Taiwan Semiconductor Manufacturing Co. Announces Second Delay in Arizona, Cites Questions over Biden Administration ‘Incentives’

The Taiwan Semiconductor Manufacturing Co. (TSMC) announced another delay in Arizona on Thursday, this time revealing its second factory in the state will take another year to be completed, and may not create less advanced semiconductors than its first. The company’s chairman, Mark Liu, said in an earnings call that the schedule will depend on “incentives” secured from the Biden administration.

Asked about the initial Arizona delay and what effect it would have on TSMC’s second facility in the state, Liu confirmed “a gap,” with the company currently planning for it to begin production 2027 or 2028.

After confirming the “fab shell is under construction,” Liu stated the “technology in that shell is still under discussion” and will depend on “how much incentives that fab, the U.S. Government can provide.” TSMC is the world’s largest manufacturer of semiconductors, which are used in most modern electronics.

Despite Liu suggesting TSMC does not have firm commitments from the federal government about incentives to build its second facility, the chairman began his call by describing the company’s relationship with the United States and purportedly improving relationship with Arizona workers.

“In Arizona, we are in close and constant communication with U.S. government on incentive and tax credit support and making strong progress in facility supply chain infrastructure, utility supply, and equipment installation for our first fab,” Liu told those on the call.

Likely alluding to the fraught relationship between TSMC and Arizona laborers, who the company previously claimed lacked the skills necessary to build its first Arizona factory and were partially replaced by workers from Taiwan, Liu said the company continues “to work closely and develop strong relationships with our local union and trade partners in Arizona, including recently signed an agreement with Arizona Building and Construction Trades Council (AZBTC) our new framework for cooperation.”

The agreement Liu referenced saw the company end a months-long labor dispute that emerged when the company imported construction workers from Taiwan, which prompted the AZBTC to issue a public call for President Joe Biden and Democrats to force TSMC to hire local companies. The agreement ultimately allowed TSMC to bring in experts with “specialized experience.”

In a campaign advertisement that ran in Arizona last year, Biden gave himself credit for a “manufacturing boom” in Arizona, including in the semiconductor sector.

Months later, it was revealed the semiconductors made in Arizona will be sent back to Taiwan, incomplete, for a complex “packaging” process before they can be sold.

C.C. Wei, TSMC’s CEO, also later added that the semiconductors manufactured in Arizona will largely be sold to customers in the United States.

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Tom Pappert is the lead reporter for The Tennessee Star, and also reports for The Georgia Star News, The Virginia Star, and The Arizona Sun Times. Follow Tom on X/Twitter. Email tips to [email protected].
Photo “Workers” by Taiwan Semiconductor Manufacturing Co., Ltd.

 

 

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