I think it's hard to overstate the issues that stem from a workforce who cannot all speak the same language. In my experience it's an absolute showstopper for creating an effective organisation.
Add language barriers to solving very hard technical problems and you're going to have slow progress.
To be clear I am talking about just about language and not the cultural differences other comments are talking about.
This can easily become an economy-wide problem. Canada is an example of this, and it has certainly harmed the country's overall productivity.
Language has long posed a challenge for organizations in Canada with operations and customers in both the English-speaking and the French-speaking regions of the country. These days, though, that has become a comparatively minor issue to deal with.
Severely flawed immigration policies have very quickly brought in a huge number of people who don't know English well, and who also don't know French well, too. In effect, these people don't really fit in linguistically anywhere across the country.
As this third group has gotten larger, especially over the last decade, unnecessary friction has been introduced into even the most basic of interactions, for pretty much all of the participants involved.
In the major cities, for example, it's not uncommon to watch one customer after another with limited English and/or French skills have trouble interacting with a cashier who also has limited English and/or French skills.
Native English and French speakers are left in a position of constantly being unsure if they were properly understood, too.
Miscommunication, misunderstanding, and mistakes have become far more common than they were even as recently as the 1990s and early 2000s. Lots of time, money, effort, and resources are frequently wasted thanks to this.
Canada's productivity has certainly taken an unnecessary hit due to language issues.
I agree with you. Having said that, TSMC’s ramp in Japan has gone much more smoothly than in Arizona, which indicates that all the issues can’t be attributed to language barriers. There is a work ethic/culture delta as well.
> The loss of Taiwan and with it TSMC — the thinking goes — would result in a global tech meltdown.
The irony is that for most of the tech industry TSMC is unavailable. Nvidia, Apple and AMD have booked all the manufacturing slots for the foreseeable future. It's been this way since 2020.
Yes, their loss would have a huge effect, but many are having to cope with that situation today.
> Yes, their loss would have a huge effect, but many are having to cope with that situation today.
I suspect they'd be in much worse shape if Taiwan were invaded.
First, they'd find themselves competing with current TSMC customers for the non-TSMC foundries.
And second, an invasion of Taiwan could lead to a full out war with China, which might mean the non-Taiwanese fabs have their production priorities overridden by the warring governments.
Unless the date in the comment is wrong and I missed some important update in 2024, this statement is not correct. Apple Books a chunk of the latest tech for a period of many months every now and then but there is a long tail of companies using TSMC for shorter projects and for using earlier tech.
In my experience, U.S. citizens are not likely to sacrifice their bodies and life to an entity that can cut them off at will. That sort of dedication comes at an extremely high premium in the us.
Honestly, it is just business. The companies need to adapt and stop complaining.
They are adapting by getting subsidies from the US government, which implies that US based manufacturing will never be cost effective. When the money flow turns off, these fabs might fade away.
So the article is suggesting it comes down to this:
That Taiwainese workers will work 16 hour days and weekends.
That's true and probably won't happen in America with American workers.
But, before we just take that one factoid and call it settled, I'd love to understand what the ROI would be on a plant that just hired twice as many workers. My impression is that the margins on these chips are 100-1000x.
It sounds like much of the problem is not time spent working, but cultural friction. The American's expect a work environment similar to in American companies, while the Taiwanese (both management and others) expect Taiwanese standards, and neither side wants to back down. This will cause both sides to have something resembling racist feelings towards the other group.
And when there isn't even a shared language that all can use (and are willing to use), it doubles the problem and introduces a lot of inefficiency.
English is generally the current Lingua Franca, but TSMC employees appear to be either to proud of their language or improperly selected for language mastery to be willing or able to switch. And finding enough staff able to work using mostly Mandarin is probably even more unrealistic.
TSMC will probably overcome all of these issues, if the motivation is there. It's just that things will move a bit more slowly than expected until the culture issues settle down.
"Gross margin for the quarter was 53.1%, operating margin was 42.0%, and net profit margin was 38.0%"
(and of course if the factory isn't operating, its margins are zero!)
No, this is an expertise problem, and I suspect that like a lot of software projects it would get worse with more people because the vast majority of the problem is addressing specific details that require the knowledge of particular individuals. It's not like you can materialize IC factory engineers from anywhere as if they were Uber drivers, either.
In my experience 40 hours plus 40 hours does not equal 80 hours in the office. Someone working twice as long is just able to accomplish a ton more than two people working 40 hours because theres less collaboration friction.
Is it even realistic to expect US fabs to be competitive? I think this article sheds insight into why the US based semiconductor companies like Intel are falling behind.
TSMC has had brilliant success, but this kind of work culture tends to negatively affect creativity and agility. TSMC seems to have found some way to either avoid that or compensate for it, possibly by having the ability to hire only the top technical talent in the territory/country.
