According to a Taiwanese industry expert working in America, the Taiwan Semiconductor Manufacturing Company's (TSMC) problems at its Arizona chipmaking plant stem from a poor choice of location. TSMC's Arizona factory was originally slated to start producing chips next year, but the firm confirmed at its latest earnings conference that the plant has now been delayed to 2025 as the company claims that it has been unable to find skilled workers to install the advanced chipmaking machines at the factory. However, according to Dr. Xu Jigao, an industry expert with experience working in the U.S., the Arizona site should have been located elsewhere since it creates several problems for TSMC.
Arizona's Water Shortage, Other Issues Compound Difficulties For TSMC's New Site Says Expert
Dr. Xu made the comments in an online show, and his statements were reported by the United Daily News (UDN) network. He has a doctorate in structural engineering and has set up construction firms in America that specialize in building public projects. During his interview, the executive and expert shared that TSMC's choice of Arizona for its chip manufacturing site creates new problems for the company, which could have been avoided had it decided to choose a different location.
According to him, Arizona's location makes it susceptible to water shortage due to the Colorado river, which further exacerbates the difficulties in building a new chip site in the state when combined with labor shortages in the area. He added that TSMC should have thought of a labor shortage that is now affecting the factory's mass production timeline before it started building the site.
Dr. Xu also shared examples of other companies, including TSMC's rival Samsung and car manufacturers Toyota and Hyundai, which have successfully built facilities in America. According to the expert, these are located in states such as Texas and Alabama, which have more favorable labor and other conditions.
TSMC's American rival Intel Corporation also has a manufacturing facility in Arizona and is also expanding another site to add new production lines. Intel has a robust supply chain ecosystem in the state and partnerships with universities to supply a steady stream of graduates for its workforce.
TSMC's Arizona site has been creating controversy for quite some time now. Before the fab's executives confirmed that the Arizona plant would be delayed, local workers in the area had started to worry that employees being flown in from Taiwan would take their jobs away. TSMC quickly denied this, as it assured the workers that their jobs were not at risk and that the employees from Taiwan would only stay temporarily at the plant. According to the firm, training new employees to install the advanced chipmaking machines takes time, and the Taiwanese workers will expedite the process.
Dr. Xu disagrees with the viewpoint that TSMC is bringing in workers from Taiwan to save on labor costs. While he appreciated the work ethic of the Taiwanese workers, the expert believes that it is unwise for TSMC to simply transfer everything from Taiwan to the U.S. According to him, setting up a successful manufacturing site in America requires putting down roots in the country and even training the local workforce if required.
He added that the Taiwanese firm should learn from the example of Korean and Japanese companies that have established a successful manufacturing presence in America. TSMC is one of the few large Taiwanese companies in the world and the first of its kind to set up facilities in the U.S.
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