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TSMC Arizona Chip Plant Delays Show US Isn’t Ready to Outpace Taiwan in AI Tech

Fred Chen

Moderator
Last Updated Jan 17, 2025 | 3:31 PM UTC
By Kurt Robson
Edited by Samantha Dunn

Key Takeaways:
  • - CEO C. C. Wei has revealed that TSMC’s U.S. factory is unlikely to receive the most advanced chip technology before Taiwan.
  • - The CEO claimed building in the U.S. has taken twice as long as it would have in Taiwan.
  • - Rival Samsung is set to go head-to-head with TSMC in the U.S. as it gears up to start production on new 2nm and 3nm chips by 2026.
Taiwanese Semiconductor Manufacturing Co. CEO C.C. Wei has revealed that it is unlikely its U.S. plant will get the most advanced chip technology before its factories in Taiwan—citing issues with construction regulations and requirements.

The comments highlight Big Tech’s criticism of the challenging regulatory environment in the U.S., which they claim is impeding the efficiency of building new infrastructure.

TSMC U.S. Delays​

During an event at National Taiwan University, TSMC CEO Wei said building its new factory in Arizona had taken more than double the time it would have taken in Taiwan, Reuters reported.

“Every step requires a permit, and after the permit is approved, it takes at least twice as long as in Taiwan,” Wei said.
He added that it would be difficult for the chipmaker to use its latest technology in the country before Taiwan.

TSMC, the world’s biggest chip company, said that most of its chip manufacturing would remain in Taiwan.

U.S. Domestic Chip Manufacturing​

The recent comments raise concerns for U.S. domestic manufacturing.

The 2022 Chips Act, introduced by President Joe Biden, was designed to reduce the country’s reliance on advanced chips produced in China and elsewhere, incentivizing more manufacturing on domestic soil.

According to the Semiconductor Industry Association, the U.S. share of semiconductor manufacturing fell from 37 percent in 1990 to 12 percent in 2020.

This decline highlights a growing vulnerability in the U.S. supply chain at the time as semiconductors became critical to national security and technological competitiveness.

Major semiconductor manufacturers, including Intel, TSMC, and Samsung, have responded to the act by announcing significant investments in U.S.-based facilities.

Big Tech Criticism​

Several prominent technology leaders have voiced concerns about the regulatory environment in the U.S.

In an interview with Bloomberg, OpenAI CEO Sam Altman said he deeply agreed with President-elect Donald Trump on “how difficult it has become to build things in the U.S.”

“Power plants, data centers, any of that kind of stuff,” he said.
The OpenAI CEO said that the “bureaucratic cruft” that piles up was not helpful to the country and its future goals.

On Jan. 15, Chris Kubasik, CEO of defense firm L3Harris Technologies, posted a letter to Department of Government Efficiency (DOGE) leaders Elon Musk and Vivek Ramaswamy criticizing the Biden administration’s bureaucratic processes.

Kubasik said the defense acquisition system is “slow and bureaucratic and does not provide our warfighters with new capabilities at the speed of relevance to the threats they are facing.”

He added that the existing structure “stifles innovation and discourages risk-taking.”

Samsung Moving Into Texas​

TSMC rival Samsung is reportedly planning to produce 2nm and 3nm chips by 2026 in the U.S. as it continues to build its new advanced semiconductor factory in Texas.

This will put the company in head-to-head domestic competition with TSMC, which is also on track to produce 2nm chips at its Arizona foundry by next year.

In April 2024, Samsung announced it would invest around $45 billion in building and expanding its Texas facilities up to 2030.

The announcement came after a $6.4 billion grant to the South Korean company by the U.S. Chips Act.

According to a new report, the company plans to produce 2nm chips at its new plant—the most advanced semiconductor yet.

Samsung will be looking to play catch up with TSMC, which is currently building its third advanced chip factory in Arizona.

Competition With TSMC​

TSMC is already making 4nm chips in its Arizona plant but aims to roll out next-generation semiconductors by the beginning of 2026.

Samsung is hoping to gain a competitive edge against TSMC through its “one-stop shop” style facility, which integrates memory chips, foundry, and chip packaging.

The chip manufacturer claimed it can create AI chips up to 20% faster.

Samsung will also reportedly apply Gate All Around (GAA) technology to develop 2nm and 3nm chips; this architecture design offers stronger control over the current flowing through the channel, significantly reducing leakage and improving efficiency.

TSMC is still aiming to use its previous Extreme Ultraviolet technology to create its 3nm chips but will switch to GAA for its 2nm deployment, the report stated.

 
My brain hurts reading this article. I think the peak of it for me was that last sentence. Can't wait to get ahold of those GAA lithography tools making N2 wafers in Arizona for 2026 over a year before the N3 equipped phase 2 is even done. I hear those GAA litho tools are just so much better than those ASML EUV steppers! Such an exciting time we live in!
 
