From the New York Times, August 8:
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.
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.
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 repeatedly pushed back the plant’s start date, now says it doesn’t expect to begin chip production in Arizona until 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....
