TSMC Arizona struggles to overcome vast differences between Taiwanese and US work culture

[Fred Chen]

By Jeff Butts published 16 hours ago
Worker treatment that's acceptable in Taiwan simply won't be tolerated by US employees

Taiwan Semiconductor Manufacturing Company (TSMC), one of the world’s largest advanced computer chip manufacturers, continues finding its efforts to get its Arizona facility up and running to be more difficult than it anticipated. The chip maker’s 5nm wafer fab was supposed to go online in 2024 but has faced numerous setbacks and now isn’t expected to begin production until 2025. The trouble the semiconductor has been facing boils down to a key difference between Taiwan and the U.S.: workplace culture. A New York Times report highlights the continuing struggle.

One big problem is that TSMC has been trying to do things the Taiwanese way, even in the U.S. In Taiwan, TSMC is known for extremely rigorous working conditions, including 12-hour work days that extend into the weekends and calling employees into work in the middle of the night for emergencies. TSMC managers in Taiwan are also known to use harsh treatment and threaten workers with being fired for relatively minor failures.

TSMC quickly learned that such practices won’t work in the U.S. Recent reports indicated that the company’s labor force in Arizona is leaving the new plant over these perceived abuses, and TSMC is struggling to fill those vacancies. TSMC is already heavily dependent on employees brought over from Taiwan, with almost half of its current 2,200 employees in Phoenix coming over as Taiwanese transplants.

The move to begin manufacturing chips in Arizona was seen as one way to boost advanced chip-making in the U.S. and reduce reliance on Taiwan imports. Given rising tensions between the United States, China, and Taiwan, this is considered to be of vital importance. U.S. Commerce Secretary Gina M. Raimondo says the country purchases 92 percent of its most advanced chips from Taiwan.

TSMC has committed $65 billion to the project, The New York Times notes. Furthermore, the facility has a $6.6 billion grant from the U.S. government under the CHIPS and Science Act.

The plan is to create 6,000 jobs as TSMC builds out the rest of the facility. Ultimately, TSMC will have three different factories at its Phoenix campus, and it desperately wants to reduce the ratio of Taiwanese immigrants to local hires.

“We want to make this site a successful site and a sustainable site,” according to Richard Liu, director of employee communications and relations at the Arizona site. “Sustainable means that we cannot keep relying on Taiwan sending people here.”

TSMC Arizona struggles to overcome vast differences between Taiwanese and US work culture

Worker treatment that's acceptable in Taiwan simply won't be tolerated by US employees

www.tomshardware.com

 

[Daniel Nenni]

Ridiculous reporting. Jeff has never been in a fab much less the semiconductor industry.

Jeff Butts
Contributing Writer
Jeff Butts began tinkering with computers in the early 1980s and worked as an IT and networking consultant for 15 years before engaging in any “formal” training. Throughout his career, he worked with and supported nearly every commonly used operating system, including Windows, OS/2, Linux, and macOS. He eventually earned a Master of Information and Computing Systems and taught university English and computer science for several years before pivoting to professional writing. He’s written and edited for such outlets as The Mac Observer, How-To Geek, Hot Hardware, groovyPost, and geekRumor. When not writing, he bounces between 3D printing projects, fiddling with Raspberry Pi and the like, and Microsoft Flight Simulator.

 

[Fred Chen]

I tried to get the NY Times article earlier but hit a subscription offer wall. Here it is after opening a trial account.

What Works in Taiwan Doesn’t Always in Arizona, a Chipmaking Giant Learns​

TSMC modeled its facility in Phoenix on one at home. But bringing the company’s complex manufacturing process to America has been a bigger challenge than it expected.

By John Liu
Reporting from Phoenix

• Published Aug. 8, 2024 Updated Aug. 9, 2024

Taiwan Semiconductor Manufacturing Company, one of the world’s biggest makers of advanced computer chips, announced plans in May 2020 to build a facility on the outskirts of Phoenix. Four years later, the company has yet to start selling semiconductors made in Arizona.

The Taiwanese company’s presence in the state was viewed as an all-around win: It would boost advanced chip making in the United States and help diversify TSMC’s manufacturing away from Taiwan, an island democracy that is the focus of increasingly aggressive geopolitical claims by China. TSMC has committed $65 billion to the project, and in April, the Biden administration announced that the company would receive a $6.6 billion grant funded by the CHIPS and Science Act.