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My brain hurts reading this article. I think the peak of it for me was that last sentence. Can't wait to get ahold of those GAA lithography tools making N2 wafers in Arizona for 2026 over a year before the N3 equipped phase 2 is even done! Such an exciting time we live in!
🤣🤣
Intel will be making GAA+BSPDN in Arizona but no one seems to care about it
 
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My brain hurts reading this article. I think the peak of it for me was that last sentence. Can't wait to get ahold of those GAA lithography tools making N2 wafers in Arizona for 2026 over a year before the N3 equipped phase 2 is even done. I hear those GAA litho tools are just so much better than those ASML EUV steppers! Such an exciting time we live in!

They probably meant to say TSMC is still aiming to use its previous FinFET technology to create its 3nm chips but will switch to GAA for its 2nm deployment.

The article was actually like a collection of five sub-articles. I really wanted to focus on the first.

TSMC's US plant unlikely to get latest chip tech before Taiwan, CEO says​

By Wen-Yee Lee
January 17, 202512:50 PM GMT+8

  • Summary:
  • - TSMC investing $65 billion in factories in Arizona
  • - TSMC chief executive describes challenges of working in US
  • - US government has offered TSMC strong support
TAIPEI, Jan 17 (Reuters) - TSMC's new U.S. plant is unlikely to get the most advanced chip technology before factories in Taiwan due to complex compliance issues, local construction regulations and various permitting requirements, the Taiwanese company's CEO said.

Taiwan Semiconductor Manufacturing Co CEO and Chairman C.C. Wei said building the new factory in Arizona has taken at least twice as long as in Taiwan, in comments detailing specific challenges for the U.S. as it seeks to rebuild its domestic chip manufacturing sector.

"Every step requires a permit, and after the permit is approved, it takes at least twice as long as in Taiwan," Wei said late on Thursday at a National Taiwan University event. He added that it would therefore be hard for TSMC to use its latest technology in the U.S. before Taiwan.

TSMC, the dominant maker of advanced chips used by companies including Apple (AAPL.O), opens new tab and Nvidia (NVDA.O), opens new tab, is spending $65 billion on three giant factories in the U.S state of Arizona.

TSMC has said most of its chip manufacturing would remain in Taiwan, especially for the most advanced chips.

Wei said at an earnings conference on Thursday that, despite various challenges and cost overruns, he was confident the Arizona factory would produce the same quality of chips as in Taiwan, and he expected a smooth ramp-up process.

At the university event, Wei said a shortage of skilled workers and gaps in the supply chain, as well as a lack of regulations involving chip plant construction, have further extended the timeline for its Arizona project.

"We ended up establishing 18,000 rules, which cost us $35 million," Wei said, noting that TSMC funded the hiring of a team of experts to work with the local government on regulatory issues.

He added that chemical supply costs in the U.S. are five times those in Taiwan, leading TSMC to ship sulphuric acid from Taiwan to Los Angeles and then truck it to Arizona.

Labour shortages have also posed challenges, with TSMC bringing half of the construction workers from Texas to Arizona, increasing costs due to relocation and accommodation, he said.

The U.S. government has offered full-throated support for the investment, including a $6.6 billion grant, as it seeks to spread geographic risk from an over-concentration of chip manufacturing in Asia, particularly Taiwan.

U.S. Commerce Secretary Gina Raimondo said last week that TSMC had begun producing advanced 4-nanometer chips for U.S. customers in Arizona, a milestone in the Biden administration's semiconductor efforts.
 
My brain hurts reading this article. I think the peak of it for me was that last sentence. Can't wait to get ahold of those GAA lithography tools making N2 wafers in Arizona for 2026 over a year before the N3 equipped phase 2 is even done. I hear those GAA litho tools are just so much better than those ASML EUV steppers! Such an exciting time we live in!

At no time ever did TSMC plan for AZ to have process technology before Taiwan.

There is no way for Samsung to go head-to-head with TSMC at 3nm and 2nm unless they have customers, which they do not.

Idiots. I hope they got paid by the word.
 
At no time ever did TSMC plan for AZ to have process technology before Taiwan.

There is no way for Samsung to go head-to-head with TSMC at 3nm and 2nm unless they have customers, which they do not.

Idiots. I hope they got paid by the word.

"Samsung will also reportedly apply Gate All Around (GAA) technology to develop 2nm and 3nm chips; this architecture design offers stronger control over the current flowing through the channel, significantly reducing leakage and improving efficiency."

This CNN reporter forgot that, according to Samsung's news release, Samsung already started high volume production of 3nm with GAA around June 2022. And we are approaching the end of January 2025.
 
"Samsung will also reportedly apply Gate All Around (GAA) technology to develop 2nm and 3nm chips; this architecture design offers stronger control over the current flowing through the channel, significantly reducing leakage and improving efficiency."

This CNN reporter forgot that, according to Samsung's news release, Samsung already started high volume production of 3nm with GAA around June 2022. And we are approaching the end of January 2025.
with Ultra large 17mm2 Chip
 
Taiwan Semiconductor Manufacturing Co CEO and Chairman C.C. Wei said building the new factory in Arizona has taken at least twice as long as in Taiwan, in comments detailing specific challenges for the U.S. as it seeks to rebuild its domestic chip manufacturing sector.

