According to sources, the construction of TSMC's US chip factory will be delayed 3-6 months from the original plan, and the equipment installation process will not begin until around February or March 2023, mainly due to the shortage of local labor in the United States and the number of confirmed cases of the new crown. and the complex procedures for obtaining the different types of building permits required.

According to Nikkei Asia, the equipment installation is seen as a key milestone in the construction of the chip factory, marking how soon the factory will start operating. Once the equipment is installed, it can take up to a year to qualify the line and ramp up output, industry executives said. TSMC is still working to start installing equipment at U.S. factories this year, a person familiar with the matter said.

TSMC told Nikkei Asia that the project is progressing as planned and its production plan remains unchanged.

Construction delays don’t necessarily mean mass production plans will be delayed, as TSMC, which has said publicly that production at the U.S. factory will not begin until the first quarter of 2024, is intentionally giving itself a buffer, people familiar with the matter said. But the delay is still a headache for TSMC, because it hopes to have enough time to test new production lines overseas to ensure that new production capacity goes online smoothly and on schedule.

Construction of TSMC's U.S. factory began last June, and the delay in moving in equipment suggests that overseas expansion is more challenging than domestic expansion for TSMC. In contrast, TSMC's new Taiwan plant can typically enter the equipment installation phase about 15 months after construction, and in some cases as little as 12 months.

Arisa Liu, senior semiconductor analyst at the Taiwan Institute of Economic Research, said, "Because of the epidemic and all other supply chain disruptions, it usually takes longer to build a chip factory. So it is not surprising that TSMC's overseas construction time is extended." "TSMC will You have to negotiate with the government on the details of the subsidy package, learn local regulations, apply for various licenses abroad. The learning process is definitely longer than building a facility here.”

Peter Hanbury, a partner at Bain & Co. who specializes in chips and manufacturing, agrees. "Building a fab in a new geographic location is more difficult because you often have new construction partners who may not be familiar with your construction methods or building cleanroom environments, new regulations ... and new material supply chains ."

To make matters worse, Arizona, where TSMC's U.S. factory is located, is facing stiff competition for labor, including from U.S. semiconductor giant Intel.

Over the past 40 years, Intel has built longstanding relationships with state and local governments and communities. Intel plans to invest $20 billion to expand its campus in Chandler, Arizona, just 50 kilometers from TSMC's chip factory. The company employs about 12,000 people in Arizona and plans to hire 3,000 more to add to the expanded plant.

Arizona's labor pool will remain tight in 2022 as businesses continue to find qualified talent amid record-low unemployment, the Greater Phoenix Chamber Foundation said in early February.