American officials have long been concerned about the country’s reliance on TSMC. Gina M. Raimondo, the U.S. commerce secretary, has said America buys 92 percent of its “leading edge” chips from Taiwan. The TSMC factory in Arizona stands as a test of American efforts to diversify its reliance on chips produced overseas.

In Taiwan, TSMC has honed a highly complex manufacturing process: A network of skilled engineers and specialized suppliers, backed by government support, etches microscopic pathways into pieces of silicon known as wafers.

But getting all this to take root in the American desert has been a bigger challenge than the company expected.

“We keep reminding ourselves that just because we are doing quite well in Taiwan doesn’t mean that we can actually bring the Taiwan practice here,” said Richard Liu, the director of employee communications and relations at the site.

TSMC modeled its Phoenix facility on its campus in Tainan, Taiwan. Credit...Cassidy Araiza for The New York Times

In recent interviews, 12 TSMC employees, including executives, said culture clashes between Taiwanese managers and American workers had led to frustration on both sides. TSMC is known for its rigorous working conditions. It’s not uncommon for people to be called into work for emergencies in the middle of the night. In Phoenix, some American employees quit after disagreements over expectations boiled over, according to the employees, some of whom asked not to be named because they were not authorized to speak publicly.

The company, which has pushed back the plant’s start date, now says it expects to begin chip production in Arizona in the first half of 2025.

The Arizona project could also face political threats. Former President Donald J. Trump, the Republican presidential nominee, told Bloomberg Businessweek in June that Taiwan had taken the chip industry away from the United States. Without naming TSMC, he criticized U.S. funding of Taiwanese companies to make chips in America.

On top of working to address the cultural differences in the workplace, TSMC is gearing up to recruit skilled workers to staff the Arizona plant for years to come. The company faces similar challenges in Japan and Germany, where it is also expanding.

In Taiwan, TSMC is able to draw on thousands of engineers and decades of relationships with suppliers. But in the United States, TSMC must build everything from the ground up.

“Here at this site, a lot of things we actually have to do from scratch,” Mr. Liu said.

The facility, surrounded by scaffolding and construction cranes, is an unmistakable landmark in northern Phoenix. TSMC has announced plans for three factories at the site, modeled after its giant campus in the southern Taiwanese city of Tainan. The first factory, a silver spaceshiplike building, is nearly complete and has begun test runs.

While it was under construction, the company sent American engineers to Tainan for training and to shadow their Taiwanese counterparts, observing TSMC’s all-hands-on-deck way of working up close.

Jefferson Patz, an engineer fresh off a master’s degree from the University of California, San Diego, went to Tainan in 2021 for 18 months of training shortly after he joined the company.

“Oh, my gosh, people work hard,” Mr. Patz said. He recalled that this initial impression had given him a strong sense of what it took to succeed in the industry.

TSMC has said it will build three factories at the site in Phoenix.Credit...Cassidy Araiza for The New York Times

After returning to Arizona, Mr. Patz said, employees were expected to pitch in with work outside their job descriptions because construction of the facility was behind schedule.

This approach did not sit well with everyone. Workers were required to do whatever was needed to finish the most pressing job, he said. Some of the American workers also found it difficult to spend a long stretch of time in Taiwan.

To address the tension between American workers and Taiwanese management, the company gave managers communication training. Since workers have complained about unnecessary meetings, the company has reduced both their frequency and the number of participants.

Three Taiwanese employees in Arizona said the company had tried to lessen the tensions. They described their workloads as less intense than in Taiwan. However, they said they were unsure if lighter workloads would continue as the factory built up to full production next year.

About half of the 2,200 workers at TSMC in Phoenix were brought in from Taiwan, 7,200 miles away. The company said it would create 6,000 jobs as it built the next two factories. It plans to eventually reduce the ratio of Taiwanese transplants to local hires.

“We want to make this site a successful site and a sustainable site,” Mr. Liu said. “Sustainable means that we cannot keep relying on Taiwan sending people here.”

Nearly 1,000 participants in Mesa, Ariz., and other cities have completed a two-week training program to become semiconductor technicians.Credit...Maricopa Community Colleges

TSMC has competition for labor in Arizona. Other companies in the area are looking for skilled workers in the race to increase production. Intel, the American chip giant, is expanding its chip factory in the area.

