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 1. Tech Industry


TSMC'S LABOR PRACTICES DRAW SERIOUS CONCERN IN ARIZONA — THE COMPANY'S NEW CHIP
PLANT ALLEGEDLY PLAGUED BY WORKER ABUSES

News
By Dallin Grimm
published April 24, 2024

TSMC not a hit with American hires

 * 
 * 
 * 
 * 
 * 
 * 
 * 

Comments (25)

(Image credit: TSMC)


TSMC's new expansion into Arizona has received serious scrutiny from engineers
and industry insiders for its myriad examples of poor treatment of workers,
reports nonprofit news site Rest of World. The article claims the company's
culture of chronic overwork, cruel managerial style, and poor treatment of its
engineers in its Taiwanese plants has ported over poorly to an American labor
force who are now leaving its new plant over perceived abuses.




TAIWAN'S DARLING COMES TO THE US

TSMC, the world's leader in advanced chipmaking, has been a major recipient of
the Biden administration's CHIPS Act, receiving billions of dollars from the US
government in exchange for bringing semiconductor production to the United
States. The corporation's position as the largest company in Taiwan is a concern
for Western powers who fear a conflict with China could potentially hurt their
ability to source TSMC chips. As a result, the government has been aggressively
courting TSMC to open production in the US. 



TSMC's $660 billion stature has grown to the largest company in its native
Taiwan and has earned it godlike reverence, being called a "divine mountain that
guards the nation" by some citizens. As a result, its Taiwanese workforce is
more than willing to make sacrifices for the sake of the company. 12-hour
workdays that extend into the weekends are common, as is harsh treatment from
managers who were expected to call workers out-of-hours and reportedly threaten
firing as punishment for relatively minor failures. This work culture can
survive in Taiwan, where TSMC is the pinnacle of engineering jobs, but when
American engineers are introduced, friction occurs quickly.





LABOR ABUSES DRIVE AWAY NEW WORKFORCE

American engineers were brought to Taiwan back in 2021 to be trained in TSMC
chip production for when the two new expansion plants in Arizona (originally set
to be opened in 2024 and 2026) would begin operation. The report says American
engineers were shocked to encounter the 12-hour workdays and a high-pressure
environment; one engineer asked their manager which of his tasks was of the
highest priority, which was met with the response, "Everything is a priority." 

LATEST VIDEOS FROM tomshardwareTom's Hardware



The inability to prioritize jobs and instead expect furious intensity on every
task, no matter how large, was decried by Americans as poor management, which
leads to inefficiency. But these intense expectations are a feature of company
culture according to its founder, Morris Chang. Chang was quoted by Rest of
World as saying, "If [a machine] breaks down at one in the morning, in the U.S.,
it will be fixed in the next morning. But in Taiwan, it will be fixed at 2 am."
This marriage to impossible timelines was pounded into visiting American
engineers with stress tests; assignments announced on the same week or even day
to ensure American engineers could sacrifice personal time like a Taiwanese
worker.



Once production on the Arizona fabs progressed far enough, American workers were
brought back stateside along with their Taiwanese coworkers. But construction
ran into many delays, with both fabs currently around a year behind schedule.
Many Americans left TSMC in their training phase in Taiwan, and retention fell
further after returning to America and finding that the company work culture
remained even at the new plants. Engineers who expected to work on the
production lines found themselves being tasked with taking out the garbage of
construction workers. Taiwanese managers even reportedly had to receive training
on not yelling at workers in public, which didn't stick. The workers claim that
engineers found that they had to fake test results on production wafers in order
to meet their impossible expectations. 


TSMC'S FUTURE IN THE US

Taiwanese workers who have become accustomed to such workforce rights violations
and American workers used to complaining or quitting over the same conditions
have not been able to fully mesh. Americans complain about "Asian culture" on
Glassdoor, and Taiwanese engineers consider their native coworkers arrogant and
carefree. This friendly fire between workers is heartbreaking to those who know
that the only enemy in such a situation is not their fellow workers but the
corporation that enables such workplace abuse. 


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Policy and are aged 16 or over.

