At least five chemical and material suppliers for TSMC and Intel have delayed construction on facilities in Arizona, citing issues related to the rising cost of building materials and a shortage of construction workers.
According to a report from Nikkei Asia, while some of the delays are expected to be temporary, other projects have been significantly scaled back or will be subject to a later review, with no apparent timeframe on when construction might restart.
The news outlet spoke to three executives who said that the cost of building a plant in Arizona has ballooned to four or five times what it would be in Asia and is "several times" higher than they previously expected to spend.
The impacted companies are LCY Chemical, Solvay, KPPC Advanced Chemicals (Kanto-PPC), and Topco Scientific, which have all delayed or postponed the construction of their facilities. Meanwhile, Chang Chun Group has significantly scaled back its new plant.
All of the companies bought land in Casa Grande, a town southeast of Phoenix, and announced plans to build facilities in Arizona following TSMC and Intel making multi-billion dollar investments in the state. Casa Grande is a 30-minute drive from Intel’s site and an hour away from TSMC’s facility.
However, in January 2024, TSMC announced that production at its $40 billion Arizona fab had been delayed for a second time, due to issues with securing funding from the US government and an ongoing shortage of talent in the region.
Construction work on Intel’s two $30bn chip fabs in Chandler, Arizona, has also been slower than expected. The region has suffered from surging costs for building and labor, while the flood of investments in the state has squeezed the building sector and led to a shortage of construction workers.
Speaking to analysts in January after TSMC posted its financial results for the fourth quarter of 2023, outgoing chairman Mark Liu said the company was working with the Arizona Building and Construction Trade Council to provide “enhanced workforce training and development” for the local workers it was committed to hiring.
