US realities are hindering the creation of TSMC production in Arizona: cultural barriers and infrastructure problems

In May 2020, the Taiwanese company TSMC announced its intention to build a plant in Arizona for the contract production of chips using fairly advanced lithographic technologies. Over time, the project has grown to three enterprises, the first of which is already ready, but even after the start of production, the company will have to face serious localization problems.

Image Source: TSMC

TSMC expects to invest a total of $65 billion in the construction and equipment of three enterprises in Arizona; the American authorities are so far ready to provide subsidies in the amount of $6.6 billion under the so-called “Chip Law.” The company more than once had to face serious problems during the implementation of this project, including both the underdeveloped local infrastructure in Arizona and cultural contradictions between American and Taiwanese employees.

In Taiwan, it is common for TSMC specialists to work overtime and perform duties not covered by their job description in order to achieve some urgent goal. American trainees who went to Taiwan to prepare for further work at TSMC facilities in Arizona had a difficult time at first. Not everyone completed the 18 months required by the training program and chose to return to the United States ahead of schedule. As Richard Liu, head of TSMC’s US office for human resources and public relations, admitted, “We constantly remind ourselves that existing success in Taiwan does not guarantee the transfer of existing practices here.” The company also had to reduce the number of meetings at the Arizona plant during its construction because American employees objected to holding too many “useless meetings.”

The first TSMC plant in Arizona, however, has already been built and is even carrying out trial production of products, but it will not become widespread until the next six months, with a delay relative to the original deadlines. About half of the 2,200 employees working on the Arizona plant were brought to Arizona from Taiwan, but since the company expects to create about 6,000 jobs after all three plants are built, the company plans to fill the vacancies primarily from local residents. TSMC is not ready to rely on employees sent from Taiwan on a permanent basis, as management admitted.

To train personnel, active work is carried out with American universities, and TSMC’s own educational programs in the region are financed. Students are even offered a taste of future working conditions by wearing the protective suits and masks that clean room workers must wear throughout their entire shift. The training centers used by TSMC replicate the environment of such facilities. About 1,000 applicants have already completed the two-week training course. Representatives of one of the universities in Arizona said: “We are becoming a Silicon Desert.”