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The Taiwan Semiconductor Manufacturing Company (TSMC)'s decision to dispatch 500 contracted workers to America in its bid to complete a new manufacturing facility being built in Arizona continues to generate controversy. TSMC's Arizona plant has been hyped up in the press. Still, as market conditions deteriorated, the semiconductor firm announced late last month that the U.S. chip facility would be delayed by a year.

TSMC's latest update from the site before the delay announcement came in December 2022, where it shared that it has also started building another fab that will manufacture 3-nanometer chips in 2026. 3-nanometer is currently the industry's leading edge semiconductor node, and TSMC plans to jump to its successor before 3-nanometer production kicks off in 2026.

TSMC's Claim Of Lack of Skilled Workers In America Generates Strong Response From Trade Union

TSMC has big plans for the Arizona site for making money and creating jobs. The firm aims to produce more than $40 billion worth of products from the site to equalize the capital spent to build the advanced chip manufacturing facilities currently only in a handful of countries worldwide.

Its estimates show that when the Arizona fabrication is at peak operational levels, it will require 10,000 high-paying workers, including 4,500 full-time TSMC employees. This is the same number of people that have participated in building the site, and the tools that will make advanced chips have already arrived at the facility.

However, installing these machines has proved trickier than expected, as this is the primary reason production at the site has been delayed by a year, according to statements from executives. While TSMC's latest chip manufacturing technologies are clumped under the N3 category, the Arizona site is initially expected to produce N4 technologies first, with N3 production expected in 2026.

Now, the fab is busy defending itself from an opinion piece written by Arizona's building and trade construction council president in the Phoenix Business Journal. The piece insinuated that TSMC is bringing in foreign workers to the site to save on labor costs, and its decisions had left existing construction workers feeling that they were "descoped."

In response, TSMC's latest statement defends the firm and maintains that installing semiconductor fabrication machines requires a precise skill set. Training workers in the U.S. will take longer, and flying in roughly 500 people from Taiwan will help expedite the production timeline.

The chipmaker says these technicians will help equip the site with mass production capabilities, and the workers will only stay temporarily in America. TSMC's initial statement, which followed a media report about the Taiwanese workers coming to America, also stressed that they would not affect existing jobs at the U.S. plant in any manner.

The firm is currently amid a sharp inventory correction in the semiconductor industry that has seen TSMC predict a $3.5 billion revenue drop in Q3 2023. According to management, the slowdown in the chip sector will persist for longer than expected, leading to lower orders.

Its Arizona site is expected to significantly add to existing capacity, with current estimates placing production from the two fabrication plants at the complex at roughly 600,000 wafers per year. Estimates from The Information Network estimate that an N5 wafer was priced at $13,400 as of June, while an N3 wafer was sold for $19,865.

Rudimentary calculations show that the Arizona plant will have to sell all its output for a couple of years to break even with the $40 billion investment costs which TSMC has shared. Production delays also increase the firm's expenses since regular capital outlays must be made to sustain the site's management and operations before processing wafers.