Well I think the U.S. chip bans actually benefit TSMC, along with the Chips Act. But it also paints even more of a target on Taiwan's back for China's expansionist tendencies.
As to whether they had a choice I cannot speculate. I presume they make decisions based on business outcomes.
Semiconductors are not a natural resource you can start processing again after the devastation of war. If there is an invasion there will be no need to sabotage the plants, the process will stop and it won't come back online.
Not so fast, white boys! A friend, a director-level employee with an engineering background who has worked with multiple multinational companies in various capacities, but has been primarily based in the US sees it this way: "American manufacturing moved to China not because of dumb labor, but because you could hire high IQ people for dirt cheap. If your machine broke down, no problem; some Chinese guy (with basically a masters in EE) would pull out the circuit boards and using probes and other instrumentation determine what board needed replacing and he would work annually for a fraction of the salary of his equivalent in the US.
Manufacturing in the US is a nightmare: at our US facility our only requirement for a assembler was a high school degree, US citizenship, passing a drug and criminal background check and then passing a simple assembly test: looking at an assembly engineering drawing and then putting the components together. The vast majority of Americans were unable to complete the assembly test, while for our facility in China they completed it in half the time and 100% of the applicants passed. An assembler position in the US would average maybe 30 interviews a day and get 29 rejections, not to mention all the HR hassles of assemblers walking off shift, excessive lateness, stealing from work, slow work speed and poor attitudes.
The product line is highly specialized equipment, so it makes no sense to fully automate it, most of the components are assembled by hand and for certain steps we use custom engineered jigs. And for those saying that the position wasn't paying enough, it paid $12 an hour starting in an area with an extremely low cost of living where property taxes for a 2000 square foot house would be $800-$1000 a year. Assemblers don’t make $150K. An assembler takes parts and puts them together. The position starts at $12 an hour in flyover country which is pretty reasonable compared to other jobs that only require a GED and no prior work experience. Offers medical, dental and annual raises with plenty of opportunity to move up in the company. The national average salary for a Production Assembler is $33,029 in United States, which is what you would be making if you stayed for 5+ years.
Finding an American worker capable of passing these simple requirements and passing the assembly test is merely impossible nevermind being competent, punctual and of good moral character (not stealing from company or starting conflicts with coworkers). And these are the main groups that apply for this position. The same exact product line has the same facility in China, and the same positions in China pays the same wages as other positions there with only a high school degree and no work experience. Yet the applicant quality is much higher, and this applies as well to the white collar professions that support the manufacturing: schedulers, quality inspectors, equipment testers and calibrators, engineers, supply chain managers, account managers, sales etc....their labor quality is simply higher. I suspect the blacks and Hispanics are probably too dumb to get affirmative action too dumb to go to college, so they probably average 75 IQ and their Chinese equivalents are probably 95 but the performance gap is massive.
This is bullshit. Semiconductor fabs have been operating in the US for decades using mostly domestic labor. That is exactly what will happen at TSMC US.
Harsh grades for US workers. Both parents working could maybe make it on those wages. It would meet median US household income. How were the chinese trained to always and quickly pass the test? Surely there could something done to help the Americans become proficient. I never give up on people.
This could be one of the best pieces I’ve read this year. Read lots of stuff. Lots. A lot more than a story but not a treatise. I learned from the piece and the comments. You recognized and captured the words of a gentle, wise, experienced, foreward thinking and very powerful man. We will see his strategic use of the plant soon i hope.
I am one of the very few who meet Morris Chang when he arrived in Taiwan, I had a chance meeting at a coffee shop in a Taipei hotel, and I was finishing up my Mandarin Chinese Language studies at National Taiwan Normal University, Mandarin Training Center; Taiwan is a remarkable place, and so is Morris! I think I was 25 at the time!
Globalization is not dead. What is dead or on the mends is the cost advantage part of drivers of free trade. Globalization will be dead when the market access parts goes away.....when countries insist on self-sufficient where US companies lose global markets or other foreign companies lose US markets. If that happens, most economies will collapse.
Globalization is not dead, what's happening is just competitive maneuvering
The recognition during the Trump administration that CN was using US technology and market access to sell, while denying fair trade in return, led to the first retaliation by the US.
COVID restrictions staggered the world economy and led to more concern about mercantilism and risks with the global supply chain.
The perceived weakness of leadership in the Biden administration influenced the Putin decision to invade and the Xi decision to support the invader.
The unified global supply chain is now a fast fading memory. Materiel of war flows in regional chains between allies. Dual use technologies will continue to be separated and controlled. And simple consumer products will be the last items to be reshored or ally shored.
CN moves to ensure it's food supply with South America, ensure it's raw material supplies with Africa, and it's energy supplies with Russia and Saudi Arabia. Political efforts to reduce dependency on the dollar within new trading arrangements are necessary to break US hegemony.
All businesses must react to these changes or perish as others react and take advantage of the shift.
This chip factory in the US will probably never get off the ground because the Biden regime will force affirmative action hiring policies on it. You can't run a profitable company when you are forced to babysit a large portion of your employees.
The diversification of TSMC in the U S. Likely puts Taiwan in more danger of a forced invasion.
Do you think TSMC has an alternative, given the geopolitical climate they are walking into?
Well I think the U.S. chip bans actually benefit TSMC, along with the Chips Act. But it also paints even more of a target on Taiwan's back for China's expansionist tendencies.
As to whether they had a choice I cannot speculate. I presume they make decisions based on business outcomes.
