TSMC has confirmed a delay to the start of production at its upcoming Arizona fab until 2025 at least. The Taiwanese foundry announced the postponement of the start of production from its original late 2024 kick off alongside the scaling back its initial revenue projections for this year.
The company cites difficulties in sourcing the necessary skilled labour for a leading edge fab, as well as higher expenses running a facility in the US compared with Taiwan, as being some of the key reasons behind the delay.
To combat that, TSMC has reportedly said that it is shifting some of its employees to Arizona to help with the development of its workforce. The county itself is trying to help upskill its residents, too, with Maricopa Community College working with Intel to train semiconductor technicians in less than two weeks in anticipation of the rising need for skilled workers in the area.
Though I’m not sure it that’s the requisite skill level TSMC is looking for. After all, how much can you really learn about semiconductor manufacturing in 10 days? There may also be wider economic reasons behind TSMC holding back the launch of the Arizona fab.
Despite the burst of enthusiasm for AI, and therefore demand for AI silicon of which TSMC manufactures the majority with Nvidia, that hasn’t been enough for TSMC to ride over the top of a slump in demand amidst an uncertain geopolitical climate.
This is the first quarter in four years the chipmaking giant—responsible for the current slew of Nvidia, AMD, and even Intel GPUs, as well as everything Apple-y and all of AMD’s processors, too—has posted a decline in its profit. I mean, it’s still actually making profit, so it’s not all doom and gloom, but a drop of nearly $6 billion in income is pretty significant.
Unlike many in the tech industry, TSMC isn’t betting the farm on AI, at least not in the short term. TSMC chairman, Mark Liu, is quoted in Bloomberg as saying: “The short-term frenzy about AI demand definitely cannot be extrapolated for the long term. Neither can we predict for next year how the sudden demand will continue or flatten out.”
That’s the short-term, however, as TSMC CEO C.C. Wei reinforced its belief that AI was going to be foundational industry for the contract chip manufacturer going into the future.
“ChatGPT right now,” says Wei, “reinforces the already strong conviction that we have in HPC and AI as a structurally megatrend for TSMC’s business growth in the future.”
