According to Reuters, TSMC’s US factory is unlikely to be equipped with the latest chip technology until Taiwan
By Wen-Yee Lee
TAIPEI (Reuters) – TSMC’s new U.S. factory is unlikely to get the most advanced chip technology ahead of factories in Taiwan due to complex compliance issues, local building regulations and various permitting requirements, the Taiwanese company’s CEO said.
CC Wei, CEO and chairman of Taiwan Semiconductor Manufacturing Co, said the new factory in Arizona took at least twice as long to build as in Taiwan.
“Every step requires approval, and after the approval is approved, it takes at least twice as long as in Taiwan,” Wei said at a National Taiwan University event late Thursday. He added that it would therefore be difficult for TSMC to deploy its latest technology in the US before Taiwan.
TSMC, the leading maker of advanced chips used by companies like Apple (NASDAQ:) and Nvidia (NASDAQ:), is spending $65 billion on three massive factories in the US state of Arizona.
TSMC has said the majority of its chip production will remain in Taiwan, particularly for its most advanced chips.
Wei said on an earnings call Thursday that despite various challenges and cost overruns, he is confident the Arizona factory will produce the same quality of chips as those in Taiwan, and he expects a smooth ramp-up process.
At the university event, Wei said a shortage of skilled workers and gaps in the supply chain, as well as a lack of regulations for building chip factories, had further extended the timeline for its Arizona project.
“We ended up making 18,000 rules, which cost us $35 million,” Wei said, noting that TSMC funded the hiring of a team of experts to work with the local government on regulatory issues.
He added that chemical supply costs in the U.S. are five times higher than in Taiwan, prompting TSMC to ship sulfuric acid from Taiwan to Los Angeles and then truck it to Arizona.
Labor shortages also posed a challenge as TSMC moved half of its construction workers from Texas to Arizona, increasing costs due to relocation and housing, he said.
The U.S. government has provided extensive support for the investment, including a $6.6 billion grant to spread the geographic risk of excessive concentration of chip manufacturing in Asia, particularly Taiwan.
U.S. Commerce Secretary Gina Raimondo said last week that TSMC had begun producing advanced 4-nanometer chips for U.S. customers in Arizona, a milestone in the Biden administration’s semiconductor efforts.
