Push for U.S. semiconductor plants runs into high costs and shortage of skilled personnel

See TSMC’s Arizona Chip Plant, Awaiting Biden Visit, Faces Birthing Pains by Yang Jie of The WSJ. Excerpts:

"The $12 billion Arizona semiconductor plant under construction that President Biden is visiting Tuesday represents U.S. hopes for a renaissance in manufacturing, but the Taiwanese company building it says it won’t be easy.

High costs, lack of trained personnel and unexpected construction snags are among the issues cited by Taiwan Semiconductor Manufacturing Co. TSM 0.93%increase; green up pointing triangle

as it rushes to get the north Phoenix factory ready to start production in December 2023.

“A range of construction costs and project uncertainty in Phoenix makes building the same advanced logic wafer fab in Taiwan considerably less capital intensive,” TSMC said in a letter last month to the Commerce Department.

“The real barrier” to setting up manufacturing in the U.S. “is comparative cost to build and operate,” it said."

"Mr. Biden has been pushing to bring more high-tech manufacturing to the U.S. In August, he signed a law that includes $52 billion in direct aid for building semiconductor plants"

"TSMC executives have said it isn’t easy to re-create in America the manufacturing ecosystem they have built over decades in Taiwan, drawing on local engineering talent and a network of suppliers including many in East Asia. Mr. Chang said the cost of making chips in Arizona may be at least 50% higher than in Taiwan.

The company’s letter to the Commerce Department, in which it responded to the department’s request for public comments about U.S. chip-subsidy programs, was frank in listing the problems that have emerged during the Arizona construction.

It named six, including federal regulatory requirements, “unexpected work developments” during construction and additional site preparation, all of which it said raised costs.

TSMC has shipped as much equipment as possible from Taiwan, including clean-room equipment and chip-making tools, because American suppliers cost more or aren’t available, people familiar with the project said.

Another challenge is personnel. TSMC has invested more in recruiting after struggling to find new engineering graduates in the U.S., said people familiar with its efforts. Engineers hired in the U.S. are sent to Taiwan for a year or a year and a half of training, they said."