In response, nearby colleges and universities have ramped up their instruction in fields like electrical engineering. TSMC has collaborated with community colleges and universities through apprenticeships, internships, research projects and career fairs.

At Arizona State University, which has emerged as a major source of workers at TSMC, the company funds research projects for students, making it easier to assess and recruit future workers, said Zachary Holman, vice dean of the university’s Fulton School of Engineering.

Some colleges are even building their own clean rooms, the cavernous and spotless work areas at the heart of semiconductor factories. The idea is to acclimate students to operating in the highly controlled environments, where technicians wear clean suits and gloves.

One of those manufacturing spaces being built is at Western Maricopa Education Center, a public high school system that provides technical training.

Researchers at Arizona State University, which has emerged as a major source of workers for TSMC.Credit...Deanna Dent/Arizona State University

“We have a generation of students whose parents have never once stepped foot into an advanced manufacturing factory,” said Scott Spurgeon, the center’s superintendent. “Their concept of that is still much like the old mom-and-pop manufacturing where you show up every day and come out with dirty clothes and dirty hands.”

In nearby Mesa, Ariz., and other cities, nearly 1,000 participants have graduated from a two-week intensive program in semiconductor technician training.
“We’re becoming the Silicon Desert,” said Tom Pearson, a dean at Chandler-Gilbert Community College, one of the colleges that run the program.

John Liu covers China and technology for The Times, focusing primarily on the interplay between politics and technology supply chains. He is based in Seoul. More about John Liu
A version of this article appears in print on Aug. 10, 2024, Section B, Page 1 of the New York edition with the headline: For Taiwan Chipmaker, Obstacles at U.S. Site. Order Reprints | Today’s Paper | Subscribe

 

[blueone]

The complaining about fab work sounds familiar.

A union of Intel employees? - NW Labor Press

Matt West, who ran for Congress in the recent Democratic primary, has announced a union effort covering engineers at Intel.

nwlaborpress.org

 

[nghanayem]

The complaining about fab work sounds familiar.

A union of Intel employees? - NW Labor Press

Matt West, who ran for Congress in the recent Democratic primary, has announced a union effort covering engineers at Intel.

nwlaborpress.org

But but but… Morris Chang said Americans are soft and if problems happen over night they sit until the morning, and only the Taiwanese people are physically capable of doing any more.

 

[blueone]

But but but… Morris Chang said Americans are soft and if problems happen over night they sit until the morning, and only the Taiwanese people are physically capable of doing any more.

Please don't get me started on Morris.

One line from the article made me wonder:

After returning to Arizona, Mr. Patz said, employees were expected to pitch in with work outside their job descriptions because construction of the facility was behind schedule.

It implies they were asking engineers to do construction-related work. That seems far-fetched, or is it?

As for spending 18 months in Taiwan after I graduated from college, that would have been a non-starter for me. Not just being away from friends and family at the prime of my life would bother me, it would be an acre-sized red flag signaling indoctrination rather than actual training.

 

[osnium]

Please don't get me started on Morris.

One line from the article made me wonder:



It implies they were asking engineers to do construction-related work. That seems far-fetched, or is it?

As for spending 18 months in Taiwan after I graduated from college, that would have been a non-starter for me. Not just being away from friends and family at the prime of my life would bother me, it would be an acre-sized red flag signaling indoctrination rather than actual training.

TSMC Arizona started hiring people when the site was a construction site. Wouldn’t you need people to go to Taiwan to learn the ropes and learn how to become process engineers?

 

[osnium]

But but but… Morris Chang said Americans are soft and if problems happen over night they sit until the morning, and only the Taiwanese people are physically capable of doing any more.

Wouldn’t Morris point at Intel’s current problems and simply say “I told you so”?

 

[blueone]

Wouldn’t Morris point at Intel’s current problems and simply say “I told you so”?

That's silly.

 

[blueone]

TSMC Arizona started hiring people when the site was a construction site. Wouldn’t you need people to go to Taiwan to learn the ropes and learn how to become process engineers?

Yes, but 18 months is difficult to understand, and having process engineers work in construction, if that's what the article implied, is not something I would sign up for.

