- Wednesday, October 16, 2024
The prospects for one of President Joe Biden's key domestic policy priorities—rebuilding domestic chipmaking capabilities—have hit a roadblock. Taiwan Semiconductor Manufacturing (TSMC), a leading player in the industry, recently announced further delays to its plans of building chip factories in the United States.
Chairman Mark Liu revealed that TSMC's first Arizona factory, intended to produce 4-nanometer chips, had already been pushed back to 2025 due to difficulties in hiring highly skilled workers. Now, Liu stated that the volume production for the company's second factory in Arizona will be delayed even further, possibly up until 2027 or 2028 instead of the initially projected date of 2026. Moreover, there is uncertainty surrounding the type of chips that will be manufactured at this facility. Originally, it was planned to produce more advanced 3-nanometer chips. However, Liu emphasized that the chip selection would depend on government incentives and customer demand. It is worth noting that smaller nanometer chips offer improved speed and power efficiency compared to their larger counterparts.
When approached for comment regarding the delay of TSMC's second Arizona factory, a representative from the U.S. Commerce Department refrained from providing specific details due to confidentiality surrounding potential applicants under the Chips Act.
The setback faced by TSMC raises concerns about the progress of President Biden's chipmaking initiative. The revival of domestic chip manufacturing is crucial for national security, technological advancement, and economic growth. While challenges persist, it is evident that concerted efforts are required to overcome these obstacles and ensure the success of this important endeavor.
TSMC's Delay Throws a Wrench in the Chips Act Plan
TSMC's recent setback is a significant departure from what they had promised just two years ago. In December 2022, TSMC announced a plan to invest $40 billion in Arizona, with the aim of establishing two factories. The first factory was expected to produce 4-nanometer chips by 2024, followed by the second factory producing 3-nanometer chips by 2026. President Biden even delivered a speech at TSMC's groundbreaking ceremony in Arizona, generating much excitement.
Unfortunately, TSMC has failed to meet both of their promised timelines. This is compounded by concerns that the second factory may face a downgrade in chip manufacturing technology. As a result, the Chips Act, a legislation passed by Congress in 2022 to allocate funds and bolster U.S. chip manufacturing, is facing significant challenges. The ultimate goal of the Chips Act is to enhance America's self-sufficiency in chip production.
The success of TSMC's Arizona projects is crucial for achieving this desired independence in domestic chipmaking.
It is important to note that most of the funds allocated under the Chips Act have yet to be distributed. In fact, Intel CEO Pat Gelsinger expressed his apprehension regarding the timing of these disbursements in an interview.
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