Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract manufacturer of advanced chips, has indicated that its new US plant in Arizona is facing challenges in implementing the most cutting-edge chip technology. CEO C.C. Wei revealed that the company’s $65 billion investment in three Arizona factories is encountering hurdles that may delay the deployment of its latest chip manufacturing processes.
There could be several factors contributing to this delay like regulatory complexities, the construction process in Arizona is taking at least twice as long as in Taiwan due to extensive permitting requirements and compliance issues. Chemical supply costs in the US are five times higher than in Taiwan, forcing TSMC to ship sulfuric acid from Taiwan to Los Angeles and then truck it to Arizona.
Also, TSMC has had to relocate half of its construction workforce from Texas to Arizona, increasing costs.
The company expects its first Arizona fab to begin production using 4nm technology in the first half of 2025, with subsequent fabs producing better chips in the coming years.
The US government is providing $6.6 billion grant under the CHIPS Act, as part of its efforts to strengthen domestic semiconductor manufacturing capabilities.
Wei believes the Arizona factory will eventually match Taiwan’s chip quality, but it will take some time.
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