The semiconductor industry is a critical component of global technology advancement, powering devices and technologies that shape our daily lives. In a bid to reduce dependence on the Asian chip supply chain and bolster domestic semiconductor production, the U.S. government subsidized Taiwan Semiconductor Manufacturing Company (TSMC) for its first U.S. wafer foundry in Arizona. While this move aimed to create jobs for American workers, recent reports suggest challenges in achieving this goal, shedding light on the significant involvement of Taiwanese personnel and the potential hurdles in TSMC’s expansion plans.
The Promise of Job Creation and Supply Chain Resilience in TSMC Arizona
The decision to subsidize TSMC’s Arizona factory was driven by the goal of fostering job growth and diminishing the United States’ reliance on Asian chip suppliers. Semiconductor manufacturing requires a highly skilled workforce, making it a promising avenue for job creation. Moreover, bolstering domestic production contributes to supply chain resilience, addressing concerns about vulnerabilities stemming from overreliance on foreign manufacturers.
According to a recent report by The Financial Times, TSMC’s two factories in Arizona have plans to hire 4,500 employees, with over 2,200 positions already filled. Notably, nearly half of these recruits are professionals from Taiwan.
TSMC’s hiring strategy involves bringing in engineering graduates from Taiwan to work as technicians. The aim is for these employees to utilize their expertise to fine-tune parameters and optimize yield. However, American engineering graduates often have more enticing job prospects, making it challenging for TSMC to attract them to technician roles.
Dylan Patel, the chief analyst at SemiAnalysis, a prominent American consultancy, highlighted that while highly professional technicians can significantly enhance yield, this methodology is not explicitly documented in the United States. In contrast, Taiwanese technicians typically undergo a comprehensive four-year engineering program, but counterparts from the same engineering institutions in the United States often find higher-paying and appealing positions, such as research and development roles at Apple Inc. or opportunities with Meta Platforms, Facebook’s parent company.
Semiconductor Talent Shortage for TSMC Arizona
TSMC’s ambitious semiconductor fabrication facility in Arizona is encountering unexpected obstacles. Originally scheduled for an early 2024 launch, the project now faces delays, pushing the start date into an uncertain timeframe in 2025. These delays are primarily attributed to a scarcity of skilled workers, posing significant challenges to TSMC’s expansion goals in the United States.
Now TSMC is planning to do a small scale run to kickstart the fab in Arizona.
Read More: TSMC’s Arizona Fab Faces Delay to 2025 Due to Skilled Worker Shortage
Expansion Plans and Potential Roadblocks for TSMC Arizona
Initially envisioning a single wafer factory, TSMC has since hinted at expanding its investment in Arizona to include up to six wafer factories. The vision was to establish production capabilities on par with Taiwan’s super-large-scale gigafabs. However, recent reports express skepticism about the smooth execution of this expansion.
TSMC’s announcement of two factories with a modest monthly production capacity raises doubts regarding achieving gigafab-scale operations. The reported challenges faced by the Arizona facilities are adding to the uncertainty surrounding the realization of the six-phase expansion project. Rising factory issues have prompted TSMC to consider Japan as a viable overseas production base, suggesting potential shifts in the company’s long-term strategic plans.
TSMC’s expansion into Arizona marked a significant step toward strengthening the U.S. semiconductor industry and diversifying the chip supply chain. While the project aimed to create job opportunities for Americans and reduce reliance on foreign manufacturers, the involvement of Taiwanese talent has played a critical role. However, challenges in achieving the intended scale of operations and rising factory issues pose potential hurdles.
As the semiconductor landscape continues to evolve, balancing international talent collaboration and fostering domestic expertise will be key to realizing the desired goals of job creation, supply chain resilience, and sustainable technological advancements in the United States.