Culture Clash at TSMC’s Arizona Fab

Article By : Alan Patterson

Will management and workers find a middle ground as the chip giant's newest U.S. fab ramps production?

Taiwan Semiconductor Manufacturing Co. (TSMC) faces challenges managing employees at its new fab in Arizona who are unaccustomed to the long work hours and management culture that in Taiwan have helped make the company the world’s largest chip foundry.

“The work culture in Taiwan is really different than in the U.S.,” said a person identified as a TSMC Arizona fab equipment engineer on Glassdoor, a website where current and former employees anonymously review companies. “TSMC will have to change to an eight-hour work day five days a week.”

To maximize profits, fab operators need to keep expensive and highly sensitive capital equipment running 24/7. To help prevent production halts resulting in billions of dollars of losses and scrapped silicon wafers, production engineers must monitor and tweak their equipment constantly. TSMC engineers remain on-call after ordinary working hours in the event of an emergency.

“The reality for people from Taiwan is that they are doing even more than 12-hour days often,” said the American engineer on Glassdoor. “There’s also the night shifts and weekend shifts on duty and/or on call.”

TSMC should expand its workforce so employees can work reasonable hours each day and still enjoy good benefits, according to the employee who has been with the company for about a year. “I think TSMC might at least approach this in Arizona as it has to compete to retain and attract talent against companies like Intel right across the street.”

TSMC is in the midst a hiring spree as the demand for chips soars.

“We are increasing the number of employees big time,” said TSMC spokesperson Nina Gao. In 2020, the company hired about 8,000 workers, or more than 10 percent of the total headcount of 60,000. In 2021, the company hired a similar number, she added.

Face time

Long meetings at TSMC are another frustration for the American engineer who posted on Glassdoor. “These meetings add up to three hours in a day easily,” said the new recruit. “That’s a lot of the work day. Some of the solution may be in software. Most of these meetings could be automated. The engineer who last worked with the equipment would record tool status and changes and make recommendations” to the next shift.

A senior TSMC engineer largely agreed. The principal engineer spoke with EE Timesanonymously because he is not authorized to speak on behalf of the company.

“I think some software may be modified so that it is more in line with the Americans’ habits. It’s too old,” he said.

“Our analysis software has been passed down since the establishment of the company [in 1987]. There may have been some slight improvements in the software along the way, but the interface remains almost the same.

“Everyone is happy with it” the engineer added. “It’s easy to use. You can get the information you want. There may be other software, but the results that you’ll get are the same, or almost the same. If you ask everyone to use new software or a different interface, there may be some difficulties.”

Changing perceptions

Long work hours have added to TSMC’s reputation as a company where fab workers sacrifice their health in return for attractive compensation packages. That, and the opportunity to participate in the development of the world’s most advanced chip technology.

Still, working conditions may not be as demanding as they were a decade ago.

“When I first joined the company, there were times when I worked long into the wee hours,” the principal engineer said. “In the past five years and even in the last ten years, due to the revision of Taiwan’s Labor Standards Act, everyone’s perception of work has changed. The company also supports a work-life balance. The culture is slowly changing, but it’s not like what you have in western nations like the United States.

“More or less, the culture needs to be changed, but the overall work environment and requirements have been established in Taiwan for a long time,” the U.S. engineer said. “So this will be transplanted to TSMC Arizona. Some small modifications should make it more acceptable, but the American engineers will need to adapt to the work environment and this kind of culture.”

“Changing the culture or work environment from what it’s like in Taiwan will be very difficult. After all, it’s possible that more than half of the people in Arizona may come from Taiwan,” he added.

First wave 

The U.S. government has worked closely with foundry leaders TSMC and Samsung to help revive U.S. semiconductor manufacturing. The current culture clash reflects the seismic shift in the locus of chip manufacturing pioneered in the U.S. Today, the roles are reversed:

Americans workers at TSMC’s Arizona fab may chafe at becoming the humble students of their mentors in Taiwan, who nearly 50 years ago transferred semiconductor technology from RCA of the U.S.

Only in the last few years has a consensus emerged for responding to

the American industry’s decline in the form of proposed legislation that would provide $52 billion in subsidies for domestic semiconductor production.

The legislation also responds to chip shortages that for more than a year have crippled the auto industry and other manufacturers reliant on semiconductors to power their digital products. Collectively, these markets forces have also exposed fragile global supply chains.