If China threatens to invade Taiwan, they should blow up their entire semiconductor industry and destroy all the equipment
This is great and going into my What I'm Reading List this week. Thank you for a top read and a copy of a speech I otherwise would not have seen.
Semiconductors are not a natural resource you can start processing again after the devastation of war. If there is an invasion there will be no need to sabotage the plants, the process will stop and it won't come back online.
Not so fast, white boys! A friend, a director-level employee with an engineering background who has worked with multiple multinational companies in various capacities, but has been primarily based in the US sees it this way: "American manufacturing moved to China not because of dumb labor, but because you could hire high IQ people for dirt cheap. If your machine broke down, no problem; some Chinese guy (with basically a masters in EE) would pull out the circuit boards and using probes and other instrumentation determine what board needed replacing and he would work annually for a fraction of the salary of his equivalent in the US.
Manufacturing in the US is a nightmare: at our US facility our only requirement for a assembler was a high school degree, US citizenship, passing a drug and criminal background check and then passing a simple assembly test: looking at an assembly engineering drawing and then putting the components together. The vast majority of Americans were unable to complete the assembly test, while for our facility in China they completed it in half the time and 100% of the applicants passed. An assembler position in the US would average maybe 30 interviews a day and get 29 rejections, not to mention all the HR hassles of assemblers walking off shift, excessive lateness, stealing from work, slow work speed and poor attitudes.
The product line is highly specialized equipment, so it makes no sense to fully automate it, most of the components are assembled by hand and for certain steps we use custom engineered jigs. And for those saying that the position wasn't paying enough, it paid $12 an hour starting in an area with an extremely low cost of living where property taxes for a 2000 square foot house would be $800-$1000 a year. Assemblers don’t make $150K. An assembler takes parts and puts them together. The position starts at $12 an hour in flyover country which is pretty reasonable compared to other jobs that only require a GED and no prior work experience. Offers medical, dental and annual raises with plenty of opportunity to move up in the company. The national average salary for a Production Assembler is $33,029 in United States, which is what you would be making if you stayed for 5+ years.
Finding an American worker capable of passing these simple requirements and passing the assembly test is merely impossible nevermind being competent, punctual and of good moral character (not stealing from company or starting conflicts with coworkers). And these are the main groups that apply for this position. The same exact product line has the same facility in China, and the same positions in China pays the same wages as other positions there with only a high school degree and no work experience. Yet the applicant quality is much higher, and this applies as well to the white collar professions that support the manufacturing: schedulers, quality inspectors, equipment testers and calibrators, engineers, supply chain managers, account managers, sales etc....their labor quality is simply higher. I suspect the blacks and Hispanics are probably too dumb to get affirmative action too dumb to go to college, so they probably average 75 IQ and their Chinese equivalents are probably 95 but the performance gap is massive.
This is bullshit. Semiconductor fabs have been operating in the US for decades using mostly domestic labor. That is exactly what will happen at TSMC US.
That is wildly racist, and you are a shite human.
Harsh grades for US workers. Both parents working could maybe make it on those wages. It would meet median US household income. How were the chinese trained to always and quickly pass the test? Surely there could something done to help the Americans become proficient. I never give up on people.
US and European “globalization” is DEAD.
We now have NEW NORMAL of NON-US/European globalization.
US/Euro are welcome to participate, but we’ll be perfectly fine WITHOUT US/Europe.
I was quoting Morris Chang, the founder-Chairman of TSMC. He's been working on it in AZ for three years and is very pessimistic.
Watch David Byrne's movie, 'True Stories'.
This could be one of the best pieces I’ve read this year. Read lots of stuff. Lots. A lot more than a story but not a treatise. I learned from the piece and the comments. You recognized and captured the words of a gentle, wise, experienced, foreward thinking and very powerful man. We will see his strategic use of the plant soon i hope.
I am one of the very few who meet Morris Chang when he arrived in Taiwan, I had a chance meeting at a coffee shop in a Taipei hotel, and I was finishing up my Mandarin Chinese Language studies at National Taiwan Normal University, Mandarin Training Center; Taiwan is a remarkable place, and so is Morris! I think I was 25 at the time!
regards,
Karl Weaver 魏卡爾
Globalization is not dead. What is dead or on the mends is the cost advantage part of drivers of free trade. Globalization will be dead when the market access parts goes away.....when countries insist on self-sufficient where US companies lose global markets or other foreign companies lose US markets. If that happens, most economies will collapse.
Globalization is not dead, what's happening is just competitive maneuvering
The recognition during the Trump administration that CN was using US technology and market access to sell, while denying fair trade in return, led to the first retaliation by the US.
COVID restrictions staggered the world economy and led to more concern about mercantilism and risks with the global supply chain.
The perceived weakness of leadership in the Biden administration influenced the Putin decision to invade and the Xi decision to support the invader.
The unified global supply chain is now a fast fading memory. Materiel of war flows in regional chains between allies. Dual use technologies will continue to be separated and controlled. And simple consumer products will be the last items to be reshored or ally shored.
CN moves to ensure it's food supply with South America, ensure it's raw material supplies with Africa, and it's energy supplies with Russia and Saudi Arabia. Political efforts to reduce dependency on the dollar within new trading arrangements are necessary to break US hegemony.
All businesses must react to these changes or perish as others react and take advantage of the shift.
This chip factory in the US will probably never get off the ground because the Biden regime will force affirmative action hiring policies on it. You can't run a profitable company when you are forced to babysit a large portion of your employees.
Got a link to the original speech?