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On August 9, TSMC, the world's leading foundry, announced that its first 4nm wafer fab in Arizona was originally scheduled for mass production in 2024, but was later postponed to 2025. The official reason given by TSMC was the lack of skilled workers in the area. However, according to the latest report from the New York Times, due to regional cultural differences, the startup and operation of TSMC's wafer fab in Arizona was much more difficult than expected.

One big problem, the report said, is that TSMC has been trying to do things the Taiwanese way, even in the U.S. In Taiwan, TSMC is known for its extremely demanding work requirements, including 12-hour workdays that stretch into weekends and often calling employees in the middle of the night to respond to emergencies.

TSMC seems to have realized that Taiwan’s workaholic culture doesn’t apply to the U.S., at least not without major modifications to create a more balanced work-life equation. After all, the company has scaled back meetings at its U.S. fabs and tried to reduce workloads for U.S. employees.

Additionally, TSMC managers in Taiwan would use heavy-handed management practices and threaten workers with termination for relatively minor missteps. TSMC quickly learned that this approach wouldn’t work in the U.S., either. Recent reports indicate that the company’s Arizona workforce is leaving its new facility over these “perceived abuses,” and TSMC is struggling to fill those vacancies. TSMC already relies heavily on Taiwanese workers, with nearly half of its current 2,200 employees in Phoenix being transplants from the island.

The move to start chip manufacturing in Arizona is seen as a way to boost U.S. advanced chip manufacturing and reduce reliance on imports from Taiwan, China. This is considered critical given the growing tensions between the United States, China and Taiwan. U.S. Commerce Secretary Gina M. Raimondo previously said that 92% of the country's advanced chips come from Taiwan.

TSMC has pledged to invest $65 billion to build three advanced process wafer fabs in Arizona, USA. The US Department of Commerce will provide it with $6.6 billion in subsidies under the Chips and Science Act. TSMC will create 6,000 jobs at the facility. Ultimately, TSMC is also eager to reduce the ratio of Taiwanese immigrants to local employees at its Arizona wafer fab.

“We want to make this a successful plant and a sustainable plant,” said Richard Liu, director of employee communications and relations at the Arizona plant. “Sustainable means we can’t continue to rely on Taiwan to send people here.”

However, at the heart of TSMC's struggle is that it is trying to attract and retain the top 1% of talent in the United States, while their salary levels are stuck around the top 20%. This is an unsustainable paradigm, especially when chipmakers are competing directly with highly regarded startups, hedge funds and investment banks to attract this talent. On the other hand, TSMC's Arizona fab talent also faces competition from Intel, which is also in the region.

To completely solve this problem, TSMC either offers considerable benefits or tries to establish extensive partnerships with American universities and then provide internal training. However, the former method is quick but will significantly increase costs; the latter option is very time-consuming.

Editor: Core Intelligence-Rurouni Sword