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TSMC's second Arizona plant may not open until 2028

TSMC investing $40 billion in Arizona fabs

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'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."