Skip to content
Tiatra, LLCTiatra, LLC
Tiatra, LLC
Information Technology Solutions for Washington, DC Government Agencies
  • Home
  • About Us
  • Services
    • IT Engineering and Support
    • Software Development
    • Information Assurance and Testing
    • Project and Program Management
  • Clients & Partners
  • Careers
  • News
  • Contact
 
  • Home
  • About Us
  • Services
    • IT Engineering and Support
    • Software Development
    • Information Assurance and Testing
    • Project and Program Management
  • Clients & Partners
  • Careers
  • News
  • Contact

Delays in TSMC’s Arizona plant spark supply chain worries

Taiwan Semiconductor Manufacturing Company (TSMC) has said it is unlikely to equip its new US plant in Arizona with its most advanced chip technology ahead of its Taiwan factories, raising concerns about supply-chain hurdles for tech companies.

Speaking at a university event in Taiwan, TSMC CEO and Chairman C.C. Wei attributed the delays at TSMC’s Arizona factory to a combination of complex compliance requirements, local construction regulations, and extensive permitting processes, according to a Reuters report. 

Wei explained that each stage of construction requires permits, with approval timelines taking at least twice as long as in Taiwan, creating challenges in deploying the company’s most advanced chip technology.

Additional obstacles, Wei said, include supply chain disruptions and a lack of established regulations for chip plant construction in the US, which have further hindered progress.

Wei also noted that chemical supply costs in the US are substantially higher, citing the need to ship sulfuric acid from Taiwan to Los Angeles and then transport it to Arizona by truck.

Despite these setbacks and increased costs, Wei expressed optimism during the company’s recent earnings call, assuring that the Arizona plant would meet the same quality standards as its facilities in Taiwan and forecasting a smooth production ramp-up.

The US government has extended robust support to TSMC’s investment, offering a $6.6 billion grant through CHIPS and Science Act to lessen dependence on Asia for semiconductor manufacturing and address geographic vulnerabilities in the global chip supply chain.

TSMC’s challenges in the US

Analysts point out that the US regulatory environment is more complex than Taiwan’s, leading to longer timelines and higher costs for TSMC’s Arizona project.

“Unlike Taiwan’s streamlined regulations, the US has a sequential, multi-layered approval process, including stringent construction, environmental, and safety codes that necessitate adjustments,” said Manish Rawat, semiconductor analyst at TechInsights. “Supply chain constraints, such as higher material costs and logistical challenges, further increase expenses.”

Taiwan holds over $100 billion in assets and decades of experience in semiconductor manufacturing, while the US is still catching up in terms of resources and governance needed to recreate the infrastructure required to support production, said Hyoun Park, CEO and chief analyst at Amalgam Insights.

The shortage of a skilled semiconductor manufacturing workforce in the US necessitates importing talent, driving up costs for training and relocation.

TSMC said last year that its first Arizona fab was on schedule to begin producing chips using 4nm technology in the first half of 2025. Reports now indicate production has already started.

Two additional plants are planned for the coming years, but the ongoing challenges could lead to further delays in their completion.

“Although the first Arizona TSMC factory has been brought into production, the other two fab plants are not scheduled to start working until 2028 and 2030, respectively,” Park said. “Delays in accessing modern technology may postpone those launch dates.”

Impact on supply chain

Delays in implementing TSMC’s latest chip technology at its US facility could impact the supply chain for major American tech firms such as Apple and Nvidia, though analysts believe the effects may become more apparent next year.

“TSMC has already made a commitment to support both N2 and A16 production in Arizona for next-gen chips,” said Park. “TSMC capacity is pretty much committed through 2025 already, so new technology delays are more relevant for the upcoming 2 nm and 1.6 nm chips expected to be more prevalent next year.”

Delays at TSMC’s Arizona plant could compel its customers to rely on Taiwan-based facilities, leaving them vulnerable to geopolitical risks tied to Taiwan’s dominance in semiconductor production.

“This situation could also delay the rollout of next-generation products in the US market, affecting timelines for AI, gaming, and high-performance computing innovations,” Rawat said. “Moreover, without access to local, advanced chips, US tech companies will incur higher transportation and import costs, diminishing their profit margins. In competitive sectors like AI and autonomous vehicles, slower time-to-market could weaken global competitiveness.”

