Taiwan’s TSMC has signaled that its new Arizona facility is unlikely to produce the most advanced chips ahead of its Taiwan operations, with regulatory complexity, local building codes, and a multi-stage permitting process cited as the main hurdles. Industry observers say these comments reflect real-world frictions as the company expands its footprint beyond Asia.
The company’s chief executive, CC Wei, described the Arizona project as taking longer than a comparable effort in Taiwan. He outlined the challenges the United States faces while trying to rebuild domestic chip manufacturing capabilities, noting that every step requires permission and that, once permission is obtained, the timeline often stretches at least twice as long as in Taiwan at a National Taiwan University event. Consequently, Wei suggested, it would be difficult for TSMC to deploy its leading-edge technology in the United States before Taiwan.
TSMC, a major supplier to Apple, Nvidia, and other tech leaders, has invested about $65 billion to establish three large factories in Arizona. The company has previously indicated that most of its chip production, especially the most advanced ones, will remain in Taiwan.
Despite the hurdles and cost overruns, Wei expressed confidence that the Arizona plant will manufacture chips of the same quality as those produced in Taiwan and expected a smooth ramp. Still, shortages of skilled workers, persistent supply chain issues, and an uncertain regulatory framework for chip facilities have delayed the project.
Wei also noted that TSMC had to develop roughly 18,000 internal rules, a process that cost about $35 million. In addition, chemical costs in the United States run higher than in Taiwan, forcing TSMC to import sulfuric acid from Taiwan to Los Angeles and then transport it by truck to Arizona. Labor shortages also led TSMC to relocate about half of its construction workforce from Texas to Arizona, increasing moving and living costs.
The U.S. government is supporting this investment with a grant totaling $6.6 billion, aimed at reducing geographic risk by diversifying chip production away from Asia, particularly Taiwan.
Wei’s remarks raise questions about the pace and impact of that strategy. High-end chip production is likely to remain concentrated in Taiwan, even as officials announce that Arizona will begin producing cutting-edge 4nm chips for U.S. customers.
In the broader landscape, policymakers and industry players are weighing how North America can strengthen its position in next-generation semiconductor manufacturing while navigating cost and regulatory realities.