Taiwan Semiconductor Manufacturing Company (NYSE: TSM) shares fell 0.61 after the world’s largest chipmaker announced a further delay in its $40 billion chip project in Arizona.
TSMC has announced an additional delay for its $40 billion facility in Arizona, delivering another setback to the Biden administration’s initiatives to strengthen the manufacturing of crucial components within the United States.
Chairman Mark Liu stated that the facility, initially expected to start operations in 2026, will now be functional in 2027 or 2028.
He informed analysts during an earnings call on Thursday,
“There will be a gap.”
Liu mentioned that the construction of the outer structure of the factory has commenced. However, the Taiwanese chipmaking giant is in the process of evaluating the extent of incentives that the US government can offer. TSMC is communicating with US officials regarding the matter, including potential tax credits.
This marks the second time Taiwan Semiconductor Manufacturing Company (NYSE: TSM) has faced delays in its plans for expansion in Arizona.
The company initially announced the construction of a second semiconductor plant in 2022, increasing its investment in the state from $12 billion to $40 billion. President Biden had praised this move as a sign of a resurgence in US manufacturing.
Last year, TSMC faced delays in the production at its first fab, pushing the timeline from 2024 to 2025 due to a shortage of skilled workers. There were considerations to alter the types of products manufactured. Initially, the first facility was set to produce 4-nanometer chips, and the second would focus on 3-nanometer chips, among the most advanced semiconductors.
On Thursday, Chairman Liu expressed uncertainty about the plans for the second fab, indicating that the scale of government incentives will influence the technology deployed.
The first facility remains on track for 4-nanometer technology production, scheduled to commence in the first half of 2025.
As of Friday’s close, TSMC stock was up 1.04%, with 37.70 million shares traded. The daily average trading volume stands at 10.06 million shares.