Biden’s campaign for US-made chips is at risk because of TSMC’s Arizona Delay.

One of President Joe Biden’s most significant legislative victories could suffer a serious setback when Taiwan’s largest chipmaker claims it was forced to postpone production at its flagship project in Arizona, a crucial swing state in the upcoming election.

The administration has spent billions of dollars on subsidies and tax incentives as part of the so-called Bidenomics campaign to lure employment back to the US, notably in high-tech industries like semiconductors.

The top chipmaker in the world, Taiwan Semiconductor Manufacturing Co., announced in 2020 that it will invest $12 billion at a facility outside of Phoenix with the intention of producing premium semiconductors there by the end of 2024.

The business revealed on Thursday that it will delay starting production at the Arizona factory until 2025, which would be after the US presidential elections.

It highlighted the need for skilled staff as well as the high cost of living in America as reasons for the delay.

That’s not good news for Biden, who is currently campaigning around the nation to persuade skeptics that he deserves a second term primarily because his signature policies will boost their local economies.

Although there is substantial and bipartisan support for the program in Congress, it is unclear what would happen to the subsidies under a new government.

Before the delay to the marquee US Project, TSMC reduced its 2023 Outlook.

The TSMC plant is located in a swing state that Biden won in 2020, despite the fact that many of the early initiatives sparked by Biden’s industrial policies, particularly in the clean energy and electric vehicle industries, are in Republican strongholds.

The CHIPS and Science Act’s workforce development provisions, according to White House Deputy Press Secretary Olivia Dalton, “will enable us to ensure that we have the workforce we need.”

She referred to the company while calling TSMC’s investment “historic” and declining to comment on the time frame.

Democratic US Senator Mark Kelly from Arizona expressed concern but acknowledged that “big programs often result in this type of delay.”

Phoenix-based Republican political consultant Marcus Dell’Artino said he was not surprised that the chipmaker was having trouble filling positions given the region’s competitive labor market.

Nobody is surprised that they are having difficulty hiring employees, he claimed. Everyone running a business in Arizona is confronted with the same issue. It’s harder to find qualified people quickly than by posting a Help Wanted ad. For jobs, there is a lot more competition.

He claimed that while the Phoenix region’s rapid growth has resulted in an influx of new residents, they are also raising housing costs, which may make it more difficult to draw in new residents. That’s much more difficult for a highly skilled industry like chipmaking, he claimed.

Even more startling, he claimed, is that no one anticipated this issue.

When Biden visited the Arizona location in December of last year, he hailed it as a potential “game changer” that would enable Apple Inc. to bring more of its supply chain home.

By declaring its commitment to construct a second plant in Arizona and increasing the overall investments to $40 billion, TSMC gave Biden’s aim a boost in return. The Taiwanese chip manufacturer also said that its first plant’s planned technology will be upgraded.

Tim Cook and Joe Biden applaud TSMC’s $40 billion US chip venture.

The White House has cited TSMC as well as planned investments by Samsung in Texas and Intel in Ohio, which Biden calls a “field of dreams,” as proof that their mission is succeeding.

The federal funds’ awardees have not yet been announced by the Commerce Department, and it is unclear when the top companies will start making chips in the US.

Raul Grijalva, a representative from Arizona, stated, “I thought it was on track.” It’s not only a shock. We are questioning something that was thought to be on track and are feeling disappointed about where things are right now.

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