President Joe Biden’s chips agenda is encountering more significant setbacks as key manufacturing projects are already experiencing delays, Nikkei Asia reported on Tuesday.
LCY Chemical, Solvay, Chang Chun Group, KPPC Advanced Chemicals (Kanto-PPC) and Topco Scientific, which are companies that produce chemicals and materials needed for chips, are pushing back their construction plans in Arizona, according to Nikkei Asia, citing executives with knowledge of the situation. These companies unveiled projects to accommodate the large-scale plant developments by Taiwan Semiconductor Manufacturing Co. (TSMC) and Intel in Arizona, and include securing land for constructing facilities in the state, aligning with the chip giants’ ambitious projects. (RELATED: Biden’s Sanctions Fail To Keep Sensitive Chip Technology Out Of China’s Hands)
Semiconductor Giant Faces US Delays While Racing Ahead In Japan Amid Biden Chips Funding Uncertainty via @DailyCaller https://t.co/DUSJH9ESKm
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Biden has made domestic chip production a major priority as the U.S. attempts to strip control of the market from China. The countries are engaged in a tech war, which is largely related to chips because they are crucial for technology like artificial intelligence.
All of the companies involved are either shrinking plans substantially or facing delays, according to Nikkei. Both TSMC and Intel, as well as other companies, had already revealed they will have significant delays in their operations.
Most of the companies say the delays are related to rising costs for construction supplies and workers, according to Nikkei. They also attributed TSMC’s and Intel’s delays as contributing factors to their own setbacks.
One factory TSMC is building in Arizona has delayed manufacturing until 2027 or 2028 instead of 2026 due to uncertainty regarding funding it will obtain from the Biden administration, according to The New York Times. Intel also faces delays for an Arizona factory, attributing the setback to the current chip market rather than funding uncertainty.
Moreover, TSMC delayed its other Arizona factory because of worker issues related to union disputes, as the giant originally scheduled completion for 2024, but now it won’t be operational until at least 2025.
TSMC’s negotiations with the Biden administration on subsidies have persisted for over a year and half since the president signed the Chips and Science Act in 2022, which allocates $53 billion to back the industry, according to The Wall Street Journal. Chip manufacturers have requested more funding than is available, leading the administration to struggle with finalizing funding decisions, Commerce Department Secretary Gina Raimondo said in February.
Meanwhile, TSMC’s factory in Japan is on track to operate on schedule as the country’s government has helped the factory by committing billions in funds as well as assisting with coordinating thousands of employees to build it, the WSJ reported.
“Thanks to President Biden’s Investing in America agenda, companies from across the world are investing billions of dollars building factories across the country and training Americans for the well-paying jobs they’ll provide. Shovels are in ground, facilities are already under construction, and Americans are already feeling the benefits of this President’s economic agenda,” White House spokesperson Robyn Patterson told the Daily Caller News Foundation.
The Commerce Department did not immediately respond to the DCNF’s request for comment.
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