. TSMC will get licensed. I'll keep this short, Apple contracts TSMC to make for Apple. Do the Logic.