Labor shortages delay Arizona chip plant opening until 2025

Dive Brief:

  • TSMC, a Taiwan-based semiconductor manufacturing company, pushed back the opening of its Arizona chip factory until 2025 due to U.S. construction labor issues, said Mark Liu, TSMC chairman, during the company’s second quarter earnings call. 
  • “We are now entering a critical phase of handling and installing the most advanced and dedicated equipment,” said Liu. “However, we are encountering certain challenges as there is an insufficient amount of skilled workers with those specialized expertise required for equipment installation in a semiconductor-grade facility.”
  • Prior to the earnings call, TSMC announced plans to send several hundred additional workers from Taiwan to the Arizona site to strengthen its construction labor force for the project, according to Reuters.

Dive Insight:

Liu confirmed on the call the company will still send these technicians from Taiwan for a short period of time in order to train the local skilled workers. 

Nevertheless the TSMC chairman said the company now expects completion to be pushed out to 2025 due to overall labor scarcity.

Labor shortages, combined with COVID-19 surges and licensing problems, had already caused a three to six month delay on the project in February 2022, according to Nikkei Asia. Meanwhile, Liu also admitted last summer during the company’s annual meeting the advanced chip plant in Arizona will likely be “more costly” than originally anticipated.

The U.S. construction industry had 366,000 job openings in May, an increase of 5.5% from April, tilting the power balance in favor of workers. Associated Builders and Contractors chief economist Anirban Basu said that that data confirms “labor shortages remain firmly in place.”

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