TSMC delays Arizona production, blow to Biden

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Taiwan Semiconductor (TSMC) delays Arizona production, setback for President Biden’s tech ambitions.

The firm announces that chip manufacturing will not begin next year as planned due to a shortage of skilled workers.

Amid an escalating trade dispute between Washington and Beijing, the White House has outlined plans to increase chip production in the US.

On Friday, shares of TSMC in Taiwan experienced a decline of around 3%. This drop came after TSMC Chairman, Mark Liu, revealed on Thursday that the production of advanced microprocessors at their Arizona factory in the southwestern United States would be postponed until the year 2025.

During an earnings presentation, Mr. Liu stated that the plant, under construction since April 2021, encountered a shortage of workers with the specialized expertise necessary for equipment installation in a semiconductor-grade facility.

He further mentioned that the company is taking measures to address the situation, which includes sending experienced technicians from Taiwan to provide training for the local skilled workers in the US for a short period of time.

TSMC also projected a 10% decline in sales this year due to reduced demand for semiconductors. The company reported a profit decrease of approximately 23% to 181.8 billion Taiwanese dollars ($5.8 billion; £4.5 billion) for the three months ending in June, compared to the same period last year.

During Donald Trump’s presidency in 2020, TSMC initially disclosed plans to construct a facility in Arizona. In December of the following year, the company revealed a substantial increase in its investment for the project, raising it to $40 billion (£31.1 billion), making it one of the largest foreign investments in American history.

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In that timeframe, Mr. Liu had specified that TSMC’s initial semiconductor production facility at the Arizona plant would be operational by 2024, while the second facility would be brought online by 2026.

Amid a protracted technology dispute, the US has implemented a series of measures against China’s chipmaking industry and invested billions of dollars to bolster America’s semiconductor industry.

Currently, the US contributes approximately 10% of the global supply of computer chips, crucial components used in various products, from cars to mobile phones. In 1990, the country’s share accounted for nearly 40% of global production.

In the previous year, President Biden signed legislation allocating $280 billion to high-tech manufacturing and scientific research in the US. The investment incorporated tax breaks for companies establishing computer chip manufacturing plants within the country.

Source : bbc.com