Taiwan Semiconductor Manufacturing Company pushed back the timeline for its second planned Arizona chip factory.
The chipmaker’s CEO C.C. Wei said during an earnings call Thursday it would open its second Arizona fabrication plant in 2027 or 2028, at least a year later than initially announced. TSMC unveiled plans last January for production at the plant to begin in 2026.
The factory is part of a $40 billion investment TSMC is making in two plants in Arizona. The company first announced plans to set up shop with one factory in the state in 2020, before announcing plans for a second fab in 2022.
The company initially said the second fab would produce 3-nanometer chips, which are expected to be more advanced than the 5-nm chips produced at the first fab planned for Arizona. However, in the call on Thursday, the Executive Chairman Mark Liu noted that the type of chips produced at the second fab would be determined in part by the types of federal incentives available, as well as market demand.
"I think that also has to do with how much incentives that fab, the U.S. government can provide,” Liu said. “To be honest, most of the fab in overseas, what actually be loaded, what technology is being set up, really, it's a decision of customers' demand in that area at that timing.”
Plans for both semiconductor plants in Arizona have now been delayed. In July, TSMC delayed the opening of the first plant from a scheduled timeline of late 2024 to 2025, citing a lack of specialized labor. The project has also dealt with delays due to COVID-19 surges and licensing issues.
“We are well on track for volume production of N4, or 4-nanometer process technology in the first half of '25 and are confident that once we begin operations, we will be able to deliver the same level of manufacturing quality and reliability in Arizona as from our fabs in Taiwan,” Liu said.
To combat the labor constraints, TSMC planned to start importing workers from Taiwan, which prompted an outcry from the local construction union in Arizona. The union suggested the move was a ploy by TSMC to save money by hiring foreign workers.
The two parties finally reached a deal last month. The union and TSMC will work together to hire workers for the project, focus on hiring locally in the U.S. and meet quarterly to ensure transparency.
As the chipmaker pushes ahead with its U.S. expansion, TSMC is also focused on growing its production capacity elsewhere around the world.
Liu noted during the call that company plans to officially open a semiconductor factory in Japan next month, where it will produce 12 nm, 16 nm, 22 nm and 28 nm chips. The company is also in discussion to build a second fab in the country.