And moving forward, people are starting to realize the risk of having TSMC manufacture everything in Taiwan, given how little competition they have. If TSMC wouldn't start to move some of their production abroad, they would risk facing import restrictions to western countries or (as already happened) government subsidies to local fabs.
To retain their market share, they were probably forced to set up some fabs abroad.
In the end, I think it's really good for those new countries to have TSMC set up fabs in their countries, both since it guarantees that some production stays available in the case of a war, but also because the TSMC workers will gradually naturalize in the US or Europe and start to work for companies like Intel or ASML and contribute to crosspollination of ideas abilities.
Short term though, cultural conflicts is exactly what one would expect. It's probably very similar to what Western companies experienced when first setting up shops in China or India.
In the beginning Western managers would try to have the locals behave like Western employees when it came to initiative and willingness to "say it as it is" when managers were giving impossible orders.
Over time many would learn that finding really good local managers able to bridge the east/west culture gap could be really helpful.
I'm guessing TSMC will need to do the same thing. Find Western managers (for instance second generation Asians) able to understand both cultures, so they can deal with local employees the way they're used to while also able to work productively with upper management (who would presumably still be Taiwanese).
>Is it even realistic to expect US fabs to be competitive?
The United States invented and has historically dominated semiconductors until the last decade or so, so yes.
The problem here is two-fold: Financial misincentives, and the fact anyone who achieves #1 in anything will always fall from grace eventually and often disasterously.
It also doesn't help that the Chinese/Taiwanese are very shrewd people compared to Americans who are... lazy, to say the least. I say that as an American.
> The American engineers complained of rigid, counterproductive hierarchies at the company; Taiwanese TSMC veterans described their American counterparts as lacking the kind of dedication and obedience they believe to be the foundation of their company’s world-leading success.
I mean, some humility is in order. TSMC are succeeding because of these things, not in spite of them. Given the supposed need for expedience it's best to copy that as-is and then you can tweak it once it's up and running.
This shouldn't surprise anyone here because we've seen it happen time and time again with Silicon Valley. The urban infrastructure in the Bay Area is truly awful. The cost-of-living is out-of-control. There has been many attempts to recreate SV elsewhere [1] and while there has been some success, nothing has rivalled the original.
So people are in the Bay Area because people are in the Bay Area and that's hard to transplant or reproduce because a startup in Ohio will ultimately have better access to capital, people and an entire ecosystem by relocating to SV.
A lot of Chinese (and Taiwanese) companies now benefit from a culture they've created. Additionally there are supply issues. Factories in Shenzhen or Guanghzhou or Taiwan can now get all the supplies they need from all the factories that exist in that area. There's no cultural or language barrier with suppliers and the rest of the company.
It is going to be extremely difficult and require sustained dedication to recreate chip manufacturing somewhere other than Taiwan, China, Japan or South Korea. Those places have decades of experience at this point and (now) an ecosystem advantage.
"How did we get here?" is an interesting question because Taiwan's chip dominance was largely created by US manufacturers repeatedly seeking short-term cost-cutting. Dell (for example) would start assembling PCs in Taiwan to save on labor costs. And then they'd make PCB boards to save costs. And then they'd produce the RAM and storage there. Ultimately the entire PC was made there and suddenly they've created Asus and have funded every step of its development.
The difference is the massive strategic importance of not having such a reliance on a single location that your primary rival is claiming the right to take by force at any time.
Think of fabs as having similar advantages to being distributed as do data centers. Imagine the added cost and latency if every data center on Earth was located around SF?
Why bring DEI into this? Is there any factual information that DEI is the reason why the build out failed to meet expectations?
Or is it more likely that TSMC is building a highly specialized factory and is used to working with Taiwanese contractors who already have the skills, equipment, and training? Even more likely that their estimates and schedules are all built around prior experience in Taiwan and thus those estimates and planning all failed to account for the scale of challenges in dealing with an entirely different labor market.
I see no reason why DEI is even brought into this discussion.
Lmao how did you turn this into a political issue? Intel loves Israel and Poland because of labor costs and regulatory framework. If DEI (the largely overstated and mysterious hiring policy that mostly doesn't exist in the way you think it does) is even a feature of Intels corporate culture it would still be implemented in Israel and Poland.
It has nothing to do with DEI. There's just a self serving political lie. Even the examples in the article make no sense, ok, some government agency is going to have a DEI officer, so what?
TSMC famously treats its workers like trash. I've seen it up close when my students would join and report back about how terrible the environment is. You should see what the leadership team has to say about how workers should behave. US workers don't want to put up with it so they're having a lot of difficulty finding people.
I'm sorry, but this is one of the most poorly written articles I've ever read. It feels like someone had a word limit to hit. I feel like I've read the same three sentences paraphrased a million times in the article.
