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TSMC’s struggles with its main American chipmaking facility in Arizona are common knowledge by now, reinforced by a steady stream of leaks and expert commentary in recent months. Two factors are said to be at the heart of the Arizona plant’s inability to take off: a difference in American and Taiwanese work cultures, and TSMC’s penchant for cutting corners on wages.
Today, the New York Times published a detailed commentary on the TSMC dilemma, highlighting, among other things, frustration among American workers over grueling working conditions and management’s attempts to involve employees in tasks beyond their job description in an attempt to avoid further delays in operationalizing the manufacturing facility.
Keep in mind that TSMC has already delayed the commissioning of its Arizona facility, with commercial operations now expected to begin only in the first half of 2025.
This follows our own communicating in this issue, where we highlighted Arizona’s freshwater shortage as a critical hurdle for TSMC’s manufacturing facility, exacerbating its labor shortage problem. Of course, Intel is also building a massive chip complex in the state, replete with a robust supply chain and a reliable network of university partnerships for hiring raw talent.
TSMC has realized that Taiwan’s workaholic culture isn’t applicable in the U.S., at least without major changes to create a more balanced work-life equation. So the company has cut down on meetings and tried to reduce the workload of its American employees.
No… it’s because they want to employ the top 1% of talent with the top 20% of salaries.
If you want a person with an IQ of 130 who is a math whiz to work 100 hours a week for a few years in the US, you’ll find them in hedge funds or startups in the US. https://t.co/Jh1mRkHepA
— Ate-a-Pi (@8teAPi) August 8, 2024
At the heart of TSMC’s struggles, however, is the fact that it is trying to attract and retain the country’s top 1 percent of talent at salaries that fall somewhere in the top 20 percent. This is an unsustainable paradigm, especially since the chipmaker is competing directly with award-winning startups, hedge funds, and investment banks to attract that talent.
The solution is straightforward: Either TSMC shells out much more money as a powerful incentive, or it tries to establish broad partnerships with American universities to directly hire raw talent and then provide in-house training. The latter option, however, is quite time-consuming.