TSMC's Arizona Chip Plant Hits Construction Roadblocks Due To COVID-19, Labour Crunch

TSMC, the world's largest contract manufacturer for chips, has postponed the date of move-in at its Arizona plant due to construction delays.

TSMC's Arizona Chip Plant Hits Construction Roadblocks/Getty

New Delhi: TSMC, the world's largest contract manufacturer for chips, has postponed the date of move-in at its Arizona plant due to construction delays. The construction of TSMC's chip plant in the US state of Arizona is running three to six months behind schedule, the media has reported. The reasons are said to be a mix of COVID-19 surges, labour shortage, and difficulties in obtaining construction licenses.

The Taiwanese chip-making major had initially planned to start moving in chip production equipment by around September this year, but the company has told suppliers that this will be pushed back to around February or March of 2023, several people with knowledge of the matter were quoted as saying in a report by Nikkei Asia. The deferral was mainly due to labor shortage and the on-and-off surge of COVID-19 infections in the US, the people said. Complicated processes for obtaining the different types of licenses needed for construction was another factor, the report added.

It is also being said that since this is the first time TSMC is setting foot on unfamiliar ground, with Arizona being the first advanced plant in the US, is also one of the roadblocks that have led to the delay in the construction of the chip maker's facility. TSMC is the world’s largest contract chipset maker with production sites mostly in Taiwan.

Earlier reports suggested that the contract chipset manufacturer is underway to build up new capacity around the world including a $7 billion semiconductor factory in Japan, as well as a $12 billion facility in Arizona set to start mass production in early 2024. The company has also reportedly begun pilot production of 3-nanometer chips in Southern Taiwan, and expects to be producing them in volume at the end of this year.