On July 20th, during TSMC’s performance briefing to institutional investors, the company once again revised down its full-year revenue outlook and disclosed that the 4-nanometer chip production schedule at its Arizona plant in the United States has been postponed from the original plan of 2024 to 2025.
BBC reported that this delay dealt a heavy blow to U.S. President Joe Biden’s ambitions of revitalizing the American semiconductor industry.
TSMC Chairman Mark Liu stated that the delay in production at the U.S. plant was due to a shortage of skilled workers for installing equipment. To address this issue, TSMC has dispatched personnel from Taiwan and increased training for U.S. technicians. TSMC President Wei Che-jia also mentioned that although the demand for AI has increased, it is not enough to compensate for inventory adjustments and the disruptions caused by unfavorable economic prospects. Consequently, both wafer fabrication and IC design client revenues have been further revised downwards.
TSMC also revealed its financial performance for the second quarter of this year, reporting a 23.3% decrease in net profit compared to the same period last year and a 10% decrease in sales. This marks the first time in nearly four years that TSMC has recorded declines in both sales and profits simultaneously.
BBC pointed out that in 1990, the United States accounted for approximately 40% of global chip production, but that share has now dwindled to only 10%. In 2022, President Biden signed the CHIPS Act, promising $280 billion in subsidies to manufacturers, and TSMC’s Arizona plant became one of the largest foreign investment projects in U.S. history. The announcement of the production delay by TSMC undoubtedly deals a major blow to Biden’s American chip dream.
Bloomberg also highlighted that Biden’s reelection campaign is centered on promoting “Bidenomics,” emphasizing his policies to boost the U.S. economy and bring more supply chains back to the United States. With TSMC’s Arizona plant production delay, it certainly poses a setback for Biden’s economic agenda.
Additionally, the reports mentioned that Arizona is one of the key battleground states in the 2023 U.S. presidential election, and TSMC’s announcement of the production delay at this time is not good news for Biden.