For TSMC, the delays and challenges could have significant implications for fab operations, particularly in maintaining profitability and efficiency.

“Cost of maintaining the fab, the fab utilization rate, and the yield rate are key metrics to keep the fab profitable,” said Neil Shah, partner, and co-founder at Counterpoint Research. “So, TSMC would look to move as much business as possible from its customers to the Arizona fab to match current and future capacity, maintain the utilization rate, and then build on the yield rate to maximize efficiency.”

Impact on US semiconductor ambitions

Apple and Nvidia, among others, have traditionally sourced chipsets from the Asia-Pacific region. The CHIPS and Science Act aims to shift this dependency toward localized production, promising benefits such as shorter lead times, a more resilient supply chain, reduced reliance on Taiwan, and lower logistics costs.

“Thanks to various sanctions, policy, government support, academic initiatives, and investments from private entities such as TSMC, the goal looks achievable,” said Shubham Pandey, senior analyst at Everest Group. “However, the desired results look at least five years of aggressive efforts away.”

The biggest missing pieces of this puzzle remain in skilled and semi-skilled talent availability for silicon manufacturing. “While there is a significant cultural and operational gap between the two countries, the level of resources, both human and ecosystem, still needs to mature,” Shah said. “This is where the biggest adjustments will be required. Money or any number of subsidies can’t bridge this gap quickly.”


Read More from This Article: Delays in TSMC’s Arizona plant spark supply chain worries
Source: News

Category: NewsJanuary 21, 2025
Tags: art

Post navigation

PreviousPrevious post:Where CIOs should place their 2025 AI betsNextNext post:El gasto en infraestructura ‘cloud’ se duplicó el tercer trimestre de 2024

Related posts

휴먼컨설팅그룹, HR 솔루션 ‘휴넬’ 업그레이드 발표
May 9, 2025
Epicor expands AI offerings, launches new green initiative
May 9, 2025
MS도 합류··· 구글의 A2A 프로토콜, AI 에이전트 분야의 공용어 될까?
May 9, 2025
오픈AI, 아시아 4국에 데이터 레지던시 도입··· 한국 기업 데이터는 한국 서버에 저장
May 9, 2025
SAS supercharges Viya platform with AI agents, copilots, and synthetic data tools
May 8, 2025
IBM aims to set industry standard for enterprise AI with ITBench SaaS launch
May 8, 2025
Recent Posts
  • 휴먼컨설팅그룹, HR 솔루션 ‘휴넬’ 업그레이드 발표
  • Epicor expands AI offerings, launches new green initiative
  • MS도 합류··· 구글의 A2A 프로토콜, AI 에이전트 분야의 공용어 될까?
  • 오픈AI, 아시아 4국에 데이터 레지던시 도입··· 한국 기업 데이터는 한국 서버에 저장
  • SAS supercharges Viya platform with AI agents, copilots, and synthetic data tools
Recent Comments
    Archives
    • May 2025
    • April 2025
    • March 2025
    • February 2025
    • January 2025
    • December 2024
    • November 2024
    • October 2024
    • September 2024
    • August 2024
    • July 2024
    • June 2024
    • May 2024
    • April 2024
    • March 2024
    • February 2024
    • January 2024
    • December 2023
    • November 2023
    • October 2023
    • September 2023
    • August 2023
    • July 2023
    • June 2023
    • May 2023
    • April 2023
    • March 2023
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
    Categories
    • News
    Meta
    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org
    Tiatra LLC.

    Tiatra, LLC, based in the Washington, DC metropolitan area, proudly serves federal government agencies, organizations that work with the government and other commercial businesses and organizations. Tiatra specializes in a broad range of information technology (IT) development and management services incorporating solid engineering, attention to client needs, and meeting or exceeding any security parameters required. Our small yet innovative company is structured with a full complement of the necessary technical experts, working with hands-on management, to provide a high level of service and competitive pricing for your systems and engineering requirements.

    Find us on:

    FacebookTwitterLinkedin

    Submitclear

    Tiatra, LLC
    Copyright 2016. All rights reserved.