Samsung (005930.KS) is delaying chip production at its new plant in Texas until 2025, according to Bloomberg and the Seoul Economic Daily. This comes after Taiwan Semiconductor Manufacturing Company (TSM) delayed the opening of its new Arizona plant.

Yahoo Finance's Jared Blikre and Brad Smith discuss the news. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- The quest to reshore chip production has been a big talking point this year with most of the discussion surrounding President Biden's landmark CHIPS Act and how his administration aims to boost domestic capacity. It comes as the AI innovation continues to demand more from manufacturers.

And Biden's plan launched with much fanfare, that was only a year ago, but the endeavor has hit some roadblocks over the last few months. Taiwan Semi, TSMC, they delayed the opening of its US-based chip fab earlier this year. Now, according to the Seoul economic daily, Samsung has decided to delay chip production at its new plant out in Texas until 2025.

And I think the biggest downbeat here that I'm seeing in reaction is that this is happening in an election year. And so there was some stimulus that was expected to happen, maybe it gets pushed out to 2025. But it raises the excellent point that there's $100 billion that has not been tapped yet that is going to come online over the next few years. And for anybody worried about recession in 2023, that's just going to be more fiscal stimulus. The powerful kind. That's not the Fed kind. That's the real powerful kind. That is coming to the markets as well.

- Yeah, we saw back in July, TSMC had to lower its financial guidance, and ultimately, on the revenue side, they were forecasting and looking for a potential 10% year-over-year decline. That on the order front. You also combine that what they'd seen on the labor shortage front too, looking for highly skilled workers, which it's going to take in order for them to make sure that they're meeting the market demand.

And then you combine within this broader environment, just as you were mentioning, the amount of capacity that's set to be brought online from some of the other players who had been largely in the design space now looking to fabricate even more to decrease this reliance that we had seen many companies have on Taiwan Semiconductor for that fabrication process.

- And it's an important one. I don't want to downplay that. It's something that needs to happen because as we saw, when supply chains get severely disrupted, that threw the entire world economy off kilter for about what, 18 months.