TSMC's Arizona plant delayed into 2025 amid worker shortage

TSMC, the world’s largest semiconductor manufacturer, is having trouble finding enough skilled workers to install equipment at its new Arizona fab, the company’s first U.S. plant, which will delay the facility’s opening into 2025, according to TSMC Chairman Mark Liu.

Speaking on the company’s second quarter earnings call, Liu said, according to a Refinitiv Streetevents earnings transcript:

“In Arizona, we are building a first fab to provide U.S. most advanced semiconductor technology in mass production to support the needs for U.S. semiconductor infrastructure. Our fab in Arizona started construction in April 2021 with an aggressive schedule. We are now entering a critical phase of handling and installing the most advanced and dedicated equipment. 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. While we are working to improve the situation, including sending experienced technicians from Taiwan to train the local skilled workers for a short period of time, we expect the production schedule of N4 process technology to be pushed out to 2025.”

The comments came as TSMC also reported that the company is still being challenged by macroeconomic headwinds and customer inventory adjustments that are offsetting even the persistent demand for AI chips. TSMC CEO C.C. Wei remarked:

“Moving into third quarter 2023, while we have recently observed an increase in AI-related demand, it is not enough to offset the overall cyclicality of our business. We expect our business in the third quarter to be supported by the strong ramp of our 3-nanometer technologies, partially offset by customers' continued inventory adjustment. In the last quarterly conference, we said we expect fabless semiconductor inventory to rebalance to a healthier level exiting the third quarter. This statement continues to hold true. However, due to persistent weaker overall macroeconomic conditions, slower-than-expected demand recovery in China, and overall softer end market demand conditions, customers are more cautious and intend to further control their inventory into 4Q '23. Thus while we maintain our forecast for the 2023 semiconductor market excluding memory to decline mid-single digit year-over-year, we now expect the foundry industry to decline mid-teens and our full year 2023 revenue to decline around 10% in U.S. dollar terms.”

TSMC’s second quarter earnings report featured a posting of more than $15.3 billion, which was ahead of consensus estimates, but profit plummeted during the quarter by more than 23% to $5.85 billion, marking the first quarterly profit decline for TSMC in four years. For the third quarter, the company said it expects revenue to land in the range between $16.7 billion and $17.5 billion.