"Every step requires a permit, and after the permit is approved, it takes at least twice as long as in Taiwan," Wei said late on Thursday at a National Taiwan University event. He added that it would therefore be hard for TSMC to use its latest technology in the U.S. before Taiwan.
This is more than a little misleading. While it may take longer to build a fab in the US, if you have a development fab, like Intel does, it not require any more time to develop the process in that fab in the US than it does anywhere else. If the "twice as long as in Taiwan" statement were true for development that TSMC would be cranking out new process nodes (as opposed to nodes that are incremental improvements of the current node) every year.

I think this is just further evidence that TSMC never intended to develop their leading edge processes outside of Taiwan, just as Daniel Nenni said.
 
This is more than a little misleading. While it may take longer to build a fab in the US, if you have a development fab, like Intel does, it not require any more time to develop the process in that fab in the US than it does anywhere else. If the "twice as long as in Taiwan" statement were true for development that TSMC would be cranking out new process nodes (as opposed to nodes that are incremental improvements of the current node) every year.

I think this is just further evidence that TSMC never intended to develop their leading edge processes outside of Taiwan, just as Daniel Nenni said.

Just as Intel develops processes in country then they copy exact them to other countries. That is how it has always been done. Samsung does the same, correct?
 
This is more than a little misleading. While it may take longer to build a fab in the US, if you have a development fab, like Intel does, it not require any more time to develop the process in that fab in the US than it does anywhere else. If the "twice as long as in Taiwan" statement were true for development that TSMC would be cranking out new process nodes (as opposed to nodes that are incremental improvements of the current node) every year.

I think this is just further evidence that TSMC never intended to develop their leading edge processes outside of Taiwan, just as Daniel Nenni said.

If TSMC were to establish a development fab on U.S. soil, similar to Intel’s approach, it could slightly improve the speed and cost of building a high volume production fab in US. However, this wouldn’t fully address the challenges that CC Wei highlighted in his speech regarding the difficulties of building an advanced fab in the U.S.

If we’re skeptical of what CC Wei said, we can simply look at Intel’s actions. Last year (2024) or earlier, Intel moved its most advanced nodes, Intel 3 and Intel 4, from Oregon to Ireland for high volume production.

Why didn’t Intel migrate Intel 3 and 4 to a US based fab? Partially, it’s because Intel currently lacks an EUV capable high volume production fab on US soil. In fact, Intel hadn't built an advanced fab in the US for many years.

For example, construction on Intel’s Fab 42 in Arizona began in 2011, operations only started in 2020. The next time we heard about Intel to build new fabs in the US came on March 23, 2021, when Intel announced plans for two new chip factories in Arizona. During this same period, Intel was busy expanding its manufacturing capacity and capabilities internationally, particularly in Israel and Ireland.

TSMC, like Intel, has multiple international locations to choose from for its next big things. These include Taiwan, Japan, Germany, US, and potentially others in the future. People, companies, and governments in those locations, whether plumbers, engineers, city water department managers, chemical material suppliers, or HVAC technicians, must understand that they’re competing not only domestically but also globally.

If they fail to meet expectations, TSMC’s customers could force the company to make decisions that may not be very favorable to the locations where they operate.
 
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Just as Intel develops processes in country then they copy exact them to other countries. That is how it has always been done. Samsung does the same, correct?
You are correct, though at one point Intel did move their design team into the newest fab to develop the process and then have the HVM organization join them in the new fab to learn the new process and ramp to HVM as opposed to the current practice of keeping the process development team permanently assigned to the Oregon fabs.

The biggest issue is that an R&D fab is more expensive to run than an HVM fab, it would be an unsound economic decision to maintain two R&D fabs, so TSMC's development, and therefore, their leading edge technology was always going to start out in Taiwan. I don't have a particular problem with that. I just find it a bit disingenuous to claim that TSMC can't do their R&D in the US because building fabs is slower than in Taiwan. I'd rather Mr. Wei just came out and said it doesn't make economic sense to do R&D in two locations.
 
You are correct, though at one point Intel did move their design team into the newest fab to develop the process and then have the HVM organization join them in the new fab to learn the new process and ramp to HVM as opposed to the current practice of keeping the process development team permanently assigned to the Oregon fabs.

The biggest issue is that an R&D fab is more expensive to run than an HVM fab, it would be an unsound economic decision to maintain two R&D fabs, so TSMC's development, and therefore, their leading edge technology was always going to start out in Taiwan. I don't have a particular problem with that. I just find it a bit disingenuous to claim that TSMC can't do their R&D in the US because building fabs is slower than in Taiwan. I'd rather Mr. Wei just came out and said it doesn't make economic sense to do R&D in two locations.
"I just find it a bit disingenuous to claim that TSMC can't do their R&D in the US because building fabs is slower than in Taiwan."

I'm confused. Where did you see that?
 
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