TSMC is not expected to slow down anytime soon, even with such worker rights
abuses drawing ire. It will be able to charge consumers higher prices for its
made-in-America parts, and the 12-figure CHIPS Act funding alone will provide
ample incentive to keep trying to make the Phoenix expansion work. Hopefully
with time comes a better workplace for engineers. For more on this situation and
direct quotes from the engineers in question, read the Rest of World's original
story here. For more on TSMC, consider reading about how TSMC has been helping
Taiwan in the wake of its recent earthquakes.

Dallin Grimm
Social Links Navigation
Freelance News Writer



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See more latest ►


See all comments (25)


25 Comments Comment from the forums
 * hannibal
   And then we wonder why work places goes to East...
   It is compete or die... And competition is lost in most places in the Western
   world.
   Not sure if there is any good solution to this problem. A company that takes
   most out of its workers... wins the price competition. Unless people decide
   to pay more, for less good products that are made in the west.
   Or the laws protecting the workers has to be so strict that Eastern companies
   are not interested in investing in western countries...
   First it was low tech industry... not it is high tech also... USA car
   manufacturers are also losing the race... Soon no workplaces outside cafe
   shops and crockery markets.
   Reply
 * TechLurker
   I'm of 2 minds on this.
   
   On one hand, Asian work ethic IS very strict, head to the grinder, and
   somewhat rigid, but it gets the job done efficiently and on-time with few
   defects. Foreign workers should have expected this going in, knowing it's
   going to be run Asian style instead of Local style, especially for a high
   profile Asian company looking to quickly ramp up after delays.
   
   On the other, America does have its own unique work ethic, and depending on
   who you ask, is either seen as better or worse when it comes to the end
   product. And given that the facilities will be in the US, TSMC should have
   had some leeway to accept lower performance/output from the US side both due
   to cultural differences and the usual teething issues with new staffing.
   
   It seems that TSMC is already predicting lower output, hence their upcoming
   premiums on anything made not in Taiwan effectively limiting said facilities
   to only producing government chips (which was the main point anyway).
   
   As well, based on a few samles of the complaints from both sides, the
   Taiwanese employees complain the Americans are acting entitled and
   complaining too much about working hard or wanting a lower bar of standards
   to be held against, while the Americans are complaining that TSMC is
   basically too strict, borderline abusive, and demanding too much for 12 hours
   of focused work.
   
   All that said, I'm reminded again of why there aren't that many companies
   that can cross the East/West culture/work gap (heck, it's hard enough to
   cross the American/European culture/work gap), and this wouldn't be the first
   time this happened either. It took Sony decades to make leeway for Western
   culture and they had their own fair share of internal issues, but they did
   eventually adapt and get a Westerner to become CEO for their Playstation
   division.
   Reply
 * 35below0
   
   > The inability to prioritize jobs and instead expect furious intensity on
   > every task, no matter how large, was decried by Americans as poor
   > management, which leads to inefficiency. But these intense expectations are
   > a feature of company culture according to its founder, Morris Chang.
   
   That's one way of doing it. Our western parents and grandparents went through
   excesses of capitalism. That's why the work day was shortened, people were
   not worn out and broken down by the age of 25, and worker unions formed to
   put employer power under control.
   
   Morris Chang might have built up a huge company but he still has a lot to
   learn and probably to answer for.
   
   
   
   > Chang was quoted by Rest of World as saying, "If breaks down at one in the
   > morning, in the U.S., it will be fixed in the next morning. But in Taiwan,
   > it will be fixed at 2 am."
   
   It will be fixed by 2 am anywhere. Anywhere the engineer is paid to be on
   call. It has nothing to do with company "culture", only with the work
   agreement.
   
   
   Of course, there are lazy good for nothings coasting and doing as little as
   possible in every company. Instilling a "culture" of rewarding hard work and
   punishing laziness is not itself wrong.
   
   Building a massive complex and hiring engineers only to later find out the
   work conditions are unacceptable is a slap in your own face Mr. Chang. It's
   YOUR job to see it coming and fix it before it happens.
   Responsibility must be taken up at all levels.
   
   It really irks me that people in positions of authority resort to blaming
   their underlings when those underlings, no matter how clumsy, lazy or left
   handed are their own responsibility.
   Reply
 * hotaru251
   > TechLurker said:
   > And given that the facilities will be in the US, TSMC should have had some
   > leeway to accept lower performance/output from the US side both due to
   > cultural differences and the usual teething issues with new staffing.
   
   not really.
   most of the $ is out of their pocket.
   If they accept less than expected results they lose $ every day.
   Theres no benefit to of even making the fab at that point.
   
