Thread by @andymok

1/11 Deeply reported piece by @NikkeiAsia on challenges facing TSMC in Arizona and why its semiconductor fab there may end up a costly disappointment. Key points 👇👇👇

asia.nikkei.com/Business/Busin…

2/11 Construction costs and delays: Simply finding enough workers to build the facilities has already proved a challenge…and Arizona — where summer temperatures average 38 C — has always struggled to recruit construction workers in sufficient numbers.

3/11 TSMC originally planned to start moving chip production equipment into its facility by around September this year but has told suppliers this will be pushed back to the first quarter of 2023 due to construction delays

4/11 Hiring engineers and technicians: TSMC is competing with Intel directly, which has deep and longstanding ties to schools like Arizona State University

5/11 ASU has supplied more students to Intel than any other university, and the U.S. chip giant is the No. 1 employer of the engineering school’s students.
The Schools of Engineering at ASU is the largest engineering school in the U.S., with nearly 27,000 students enrolled.

6/11 In addition to wooing engineers, semiconductor makers in Arizona are even more desperate for the technicians needed to staff the plants around the clock in order to ensure production runs smoothly.

7/11 “For every engineering degree they have on staff … they probably need four to six technicians to come along,”

8/11 TSMC offers starting salaries of $67K in Taiwan, which is considered attractive. But it pays $118K in Arizona while Intel offers $128K.

Meanwhile avg software engineering salaries in 2021 were $156K w/many Silicon Valley tech giants competing for those TSMC hopes to hire

9/11 US salary costs compel companies like Qualcomm, NVidia, etc to shift operations to Asia.

TSMC is surrendering an important cost advantage by locating in US.

10/11 Culture differences may hobble TSMC operations since the company is notorious for its long working hours, strict management and emphasis on discipline and hierarchy.

Differences also are a ticking time bomb as regulatory and legal problems appear inevitable.

11/11 While problems facing TSMC in Arizona are daunting they are magnified for its suppliers. And without a robust ecosystem TSMC is unlikely to sustain its leadership position

And so, the risks of TSMC’s US initiative turning into a costly disappointment appears significant