TSMC delays start of Phoenix chip factory production, citing skilled worker shortage

PHOENIX — The Taiwan Semiconductor Manufacturing Company is delaying the start of production at its massive plant under construction in Phoenix, spotlighting Arizona’s shortage of skilled workers.

“While we are working to improve the situation, including sending experienced technicians from Taiwan to train the local skilled workers for a short period of time, we expect the production schedule of N4 [4 nanometer] process technology to be pushed out to 2025,” Mark Liu, TSMC chairman, said during a second-quarter earnings call last week.

Work on the first of two TSMC chip fabricating facilities near Interstate 17 and Loop 303 started more than two years ago. The company had been aiming to start production next year.

“Our fab in Arizona started construction in April 2021, with an aggressive schedule. We are now entering a critical phase of handling and installing the most advanced and dedicated equipment,” Liu said.

“However, we are encountering certain challenges, as there is an insufficient amount of skilled workers with the specialized expertise required for equipment installation in a semiconductor grade facility.”

How much is TSMC investing in Phoenix facilities?

TSMC is investing $40 billion in its Phoenix operations. The first fab, which was announced in 2020, has a $12 billion price tag and will make 4 nanometer chips. After President Joe Biden signed the $280 billion CHIPS Act in 2022 to bolster the domestic microchip industry, TSMC said it would invest another $28 billion in Phoenix on a factory for 3 nanometer chips.

The Phoenix facilities were expected to create 10,000 jobs — including 4,500 directly with TSMC — plus another 10,000 construction jobs.

Expert says workforce is key to Arizona economy

Valley economist Jim Rounds of Rounds Consulting Group said Arizona has been making progress in bolstering its workforce in recent years, but it remains a significant concern.

“The next six months is going to tell us a lot about … where they [policymakers] want to go in terms of the direction on this and the types of work and research that we’re going to be seeing them asking for, and I’m optimistic,” Rounds told KTAR News 92.3 FM on Friday.

“I feel like we could get there, but this is a bigger risk to the economy than a lot of people realize but it’s also one of our biggest opportunities.”

Rounds said workforce development is a worthwhile investment.

“We’re going to have to step it up in terms of our workforce projects if we’re going to keep up with demand, and so this is one of those items where we’re going to have to spend money to make even more money,” he said.

“These are going to be high-return-on-investment projects, but in the short term we may have some problems related to workforce supply and we’re going to have to advance those efforts quite a bit.”

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