TSMC Delays Arizona Fab Deployment to 2025, Citing Shortage of Skilled Workers
by Anton Shilov on July 20, 2023 9:15 AM EST
TSMC on Thursday disclosed that it will have to delay mass production at its Fab 21 in Arizona to 2025, as a lack of suitably skilled workers is slowing down the installation of cleanroom tools. The company also confirmed that it is sending in hundreds of people familiar with its fabs from Taiwan to Arizona to assist the installation.
"We are encountering certain challenges, as there is an insufficient amount of skilled workers with the specialized expertise required for equipment installation in a semiconductor-grade facility," said Mark Liu, chairman of TSMC, during the company's earnings call with financial analysts and investors. "While we are working on to improve the situation, including sending experienced technicians from Taiwan to train local skill workers for a short period of time, we expect the production schedule of N4 process technology to be pushed out to 2025."
Construction of TSMC's Fab 21 phase 1 kicked off in April 2021, and reached completion a little behind schedule by the middle of 2022. In December of 2022, TSMC started moving equipment in. Normally, equipping a fab's cleanroom requires around a year, which is why TSMC anticipated that the chip manufacturing plant would be operational by early 2024. Apparently, installation of production tools into Fab 21 encountered several setbacks as local workers were unfamiliar with TSMC's requirements.
As it turns out, these setbacks were so severe that TSMC now expects to need an extra year to start mass production at the fab, moving the start date from early 2024 to 2025. Which, at what's now 18+ months out, TSMC isn't even bothering to provide guidance about when in 2025 it expects its Fab 21 phase 1 to start mass production – only that it will happen at some point in the year.
The impact of TSMC's Fab 21 launch delay on its U.S. customers is yet to be determined. The megafab-class facility is not nearly as large as TSMC's flagship gigafabs in Taiwan, so the impact in terms of wafer starts is not as significant as if one of the larger fabs was delayed. The most recent estimate for Fab 21 was that it would hit 20K wafer starts per month, around one-fifth the capacity of a gigafab. So the capacity loss, while important, is not critical to TSMC's overall production quotas. Though with TSMC expecting to be at full capacity in 2024, there may not be much capacity left to pick up the slack.
Likely to be the bigger concern is that Fab 21 was being built (and subsidized) in large part to allow TSMC to produce sensitive, US-based chip designs within the US. While non-sensitive chips can be allocated to other fabs in Taiwan (capacity permitting), that's not going to be a suitable alternative for chips that need to be built within the US. A one-year delay on Fab 21 is likely to throw a wrench into those plans, but it will be up to TSMC's buyers (and their government clients) on whether to accept the delay or look at alternatives.
Finally, getting back to the subject of skilled workers, late last month TSMC confirmed to Nikkei that it was in talks with the U.S. government to provide non-immigrant visas to its Taiwanese specialists to the U.S., to help at "a critical phase, handling all of the most advanced and dedicated equipment in a sophisticated facility." According to the Nikkei report, a 500-man team of technicians was dispatched from Taiwan, arriving with hands-on expertise in a diverse range of fields. This expertise includes the installation of wafer fab tools and their synchronized operation, and, among other things, construction of fab mechanical and electrical systems.
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Jorgp2 - Thursday, July 20, 2023 - link
Is it just en excuse to reduce spending for the year?meacupla - Thursday, July 20, 2023 - link
Without looking into it too deeply, I think there has been a massive increase in fab construction around the world since 2022.It's something like nearly double of 2020, and a record breaking number currently under construction.
I think there just aren't enough specialists to go around under this boom.
thestryker - Thursday, July 20, 2023 - link
Intel is building out fabs in AZ and is better to work for (scheduling and pay being predominant differences cited in print) which cannot be helping the situation.goatfajitas - Friday, July 21, 2023 - link
Yup, and they are huge here. Most people with any expertise or experience in this area already work for Intel.airdrifting - Thursday, July 20, 2023 - link
Why is it so hard to believe that most Americans are too stupid and lacking skills?Morvas - Thursday, July 20, 2023 - link
Probably because that's a stupid and ridiculous conclusion not at all backed by any evidence. Dozens of other semiconductor companies operate here without issue, including Intel. Plenty of fabs here. Tons of tech companies. No issues. TSMC is just blaming the American workforce to save face. They're filtering for young single people who are willing to slave their time away. Their AZ plans were poorly thought out and on top of that, they expect new hires to go to Taiwan for 6-18 months for extensive training just to come back here and work a brutal schedule with long shifts in a work culture that is terribly rigid, exhausting, and abusive for a pay rate that isn't quite worth it.The way they run things in Taiwan just ain't gonna fly in the US and they're too prideful to adapt. It's no surprise Intel has none of these issues and has a much higher approval rating on Glassdoor.
airdrifting - Thursday, July 20, 2023 - link
"Dozens of other semiconductor companies operate here without issue, including Intel." Did you notice they all suck that's why they wanted TSMC here?Samus - Friday, July 21, 2023 - link
Intel sucks? They got stuck on 14nm and lost the lead for nearly 6 years, but Intel has had consistently superior manufacturing process than IBM, GloFo, TSMC, etc, for decades. Yes, occasionally someone would jump over them, but they would fire right back.The reason people want TSMC here is because they are JUST a fab. Intel rarely manufactured for 3rd parties. So they aren't even an option for the competition. And when Intel has used TSMC, it was simply a business decision, not because they 'couldn't do it'
What's important to consider here is Intel is a profit driven company. They do not care about quantity or capacity. They care about margins. TSMC is the complete opposite: they run on razer thin margins, partially because they undercut the competition (mainly Samsung) but mostly because they constantly reinvest their profit into advancing new tech. This sounds promising until you realize how much that costs for such little return when the competition will be on par with a mature version of whatever TSMC spent billions rolling out within a year. Meanwhile TSMC immediately has to start spending billions on the next thing, or two things, simultaneously.
While TSMC may have a valuation 3x that of Intel, Intel has money in the bank while TSMC has contracts. In my opinion TSMC is about as risky an investment as Ukrainian grain. China could make them worth net $0 in a day if they invade Taiwan.
airdrifting - Friday, July 21, 2023 - link
Keyword: HAD, past tense. Also, you might want to look at Intel stock price before you go all fanboy mode on Intel. I still remember the Intel Core 3rd gen to 7th gen days, how they rip us off with those 5% gains and pos products, they lost their edge and drive while chasing profits, and I doubt they will make a comeback without some significant reforms.goatfajitas - Friday, July 21, 2023 - link
You are both kind of right... and definitely intel .14 was a massive shizshow, but Intel has mega $billions in reserve and plenty of time and experience to do whatever they need to. Not saying they will wind up back on top, but they easily could if they play it right.