Joe Biden has made the development of US semiconductor manufacturing a central focus of his presidency. Photo: Spencer Platt/Getty Images. a key plant in Arizona has been delayed until at least 2025.
Taiwan Semiconductor Manufacturing Company (TSMC), which has been building the plant since 2021, said the start of production will be pushed back from 2024 to 2025.
TSMC Chairman Dr. Mark Liu blamed the delay on a shortage of skilled workers in the US, saying “there aren't enough skilled workers with the specialized knowledge needed to install equipment at the semiconductor manufacturing plant.”
The one-year delay means the new microchip manufacturing plant won't open until after next year's US presidential election, which could undermine part of the incumbent Democrat's economic performance.
Mr. Biden has made refocusing chip manufacturing a key part of his $280bn (£217bn) Chip Act, a strategy to advance the US semiconductor industry.
The President has invested in supporting domestic manufacturing amid growing nervousness over US dependence on Taiwan for critical parts.
TSMC is the world's largest dedicated semiconductor manufacturing plant and a key supplier to major US companies, including Apple.
1904 TSMC dominates the chip market.
Mr. Biden is seeking to diversify chip sources amid growing fears that China will invade Taiwan, disrupting exports.
Speaking Thursday, Dr. Liu said TSMC will send “experienced technicians from Taiwan to train local skilled workers in a short period of time.”
The delay is due to global turmoil in the semiconductor industry, whose products play a vital role in everything from computers and mobile phones to home appliances and automobiles.
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Production delays caused by the pandemic have forced shutdowns in many industries amid a desperate scramble for any available chips.
Two years ago, automakers, including Volvo and Ford, were forced to suspend production as they awaited the delivery of critical microchips to control their vehicle systems.
In September 2021, analysts at IDC predicted that chipmakers' overreaction to addressing supply shortages would lead to overcapacity by this year.
TSMC's sales fell 6.2% in the three months to the end of June, while profits fell by a quarter.
The bosses are to blame for this “general global economic conditions”, and rival chipmaker Intel reported a 36% drop in sales in April as executives this company is struggling to create new foundries.
1904 Chip production in the west is declining
In addition to the new TSMC plant, Intel, the US semiconductor giant, is building two new $20 billion plants in Arizona. An additional 19 new chip factories are expected to open in the US over the next ten years.
Rishi Sunak's government has pledged £1 billion to the UK chip industry over the next decade. No new factories are expected to open in the UK, however, as ministers have focused government support on R&D companies rather than manufacturing.
British chip companies have been tempted by the US multibillion-dollar subsidies offered by the Biden administration.
Paragraf, a Cambridge-based semiconductor maker, has applied for some of these subsidies after calling Prime Minister Sunak's semiconductor strategy “sluggish”.
Similarly, neighboring company Pragmatic Semiconductor launched operations in the US in February, as its founder Scott White said: “From a purely logical point of view, we have no reason to be a British company.”
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