Taiwan Semiconductor Manufacturing Co. (TSMC) founder Morris Chang emphasized the crucial role of dedicated engineers and low employee turnover rates in maintaining Taiwan’s leadership in the global semiconductor industry, during a speech delivered on Monday. TSMC, the world’s largest contract chipmaker, has a significantly lower annual turnover rate of 4-5% compared to the 15-20% experienced by US companies during the 1970s and 1980s.
Chang, who retired as TSMC’s chairman in 2018, highlighted that the US semiconductor industry faced a decline starting from the 70s-80s due to increased employee turnover rates. He underscored that it takes several years to train engineers and production line workers, making a high turnover rate detrimental to significant achievements within the industry.
The founder also outlined TSMC’s unique business model, which involves outsourcing to companies like TSMC to roll out chips using advanced production technologies. This model allows clients to focus on IC design, fostering a team work environment. The company’s three production sites in Taiwan facilitate quick movement of engineers between plants, an approach Chang suggested would be impossible in larger countries like the US.
TSMC is planning significant investments in the US, with two wafer fabs under construction in Arizona. Despite delays due to a lack of skilled workers pushing back commercial production at the first plant from 2024 to 2025, these facilities are set to utilize advanced 4 nanometer and 3nm processes respectively.
This follows an additional $4.5 billion funding approval for TSMC’s fab construction in Arizona by Taiwan’s Ministry of Economic Affairs on Monday. The investment aims to enhance TSMC’s customer partnerships and bolster Taiwan’s semiconductor industry.
However, TSMC has faced criticism over its “brutal” corporate culture from former and current employees in the US. In response, TSMC chairman Mark Liu stated that the semiconductor manufacturing industry requires dedication beyond lucrative wages.
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