TSMC’s Three Arizona Factories Pose Challenges for the Company. These Are the Chips It’s Going to Make and When They're Set to Arrive

TSMC’s three new factories in Arizona have encountered significant challenges. The initial plan was for one of them to commence large-scale production of high-integration chips in 2024, but this has now been delayed until 2025. This one-year delay in establishing such a high-tech facility poses a serious issue for a company in urgent need of expanding its manufacturing capacity.

This delay is related to difficulties in recruiting the skilled personnel required. In fact, according to Fortune, TSMC’s corporate culture, described as “brutal,” has intimidated many U.S. workers. Moreover, former employees have reported regular 12-hour workdays and weekend shifts.

TSMC is also facing challenges with labor unions, and the local government is struggling to establish the necessary legal framework for the cutting-edge semiconductor plant, according to DigiTimes Asia sources. As such, the situation is becoming increasingly contentious between U.S. and Taiwanese workers, painting a bleak outlook for the company.

These Three Fabs Will Play a Crucial Role in the U.S. Chip Ecosystem

TSMC made the first step in this new venture in May 2020. At that time, the company announced it would invest $12 billion in a new cutting-edge semiconductor plant to be located in Phoenix, Arizona, with chip production set to commence in 2024. However, as mentioned earlier, in the end, production won’t start until 2025. Later, in December 2022, the company revealed plans to establish a second plant in Phoenix, requiring an additional $28 billion. In April 2024, TSMC announced a third plant, bringing the total investment to $65 billion.

However, as expected, TSMC won’t bear these costs in full. In April 2024, the Department of Commerce confirmed that the Taiwanese company will receive up to $6.6 billion through the CHIPS and Science Act to help cover part of the construction and set-up costs of its new factories in Arizona. We also know which chips each plant will produce and when the company will start manufacturing them.

The first fab will be ready during the first half of 2025 and will produce semiconductors at the N4 (4 nm) node. The second plant will be operational in 2028 and will manufacture integrated circuits at the N3 (3 nm) and N2 (2 nm) nodes. Lastly, the third plant won’t be fully operational until the end of this decade and will produce chips at the N2 (2 nm) node or at an even more advanced node.

These facilities are crucial for the U.S. to reduce its dependence on chips from Asia, and it’s reasonable to expect that TSMC will eventually solve the problems hampering the construction of its factories. The government has too much at stake to allow this project to fall through.

Image | nguy0833 (via Flickr)

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