What Works in Taiwan Doesn’t Always in Arizona, a Chipmaking Giant Learns

Taiwan Semiconductor Manufacturing Company, one of the world’s biggest makers of advanced computer chips, announced plans in May 2020 to build a facility on the outskirts of Phoenix. Four years later, the company has yet to start selling semiconductors made in Arizona.

The Taiwanese company’s presence in the state was viewed as an all-around win: It would boost advanced chip making in the United States and help diversify TSMC’s manufacturing away from Taiwan, an island democracy that is the focus of increasingly aggressive geopolitical claims by China. TSMC has committed $65 billion to the project, and in April, the Biden administration announced that the company would receive a $6.6 billion grant funded by the CHIPS and Science Act.

American officials have long been concerned about the country’s reliance on TSMC. Gina M. Raimondo, the U.S. commerce secretary, has said America buys 92 percent of its “leading edge” chips from Taiwan. The TSMC factory in Arizona stands as a test of American efforts to diversify its reliance on chips produced overseas.

In Taiwan, TSMC has honed a highly complex manufacturing process: A network of skilled engineers and specialized suppliers, backed by government support, etches microscopic pathways into pieces of silicon known as wafers.

But getting all this to take root in the American desert has been a bigger challenge than the company expected.

“We keep reminding ourselves that just because we are doing quite well in Taiwan doesn’t mean that we can actually bring the Taiwan practice here,” said Richard Liu, the director of employee communications and relations at the site.