Let me save you some time:
- TSMC's USA plant is delayed a year (this is apparently "woefully delayed" ?)
- There is apparently a language barrier between TSMC Taiwan and TSMC USA workers.
- Repeated references to a "strict hierarchy", but no details beyond that.
[+] [-] badcppdev|1 year ago|reply
Add language barriers to solving very hard technical problems and you're going to have slow progress.
To be clear I am talking about just about language and not the cultural differences other comments are talking about.
[+] [-] VancouverMan|1 year ago|reply
Language has long posed a challenge for organizations in Canada with operations and customers in both the English-speaking and the French-speaking regions of the country. These days, though, that has become a comparatively minor issue to deal with.
Severely flawed immigration policies have very quickly brought in a huge number of people who don't know English well, and who also don't know French well, too. In effect, these people don't really fit in linguistically anywhere across the country.
As this third group has gotten larger, especially over the last decade, unnecessary friction has been introduced into even the most basic of interactions, for pretty much all of the participants involved.
In the major cities, for example, it's not uncommon to watch one customer after another with limited English and/or French skills have trouble interacting with a cashier who also has limited English and/or French skills.
Native English and French speakers are left in a position of constantly being unsure if they were properly understood, too.
Miscommunication, misunderstanding, and mistakes have become far more common than they were even as recently as the 1990s and early 2000s. Lots of time, money, effort, and resources are frequently wasted thanks to this.
Canada's productivity has certainly taken an unnecessary hit due to language issues.
[+] [-] osnium123|1 year ago|reply
[+] [-] weebull|1 year ago|reply
The irony is that for most of the tech industry TSMC is unavailable. Nvidia, Apple and AMD have booked all the manufacturing slots for the foreseeable future. It's been this way since 2020.
Yes, their loss would have a huge effect, but many are having to cope with that situation today.
[+] [-] CoastalCoder|1 year ago|reply
I suspect they'd be in much worse shape if Taiwan were invaded.
First, they'd find themselves competing with current TSMC customers for the non-TSMC foundries.
And second, an invasion of Taiwan could lead to a full out war with China, which might mean the non-Taiwanese fabs have their production priorities overridden by the warring governments.
[+] [-] pama|1 year ago|reply
[+] [-] HDThoreaun|1 year ago|reply
[+] [-] pylua|1 year ago|reply
Honestly, it is just business. The companies need to adapt and stop complaining.
[+] [-] osnium123|1 year ago|reply
[+] [-] pjc50|1 year ago|reply
[+] [-] zug_zug|1 year ago|reply
That Taiwainese workers will work 16 hour days and weekends.
That's true and probably won't happen in America with American workers.
But, before we just take that one factoid and call it settled, I'd love to understand what the ROI would be on a plant that just hired twice as many workers. My impression is that the margins on these chips are 100-1000x.
[+] [-] trashtester|1 year ago|reply
And when there isn't even a shared language that all can use (and are willing to use), it doubles the problem and introduces a lot of inefficiency.
English is generally the current Lingua Franca, but TSMC employees appear to be either to proud of their language or improperly selected for language mastery to be willing or able to switch. And finding enough staff able to work using mostly Mandarin is probably even more unrealistic.
TSMC will probably overcome all of these issues, if the motivation is there. It's just that things will move a bit more slowly than expected until the culture issues settle down.
[+] [-] pjc50|1 year ago|reply
That would be false; you can read the margins off the report: https://pr.tsmc.com/english/news/3131
"Gross margin for the quarter was 53.1%, operating margin was 42.0%, and net profit margin was 38.0%"
(and of course if the factory isn't operating, its margins are zero!)
No, this is an expertise problem, and I suspect that like a lot of software projects it would get worse with more people because the vast majority of the problem is addressing specific details that require the knowledge of particular individuals. It's not like you can materialize IC factory engineers from anywhere as if they were Uber drivers, either.
[+] [-] bevekspldnw|1 year ago|reply
[+] [-] HDThoreaun|1 year ago|reply
[+] [-] smallnamespace|1 year ago|reply
[+] [-] osnium123|1 year ago|reply
[+] [-] trashtester|1 year ago|reply
And moving forward, people are starting to realize the risk of having TSMC manufacture everything in Taiwan, given how little competition they have. If TSMC wouldn't start to move some of their production abroad, they would risk facing import restrictions to western countries or (as already happened) government subsidies to local fabs.
To retain their market share, they were probably forced to set up some fabs abroad.
In the end, I think it's really good for those new countries to have TSMC set up fabs in their countries, both since it guarantees that some production stays available in the case of a war, but also because the TSMC workers will gradually naturalize in the US or Europe and start to work for companies like Intel or ASML and contribute to crosspollination of ideas abilities.
