TSMC’s second Arizona-based manufacturing plant could face delays of up to two years and no longer produce the promised 3-nanometer chips.
TSMC’s second plant in the state was announced in 2022 with the company increasing its investment from $12 billion to $40 billion for the new factory’s development. This plant was specifically said to be for making 3nm processors for the iPhone, though it was later revealed that all Arizona-made chips would still go to Taiwan for final assembly.
Per the Wall Street Journal, TSMC chair Mark Liu has announced that although construction of the second plant is ongoing, it will not be mass-producing processors by 2026 as planned. At present, TSMC expects it to be fully operational by 2027 or 2028, though it gave no specific reasons for the delay.
TSMC currently produces processors for a number of companies and retains a long-term relationship with Apple. Apple CEO Tim Cook has confirmed that Apple will use TSMC chips made in Arizona.
Liu also said that the new factory may not be dedicated to 3nm production. He said that the specific chip type had yet to be determined and that the choice would be affected both by customer demand and government incentives.
With the incentives in mind, since TSMC is a Taiwanese company, the U.S. does not have an income tax agreement with that country, and the chip manufacturer faces double taxation. As such, without an agreement, it’s been reported that TSMC would therefore be paying out over half of its US profits in tax.
Liu also said that TSMC is in “consistent communication with the U.S. government on incentive and tax credit support” regarding its Arizona operations.
In addition to these critiques, the company’s Arizona plant construction has been heavily criticized for being unsafe, and TSMC workers have said American staff “are the most difficult to manage.”
Stay tuned for additional details as they become available.
Via AppleInsider and The Wall Street Journal