 

[BruceA]

Wouldn’t Morris point at Intel’s current problems and simply say “I told you so”?

TSMC has a unique culture that didn’t come overnight and most of the leaders are longtime and part of the ones that built the original culture and can continue to reinforce and build.

Intel needs a transformation and Pat isn’t the one as I doubt he really appreciates what customer service means and delivering PDKs. None of the internal folks really appreciate this.

Physics, chemicals and tools available to Taiwan Korea and US are the same it is the culture in the kitchen that matters. Of course having scale and customer is important if you achieve parity in technology

 

[BruceA]

Yes, but 18 months is difficult to understand, and having process engineers work in construction, if that's what the article implied, is not something I would sign up for.

They did send hundreds for between a year and longer and there is enough written about how that went. They had no clue at who they hired and how to integrate, assimilate. Than sent them all back to US fully now not they fab wasn’t ready and instead of leaving them in Taiwan to learn moor sent them instead both the new and experienced to do roll call and watch over unions people and other stuff they weren’t equipped to do, brilliance indeed in people management, LOL

 

[BruceA]

It implies they were asking engineers to do construction-related work. That seems far-fetched, or is it?

As for spending 18 months in Taiwan after I graduated from college, that would have been a non-starter for me. Not just being away from friends and family at the prime of my life would bother me, it would be an acre-sized red flag signaling indoctrination rather than actual training.

Search the many reports the reality is yes and yes

 

[blueone]

TSMC has a unique culture that didn’t come overnight and most of the leaders are longtime and part of the ones that built the original culture and can continue to reinforce and build.

Intel needs a transformation and Pat isn’t the one as I doubt he really appreciates what customer service means and delivering PDKs. None of the internal folks really appreciate this.

That's not correct. Intel has had many internal development teams who used TSMC for years as a foundry. Many engineers worked for external fabless companies before they worked for Intel. Hundreds of senior engineers know what they need from a foundry. If Intel isn't taking advantage of that, their success will take a lot longer. Gelsinger doesn't deliver PDKs. Engineering teams multiple levels down from him deliver them. I'd bet PG has never even personally reviewed PDK content or quality.

There's a lot I admire about TSMC, mostly execution in Taiwan and customer service, but their prowess in building and operating fabs in the US, so far, does not impress me much.

 

[BruceA]

That's not correct. Intel has had many internal development teams who used TSMC for years as a foundry. Many engineers worked for external fabless companies before they worked for Intel. Hundreds of senior engineers know what they need from a foundry. If Intel isn't taking advantage of that, their success will take a lot longer. Gelsinger doesn't deliver PDKs. Engineering teams multiple levels down from him deliver them. I'd bet PG has never even personally reviewed PDK content or quality.

There's a lot I admire about TSMC, mostly execution in Taiwan and customer service, but their prowess in building and operating fabs in the US, so far, does not impress me much.

Actually you don’t understand the structure at Intel. All those people are part of the design team, few are part of LTD so little experience and perspective there.

 

[blueone]

Actually you don’t understand the structure at Intel. All those people are part of the design team, few are part of LTD so little experience and perspective there.

That's very amusing. I worked at Intel in chip design for over 13 years, using TSMC on some projects. If IFS doesn't consult their internal users about PDK requirements they are fools, and I know some of the IFS people, and they aren't fools.

 

[hist78]

Wouldn’t Morris point at Intel’s current problems and simply say “I told you so”?

I think by now people can understand that semiconductor manufacturing (such as TSMC Arizona fabs) needs those people who can fit into a particular company's environment, process, procedures, standards, styles, policy, and culture. Some of those TSMC Arizona new hires are not a good match for the jobs. It's not because they are stupid or lazy. It's just not a good match. TSMC is not a charity and must deliver products and services on time and make a decent profit for its shareholders. If there is a talent shortage, TSMC must bring in the right talents from all US 50 states and around the globe to make its fabs work as efficient as possible. This is exactly how American companies compete and win in the global scale.

For example the H-1B visa is a nonimmigrant visa that allows US employers to temporarily hire foreign workers in specialty occupations. The following are H1B visa approvals received by some selected major US corporations in 2022, 2023, and 2024. The number is estimated due to those companies have multiple entities and subsidiaries. I believe for now TSMC will probably use more L1 visa (see note below) instead of H1B to bring engineers and technicians to the Arizona project.

