TSMC's new facility in the United States is not expected to receive the latest chip technology ahead of its Taiwanese counterparts due to intricate compliance challenges, local construction laws, and a variety of permitting processes, according to the CEO of the Taiwanese firm.
C.C. Wei, CEO and Chairman of Taiwan Semiconductor Manufacturing Co, noted that the construction of the new plant in Arizona has taken at least twice as long compared to similar projects in Taiwan, highlighting specific obstacles faced by the U.S. as it aims to revitalize its domestic chip manufacturing industry.
"Each phase necessitates a permit, and once a permit is granted, the timeline extends to at least double that of Taiwan," Wei remarked during a National Taiwan University event on Thursday. He emphasized that this situation makes it difficult for TSMC to implement its most advanced technology in the U.S. before it does in Taiwan.
As a leading manufacturer of advanced chips utilized by firms such as Apple and Nvidia, TSMC is investing $65 billion in three large factories in Arizona.
The company has indicated that the majority of its chip production will continue to take place in Taiwan, particularly for the most cutting-edge chips.
During an earnings conference on Thursday, Wei expressed confidence that, despite various challenges and budget overruns, the Arizona facility would deliver chips of the same quality as those produced in Taiwan, and he anticipated a smooth ramp-up process.
At the university event, Wei also pointed out that a shortage of skilled labor, supply chain disruptions, and insufficient regulations regarding chip plant construction have further delayed the timeline for the Arizona project.
"We ended up establishing 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 those in Taiwan, leading TSMC to ship sulphuric acid from Taiwan to Los Angeles and then truck it to Arizona.
Labour shortages have also posed challenges, with TSMC bringing half of the construction workers from Texas to Arizona, increasing costs due to relocation and accommodation, he said
The U.S. government has expressed strong backing for the investment, providing a $6.6 billion grant as part of its strategy to diversify the geographic risk associated with the heavy concentration of chip manufacturing in Asia, especially in Taiwan.
Last week, U.S. Commerce Secretary Gina Raimondo announced that TSMC has commenced the production of advanced 4-nanometer chips for U.S. clients in Arizona, marking a significant achievement in the Biden administration's semiconductor initiatives.