Whether it’s complex compliance issues, local building regulations or licensing requirements of all kinds – all of the above, or more – but TSMC’s new US factory is unlikely to contain the latest chip technology. First, such advanced technologies will be tested in Taiwan, the TSMC CEO revealed. CC Wei, CEO and Chairman of TSMC, highlighted the challenges of setting up a new factory in Arizona, noting that the process took at least twice as long as similar projects in Taiwan. Reuters reports.

Speaking at an event at National Taiwan University, Wei explained that every step of the construction process required permits, and once approved, the timeline significantly exceeded Taiwan’s own. He expressed doubts about whether TSMC would be able to deploy its latest technology in the United States before doing so in Taiwan.

TSMC, as you know, supplies companies like Apple and Nvidia with high-quality silicon. TSMC is investing $65 billion in three massive facilities in Arizona. Despite this expansion, the company reiterated that most of its chip production, especially its cutting-edge technologies, will remain based in Taiwan. Wei addressed these issues during an earnings conference call, acknowledging cost overruns and other hurdles, but maintaining confidence that the Arizona plant would produce chips of the same quality as those made in Taiwan. He expects a smooth increase in production once operations begin.

At the university event, Wei detailed specific obstacles, including the lack of skilled labor, supply chain inefficiency, and the lack of clear regulations for building chip factories in the United States. To address regulatory challenges, TSMC created 18,000 compliance bases at a cost of $35 million, funding a dedicated team to cooperate with local authorities.

Wei also pointed to high operating costs in the United States, especially for chemical supplies, which are five times more expensive than Taiwan. For example, TSMC had to ship sulfuric acid from Taiwan to Los Angeles and then truck it to Arizona.

Labor shortages exacerbated these difficulties, as TSMC moved half of its construction workforce from Texas to Arizona, increasing expenses due to transportation and housing.