Arizona Semiconductor Factory Delay Caused by Worker Shortage
The Taiwan Semiconductor Company (TSMC) has delayed the operational start of its first microprocessor factory in Arizona by a year. This is due to a shortage of skilled workers. The skill required to oversee the manufacturing process is highly specialised and the company foresees the need to train American workers to supplement the skilled Taiwanese workforce.
The plant is the first of two factories which were announced by the company in 2020 during the Trump era. TSMC have confirmed they will now open in 2024 and 2025.
A dip in TMSC fortunes
As a result of the announcement, TSMC’s share value, while it also announced that its profits fell by 23% in Q2, as opposed to the same period in 2022. IT is also forecasting a 10% drop in year on year sales, because of the lower demand for semiconductors. The lower demand is due to a spiked demand last year because of the semiconductor shortage.
This is in marked contrast to a heightening of economic goodwill between the two countries. In December, TMSC proclaimed it was going to triple the money it had staked to this Arizona project, to a sum close to $40bn. This is amongst the single biggest foreign investments in the US.
The Arizona semiconductor factory delay is a scenario that’s playing out against a backdrop of two political realities. The first is an ongoing trade dispute Between the US and mainland China, centred around microprocessor technology. This has taken the form of direct measures such as prohibitive tariffs against the Chinese semiconductor industry. The second is the $280bn investment which Joe Biden committed last year to high tech research and manufacturing. This is leveraged by tax breaks for companies, particularly foreign companies, to build semiconductor plants In the US.
Although the media are reporting that this represents a setback for Biden’s vision, it is unlikely to have any effect at all. Americans will still be trained. Jobs will be created. The delay is a market reality, not a setback. Unless, of course, the Republicans politicise it during the election year.
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