Taiwan Semiconductor Manufacturing Co.’s plan to build two fabs in Arizona for $40 billion could face more delays, company executives revealed during a news conference today.

Three years ago, TSMC set aside $12 billion to build a single chip plant in Arizona. The following year, the company more than tripled the project’s budget to $40 billion. The revised investment plan is set to see TSMC build not one fab as it planned in 2021 but two.

The first fab was originally set to make chips based on a five-nanometer process. When it updated its investment plan in 2022, TSMC switched to a more advanced four-nanometer process. As part of the budget increase, the company also announced plans to build a second chip plant nearby that will use three-nanometer technology.

During today’s news conference, TSMC chair Mark Liu said that the chipmaker is revising its construction roadmap for the second, more advanced fab. The company had originally hoped to start mass producing three-nanometer processors at the facility in 2026. The launch date has been pushed back to 2027 or 2028, Liu detailed. 

It’s also possible the chips the fab is set to make won’t be based on a three-nanometer process. According to Liu, the process that the plant will use has not yet been determined. That raises the possibility that the fab’s production lines will feature less advanced manufacturing technology.

TSMC previously extended the construction timeline of the second, four-nanometer fab that it’s building. Last July, the company disclosed that it was expecting to start mass production in 2025 instead of this year as originally planned. At the time, Liu detailed that the delay is partly caused by talent shortages, a challenge he reiterated during today’s news conference.

The U.S. semiconductor sector is poised to receive $52.7 billion in subsidies through the CHIPS and Science Act that President Joe Biden signed into law last year. Today, the Wall Street Journal reported that negotiations between the Biden administration and TSMC over subsidies for the Arizona fab project have “proven challenging.” The disagreements reportedly revolve around details such as the value of the financial support that TSMC will receive.

Alongside the update on its Arizona fab project, the chipmaker today released its fourth-quarter financial results. The company’s revenue declined 1.5% year-over-year, to 625.53 billion New Taiwan dollars, or $19.62 billion, while its net profit dropped 19.3%. TSMC nevertheless managed to top analyst expectations.

The company expects its sales to climb more than 20% this year thanks partly to increased demand for AI chips. According to TSMC, such processors are set to account for nearly a fifth of its total revenues in a few years. The company will spend $28 billion to $32 billion on capital expenditures such as manufacturing equipment in 2024 to support sales growth.

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