US H1B visa approvals received by some major US corporations in 2022, 2023, and 2024:

Microsoft: 22,519
Google: 26,613
Intel: 10,572
Apple: 10,318

Source: https://h1bgrader.com/h1b-sponsors/

Note: An L-1 visa is a non-immigrant visa that allows multinational companies to temporarily transfer certain employees from their foreign offices to work in the United States. The L-1 visa is a popular choice for companies to transfer key personnel to manage operations, oversee projects, and share specialized knowledge while maintaining the company's global presence.

Source: Google Generative AI, Google Search Lab.

 

[BruceA]

That's very amusing. I worked at Intel in chip design for over 13 years, using TSMC on some projects. If IFS doesn't consult their internal users about PDK requirements they are fools, and I know some of the IFS people, and they aren't fools.

13 years than you know well the challenge and structure and why it may not or never happen! BTW what years were you at the company.

 

[BruceA]

I think by now people can understand that semiconductor manufacturing (such as TSMC Arizona fabs) needs those people who can fit into a particular company's environment, process, procedures, standards, styles, policy, and culture. Some of those TSMC Arizona new hires are not a good match for the jobs. It's not because they are stupid or lazy. It's just not a good match. TSMC is not a charity and must deliver products and services on time and make a decent profit for its shareholders. If there is a talent shortage, TSMC must bring in the right talents from all US 50 states and around the globe to make its fabs work as efficient as possible. This is exactly how American companies compete and win in the global scale.

For example the H-1B visa is a nonimmigrant visa that allows US employers to temporarily hire foreign workers in specialty occupations. The following are H1B visa approvals received by some selected major US corporations in 2022, 2023, and 2024. The number is estimated due to those companies have multiple entities and subsidiaries. I believe for now TSMC will probably use more L1 visa (see note below) instead of H1B to bring engineers and technicians to the Arizona project.

A small technicality but for the Taiwan “assignee” they are all E2.

There is the fit and desire to do semiconductor and than the fit to TSMC culture.

Let’s be honest the way and how they work for the engineer or bottom line worker little to want to work except the money. Most TSMC tolerate it for money, personal, private pride or honor. TSMC pays more and offers more upward mobility than anyone else in Taiwan. Given the culture any company that offered similar and TSMC Taiwan would have a huge attrition problem. Don’t fault the model, exploit the worker and pay them darn well and company, management, stockholder, and customers and worker all do well, suck it up and finish this for me tonight

One could argue Intel fab was similar but the stock and company did well so many stayed but lots of people always looked to leave the fab there too, fab and manufacturing is hard!

 

[hist78]

A small technicality but for the Taiwan “assignee” they are all E2.

There is the fit and desire to do semiconductor and than the fit to TSMC culture.

Let’s be honest the way and how they work for the engineer or bottom line worker little to want to work except the money. Most TSMC tolerate it for money, personal, private pride or honor. TSMC pays more and offers more upward mobility than anyone else in Taiwan. Given the culture any company that offered similar and TSMC Taiwan would have a huge attrition problem. Don’t fault the model, exploit the worker and pay them darn well and company, management, stockholder, and customers and worker all do well, suck it up and finish this for me tonight

One could argue Intel fab was similar but the stock and company did well so many stayed but lots of people always looked to leave the fab there too, fab and manufacturing is hard!

People have a variety of reasons to work for a particular industry or a particular company. Recently an ER nurse told me she works 12 hours a day and 5 days a week at the hospital. This is her routine for the past 10 or so years. ER is a tough and stressful environment but she seems happy to work there. Similarly we will find many industries and jobs are tough, stressful, and need to work long hours. There is no right or wrong. It's just the reality of the world.

The problem is some writers and some fresh new hires at TSMC Arizona have no understanding about such reality. They are free to go if they don't like the company or jobs. They are free to find whatever jobs that fit into their own career goals and lifestyles while TSMC, Intel, Microsoft, or Amazon are free to find the employees who matched the requirements and the reality of a particular position.

I remember in one article a writer reported that several TSMC US new hires complained that they are asked to use Microsoft PowerPoint to write weekly status reports.

This is a crime against humanity that TSMC has committed!