Inside Taiwanese chip giant, US expansion stokes tension: Report

Internal doubts are mounting at the Taiwanese chip maker over its US factory, according to interviews with 11 TSMC employees

Shortage of raw materials and unavailability of containers in August have lengthened lead times – the time taken between ordering a chip and its delivery.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s biggest maker of advanced computer chips, is upgrading and expanding a new factory in Arizona that promises to help move the US toward a more self-reliant technological future. But to some at the company, the $40 billion project is something else: a bad business decision.
Internal doubts are mounting at the Taiwanese chip maker over its US factory, according to interviews with 11 TSMC employees. Many of the workers said the project could distract from the research and development focus that had long helped TSMC outmaneuver rivals. Some added that they were hesitant to move to the US because of potential culture clashes.

Their concerns underline TSMC’s tricky position. As the biggest maker of chips that power everything from phones to cars to missiles, the firm is strategically important with highly coveted technical know-how. But caught in a deepening battle between the US and China over technological leadership, TSMC has tried to hedge its bets — only to find that its actions are creating new tensions.
Its factory expansion in the northern outskirts of Phoenix is meant to bring advanced microchip production closer to the US and away from any potential standoff with China. Yet the effort has stoked internal apprehension, with high costs and managerial challenges showing how difficult it is to transplant one of the most complicated manufacturing processes halfway across the world.

The pressure for the Arizona factory to succeed is immense. Failure would mean a setback for US efforts to cultivate the advanced chip manufacturing that mostly moved to Asia decades ago. And TSMC would have spent billions on a plant that did not produce enough viable chips to make it worth the effort.
The chip giant, which has long had almost all its factories in Taiwan, is now also building a facility in Japan. European policymakers have rolled out plans to attract a TSMC factory, and the company is in the final stages of making a decision about that plant,sources said.

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Nina Kao, a TSMC spokeswoman, did not directly address the internal concerns over the Arizona investment. But in an email, she said the decision on the US factory location had been based on various factors, including customer demand, market opportunity and the chance to tap global talent. Kao added that TSMC was strengthening its training to integrate overseas talent into its corporate culture. The firm will “actively listen and provide change where needed,” she said.
©2023 The New York Times News Service
Hyundai to divest Alabama subsidiary following child labour revelations
South Korean automaker Hyundai Motor on Friday told shareholders that it would divest its controlling stake in a major Alabama auto parts plant where Reuters last year documented children as young as 12 were working.
In a February 24 letter to shareholders from Hyundai Chief Executive Jaehoon Chang, the company said recent audits at 29 of its direct suppliers across Alabama made it confident they are “now in full compliance with underage labour laws.”
                                                                                                                                                       - Reuters

First Published: Feb 25 2023 | 12:03 AM IST

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