Hence, policy makers have courted fab giants like TSMC. So far, more than 400 of TSMC’sAmerican engineers have traveled to Taiwan for training, the company said in emailed comments to EE Times. The Arizona fab is on track to start production in 2024, making it the most advanced wafer fab in the U.S.

American trainees in Taiwan will bring 5-nm process technology to Arizona. Now is the busiest time for trainees as they ramp fab operations, Gao said.

Training for American employees includes briefings on TSMC’s culture and core values, corporate policies, semiconductor process engineering and device physics, as well as on-the-job training.

TSMC emphasizes the well-being of its employees, insisting it seeks to maintain internal communication channels that allow workers to share ideas and concerns with management regarding workplace conditions and management practices.

Employees are eligible for overtime pay or can take compensation leave, TSMC spokesperson Gao said.

“It’s not like we are squeezing them. If we see any person who stays in the office longer than they should, the manager will actually check with the employee.” A normal shift is not 12 hours, and TSMC prefers that engineers work normal hours during their shift, she added.

Different positions may have different requirements, so work hours vary, according to the principal engineer. “An equipment engineer might start work at 8 o’clock in the morning and leave around 9 o’clock at night, but is it normal? This may happen two or three days a week. On a production line, the equipment must be maintained.

“If you are a process engineer, it will be more stable. Maybe you can start work at 8:30 a.m.and leave before 7:30 p.m. If there are some urgent matters, you may have to stay later.”

Process engineers are akin to chefs, creating recipes TSMC uses to roll out new technologies like its most advanced 3-nm node. “In Taiwan, the semiconductor companies almost all have this kind of culture,” the principal engineer said.

Short of an earthquake or a power outage, employees need not return to a fab after normal working hours, according to the engineer. Smaller issues can usually be solved over the phone. After midnight, he said it’s very rare to get a phone call.

According to provisions of Taiwan’s Labor Standards Act, the total number of working hours per week must not exceed 48 hours.

Foot soldiers 

TSMC is often likened to a well-disciplined army. The company has the perhaps undeserved reputation for using Ph.Ds to monitor a single piece of equipment on a production line.

“Basically, one machine does not require a Ph.D to look after it,” said Lai I-Chung, president of The Prospect Foundation, a think tank run by the Taiwan government. “But since we have these over-educated engineers managing the process, they can deal with problems onsite very quickly. That’s how the competitiveness of TSMC really emerged.

“We are fielding our Ph.Ds as foot soldiers, but actually many of them could be colonels. That kind of culture wouldn’t work in the United States.”

The hope is that TSMC can improve its management skills so engineers can eventually work eight-hour shifts. In a 2020 interview Lai said, “I do not think that TSMC is ready for that.”

TSMC does not require Ph.Ds to tend production equipment, but it doesn’t deny that some serve in that role. “The machines are extremely dedicated, expensive and complex,” Gao said. “A lot of those machines may be actually more expensive and more complex than a Ferrari. It’s not an easy job.“

TSMC said it won’t resort to transferring staff from Taiwan to the U.S., and it doesn’t plan to hire Taiwanese graduates from U.S. universities to run the Arizona fab.

Rick Cassidy, who has worked for TSMC since 1997, is the Arizona fab’s CEO. The company recently hired another U.S executive as senior vice president overseeing operations at the facility, according to Gao.

Moving 1,000 employees from Taiwan to Arizona won’t work, she added. Fab employees must be part of the local culture.

That strategy may have some shortcomings, however.

Arizona employees are mainly recent graduates who have “zero working experience,”according to Gao. “Most of them probably have never been to Asia. So cross-cultural communication and collaboration is very important.”

TSMC faces still more challenges with the opening of the Arizona fab.

The biggest may be moving the entire supply chain of test-and-assembly companies and materials suppliers to the U.S., according to the principal engineer in Taiwan.

“There are already so many suppliers in Taiwan,” he said. “Can you transplant all of these, or do you have to find new ones locally? Another problem is that costs are higher in the United States.”

Those costs could be twice what they are in Taiwan, he noted.

This article was originally published on EE Times.

Alan Patterson has worked as an electronics journalist in Asia for most of his career. In addition to EE Times, he has been a reporter and an editor for Bloomberg News and Dow Jones Newswires. He has lived for more than 30 years in Hong Kong and Taipei and has covered tech companies in the greater China region during that time.

 

Editor’s Note: The original title incorrectly stated the Arizona fab as TSMC’s first U.S. fab.

 

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