Building Arizona Factory Under US Pressure... TSMC Faces Workforce Recruitment Challenges

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Taiwan's TSMC, the world's number one semiconductor foundry (contract manufacturing) company, is reportedly facing difficulties in securing manpower for the construction of its new plant in Arizona, USA. Despite deciding to build a $12 billion (approximately 15 trillion KRW) advanced semiconductor factory under pressure from the U.S. government, the company is confronted with challenges in manpower acquisition and labor cost burdens, as pointed out by founder Morris Chang.

According to Japan's Nihon Keizai Shimbun on the 7th, TSMC decided to invest in a new U.S. plant in 2020, began construction of the Arizona plant last year, and is aiming to start operations in 2024. Originally, TSMC planned to bring manufacturing equipment into the plant by September this year, but there is a possibility that this schedule will be postponed to early 2023.

The delay in TSMC's plant construction schedule is due to difficulties in securing manpower. Primarily, it is not easy to secure construction workers. The U.S. unemployment rate is currently 3.6%, similar to February 2020, which was the lowest in half a century since December 1969. Amid labor shortages, finding construction workers in Arizona, where the average summer temperature reaches 38 degrees Celsius, has become even more difficult.

A bigger problem is that it is not easy to secure semiconductor engineers and technicians immediately. Among U.S. technical workers, semiconductor manufacturing is not as popular a workplace compared to leading IT companies in Silicon Valley. U.S. semiconductor companies have long outsourced manufacturing to Asia, leading to voices saying that even the concept of a semiconductor engineer needs explanation within the U.S.

Especially, with U.S. semiconductor company Intel building a plant about 80 km from TSMC's new plant in Arizona, there is competition for manpower, and currently, TSMC is at a disadvantage, Nihon Keizai reported. Intel has been established in Arizona since 1980 but has faced difficulties in securing manpower and has formed close relationships with local universities such as Arizona State University (ASU) to attract many engineering students.

TSMC is also looking for ways to supply manpower through connections with universities. A representative from ASU's engineering department said that they often see TSMC recruiters and that negotiations are underway to cooperate with the university on research, manpower development, and extensive training programs.

Besides semiconductor engineers, securing technicians who can work in shifts to match the 24-hour operation system of semiconductor plants is also important. TSMC is participating in technician training programs created by local technical colleges in collaboration with semiconductor companies to raise TSMC's recognition. Although TSMC is the largest company in Taiwan, its recognition in the U.S. is low, and salaries are lower compared to Silicon Valley and other areas.

Nihon Keizai pointed out that TSMC also needs to address cultural reputation issues locally, such as long working hours, strict management, and discipline. A representative from a local semiconductor manufacturing equipment company said, "I have been stationed at factories like Intel, Micron, and TSMC, but TSMC was the strictest," adding, "Many American trainees experienced culture shock and even left the training."

This situation aligns with the skeptical view expressed earlier by founder Morris Chang regarding the U.S. semiconductor sector development policy. In April, Chang appeared on a podcast by the U.S. think tank Brookings Institution and pointed out that the abundant manufacturing talent in the U.S. in the past moved to high-paying finance and consulting industries in the 1970s and 1980s, which was not bad for the U.S. but posed challenges for semiconductor manufacturing. He added that to develop the U.S. semiconductor industry, the serious shortage of manufacturing personnel must be resolved first.

This content was produced with the assistance of AI translation services.