TAIPEI: Taiwan chip giant TSMC’s planned factory in the United States was making “fast progress”, the company’s chairman said Wednesday, despite it facing a delayed start due to worker shortages and reported union disputes. Taiwan Semiconductor Manufacturing Company (TSMC) controls more than half of the world’s output of microchips — the lifeblood of the modern economy and found in everything from coffee machines to cars and missiles.

Global worries about Taipei’s plummeting relations with Beijing — which claims the self-ruled island as its territory — have fuelled a US push to successfully woo the Taiwanese company into building a chip-making factory in Arizona. But the plant, one of the largest foreign investments in the United States, has been delayed until 2025, which TSMC attributed to a shortage of skilled workers, with technicians to be flown in to train the US foundry’s staff. “We don’t need to fuss — in a new place and at infrastructure built early, it won’t be running as smoothly as in Taiwan,” conceded chairman Mark Liu, speaking on the sidelines of SemiCon Taiwan, a three-day gathering of the semiconductor industry in Taipei. “But the morale of our Arizona colleagues is very high and they have made fast progress in the past few months.”

He attributed it to Arizona state and city officials “unanimously supporting and helping TSMC resolve all issues including the labour issue”. The company’s comments on skilled worker shortages had incited ire from Arizona’s unions, leading to scathing op-eds in local outlets alleging that TSMC was trying to justify bringing in Taiwanese workers. Liu acknowledged the company has been “boosting our communication recently” with the local union and community. “I think much progress has been made in recent weeks... We will execute the project successfully,” he said. Much of TSMC’s manufacturing base is in the northern Taiwanese city of Hsinchu, where its state-of-the-art facilities are producing ever-smaller silicon wafers that have skyrocketed in demand.

It has been facing pressure from the United States and its allies to build more foundries overseas as tensions surge between China and Taiwan, a democracy that Beijing has long vowed to take — by force if necessary.

Last month, TSMC agreed to invest $3.8 billion (3.5 billion euros) into a new semiconductor factory in Germany, its first in Europe, where the main focus would be on chips for the automotive industry. “We are currently applying subsidies with the German government and the EU... It’s going very well for now,” Liu told reporters at SemiCon. He also declined to comment on whether TSMC would be investing in British chipmaker Arm, which announced Wednesday it would be listing on Nasdaq — a rare tech IPO that is being closely watched by financial markets. Liu said only that his company was “evaluating” the situation.