   If someone got a job at an authentic Chinese food place and didnt know how to
   use a wok...are the bosses suppsoed to accept that? no as again they are a
   business & it harms them.
   
   
   While it does suck (on both sides) US will have to accept the asian culture
   for the job and if they cant don't apply. (simple even if not the ideal
   outcome)
   Reply
 * bluvg
   This type of work environment wasn't uncommon in the West during the
   Industrial Revolution also. And it's quite different when a company plays a
   big role in the existential threat of an entire country. Certainly culture
   plays a role, but there are plenty of other factors at play.
   
   At the end of the day, though, what are TSMC's results vs. Intel, Samsung,
   etc.? There is little connection between the consumer and the unseen plight
   of a product's builders. If Intel achieves their goal of being back on top of
   the manufacturing heap without having to treat workers this way, it will
   undermine Chang's argument and management style.
   Reply
 * King_V
   If your company cannot succeed without abusing workers, then your management
   is poor.
   
   If your company cannot prioritize tasks, making EVERYTHING as "top priority"
   and leaving it to the workers to make "do everything right now" happen, then
   your management is poor.
   
   It appears that TSMC's success is based heavily on operating in a nation
   where worker abuse is acceptable. Making a fortune by running workers ragged
   is easy. Anyone can do that.
   
   TSMC thinks American worker protections are too generous? They'd never
   survive Western Europe!
   Reply
 * DavidLejdar
   At my first job after school, 14-hours shifts were common, except on Fridays,
   Saturdays and Sundays, when it was around 16 hours, and for very little money
   (in Europe). In that context, "12-hour workdays", sounds progressive. :) And
   currently having 9-hour workdays (including lunch), but considering to find a
   time-part job in addition, just to earn a bit more - which would add 10-15
   hours to weekly worktime.
   
   And why don't I apply at TSMC then? Very simple really. The instilled work
   culture "work until you drop, possibly even at quite a young age, so that the
   owner can purchase several luxury cars and stuff", meant that there wasn't
   time for anything else, such as learning to read, to be able to decipher road
   signs to find my way to TSMC. I would have work experience as foreman though,
   which it sounds that TSMC could do with to have that position in the middle,
   and someone qualified for exactly that.
   Reply
 * Elk4806
   The total salary compensation for their engineers isn't great, which is
   another reason why retention is terrible. Who wants to put up with an abusive
   work environment when you can go somewhere else and get paid the same or
   more. Only a matter of time before we see them getting investigated and fined
   for violations. Mr Chang's ego and bad habits have been able to flourish in a
   small country where he lines the pockets of people in his government.
   Reply
 * thestryker
   > hotaru251 said:
   > While it does suck (on both sides) US will have to accept the asian culture
   > for the job and if they cant don't apply. (simple even if not the ideal
   > outcome)
   
   Until Intel's non-technical management opted to not spend the money on EUV
   machines they were completely dominating the fabrication market. What's
   happening with TSMC has absolutely nothing to do with the end product but
   rather a toxic workplace environment fostered in a country without worker
   protections.
   
   Nobody in the US is going to work for TSMC when there are other companies
   paying the same, or more, without the toxic management and culture. This is
   probably why TSMC is having problems getting enough engineers in AZ and Intel
   isn't. TSMC will either change their ways or be relegated to not having
   leading edge in the US and it seems like they've chosen the latter.
   Reply
 * nameless0ne
   The article did not mention that there is a skill issue. The job can be done
   just not at the same pace as in Taiwan. If everyone needs to works 12 hours
   per day then they need 1.5x the workers to retain the same performance. And
   this is a manufacturing sector. If they work 24/7 then they need 3 shifts 8
   hours each. They cannot expect to hire 2 shift of workers and just expect
   them to constantly work 12 hour shifts.
   12 hour shifts are permissible but then they don't work 5 days a week.
   And the mindset of "profit at all cost (meaning at the expense of workers)"
   has finally caught up with China. A lot of businesses are leaving China for
   Vietnam, Indonesia in search of cheaper labor. At some point these places
   will simply run out.
   This is the same discussion as "why the iPhone cannot be made in USA" all
   over again.
   Reply
 * View All 25 Comments

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