Short term though, cultural conflicts is exactly what one would expect. It's probably very similar to what Western companies experienced when first setting up shops in China or India.
In the beginning Western managers would try to have the locals behave like Western employees when it came to initiative and willingness to "say it as it is" when managers were giving impossible orders.
Over time many would learn that finding really good local managers able to bridge the east/west culture gap could be really helpful.
I'm guessing TSMC will need to do the same thing. Find Western managers (for instance second generation Asians) able to understand both cultures, so they can deal with local employees the way they're used to while also able to work productively with upper management (who would presumably still be Taiwanese).
[+] [-] Dalewyn|1 year ago|reply
The United States invented and has historically dominated semiconductors until the last decade or so, so yes.
The problem here is two-fold: Financial misincentives, and the fact anyone who achieves #1 in anything will always fall from grace eventually and often disasterously.
It also doesn't help that the Chinese/Taiwanese are very shrewd people compared to Americans who are... lazy, to say the least. I say that as an American.
[+] [-] Workaccount2|1 year ago|reply
[+] [-] fidotron|1 year ago|reply
> The American engineers complained of rigid, counterproductive hierarchies at the company; Taiwanese TSMC veterans described their American counterparts as lacking the kind of dedication and obedience they believe to be the foundation of their company’s world-leading success.
I mean, some humility is in order. TSMC are succeeding because of these things, not in spite of them. Given the supposed need for expedience it's best to copy that as-is and then you can tweak it once it's up and running.
[+] [-] jmyeet|1 year ago|reply
So people are in the Bay Area because people are in the Bay Area and that's hard to transplant or reproduce because a startup in Ohio will ultimately have better access to capital, people and an entire ecosystem by relocating to SV.
A lot of Chinese (and Taiwanese) companies now benefit from a culture they've created. Additionally there are supply issues. Factories in Shenzhen or Guanghzhou or Taiwan can now get all the supplies they need from all the factories that exist in that area. There's no cultural or language barrier with suppliers and the rest of the company.
It is going to be extremely difficult and require sustained dedication to recreate chip manufacturing somewhere other than Taiwan, China, Japan or South Korea. Those places have decades of experience at this point and (now) an ecosystem advantage.
"How did we get here?" is an interesting question because Taiwan's chip dominance was largely created by US manufacturers repeatedly seeking short-term cost-cutting. Dell (for example) would start assembling PCs in Taiwan to save on labor costs. And then they'd make PCB boards to save costs. And then they'd produce the RAM and storage there. Ultimately the entire PC was made there and suddenly they've created Asus and have funded every step of its development.
[1]: https://en.wikipedia.org/wiki/List_of_technology_centers#Pla...
[+] [-] trashtester|1 year ago|reply
Think of fabs as having similar advantages to being distributed as do data centers. Imagine the added cost and latency if every data center on Earth was located around SF?
[+] [-] joshhansen|1 year ago|reply
Another miscalculation: undervaluing the ability to speak the same language.
Any organization except the U.N. should have a single working language and require everyone to use it exclusively.
Hell, I even think that English proficiency should be a prerequisite for immigration to the U.S., or at least for citizenship.
[+] [-] cbm-vic-20|1 year ago|reply
[+] [-] doomleika|1 year ago|reply
[deleted]
[+] [-] raymond_goo|1 year ago|reply
[deleted]
[+] [-] CharlieDigital|1 year ago|reply
Or is it more likely that TSMC is building a highly specialized factory and is used to working with Taiwanese contractors who already have the skills, equipment, and training? Even more likely that their estimates and schedules are all built around prior experience in Taiwan and thus those estimates and planning all failed to account for the scale of challenges in dealing with an entirely different labor market.
I see no reason why DEI is even brought into this discussion.
[+] [-] doug_durham|1 year ago|reply
[+] [-] TechDebtDevin|1 year ago|reply
[+] [-] mhb|1 year ago|reply
[deleted]
[+] [-] Jerrrry|1 year ago|reply
they are even queuing themselves up in distinct routes based on race and national security concerns.
this is what real politik looks like in modernity.
[+] [-] light_hue_1|1 year ago|reply
TSMC famously treats its workers like trash. I've seen it up close when my students would join and report back about how terrible the environment is. You should see what the leadership team has to say about how workers should behave. US workers don't want to put up with it so they're having a lot of difficulty finding people.
[+] [-] jszymborski|1 year ago|reply
Let me save you some time:
- TSMC's USA plant is delayed a year (this is apparently "woefully delayed" ?)
- There is apparently a language barrier between TSMC Taiwan and TSMC USA workers.
- Repeated references to a "strict hierarchy", but no details beyond that.
What a stinker of an article.
[+] [-] 7373737373|1 year ago|reply
Not that this is the same class of problem, but still.