TSMC’s American ‘Debacle’
Viola Zhou on Tuesday reported an extremely thorough, quite lengthy piece about the cultural differences and headaches in Taiwan Semiconductor Manufacturing Company’s new semiconductor fabrication plant in Arizona, typically called a “fab.” This was my favorite part that truly exemplifies the differences between work culture in the East and the West:
At Fab 18, nearly all communication took place in Taiwanese and Mandarin Chinese, the two most widely spoken languages in Taiwan. The Americans found it difficult to understand meetings, production guidelines, and chatter among local engineers. In theory, every American was supposed to have a Taiwanese buddy — a future Arizona worker who would help them navigate the workplace. But the Americans said their buddies were often too busy to help with translations, or else not familiar enough with the technical processes because they were freshly transferred from other production lines.
Many trainees, including Bruce, relied on Google Translate to get through the day, with mixed results. Technical terms and images were hard to decipher. One American engineer said that because staff were not allowed to upload work materials to Google, he tried to translate documents by copying Chinese text into a handwriting recognition program. It didn’t work very well…
TSMC’s work culture is notoriously rigorous, even by Taiwanese standards. Former executives have hailed the Confucian culture, which promotes diligence and respect for authority, as well as Taiwan’s strict work ethic as key to the company’s success. Chang, speaking last year about Taiwan’s competitiveness compared to the U.S., said that “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 a.m.” And, he added, the wife of a Taiwanese engineer would “go back to sleep without saying another word.”
During their visit, the Americans got a taste of the company’s intense work culture. To avoid intellectual property leaks, staff were banned from using personal devices inside the factory. Instead, they were given company phones, dubbed “T phones,” that couldn’t be connected to most messaging apps or social media. In one department, managers sometimes applied what they called “stress tests” by announcing assignments due the same day or week, to make sure the Americans were able to meet tight deadlines and sacrifice personal time like Taiwanese workers, two engineers told Rest of World. Managers shamed American workers in front of their peers, sometimes by suggesting they quit engineering, one employee said.
This story reported a challenge with chip manufacturing in the United States that I hadn’t considered until now: cultural differences. Semiconductor manufacturing — like any manufacturing — is a very male-dominated industry, and also one that happens to be low-paying in the East with frankly atrocious working conditions, so bringing that industry to the West, where workers expect shorter work hours and more humane treatment, is difficult. Later in the story, Zhou reports how female co-workers were mistreated, how employees weren’t permitted to bring their phones to work, and how there was a disconnect between the Taiwanese managers and American workers. I suggest you read the piece in its entirety.
The obvious solution to this problem is for the managers themselves to be American, but that’s unfeasible as of now because someone needs to train those managers for the job. Unlike other multinational corporations that have operated in the United States for decades, TSMC needs to first train the Americans to a level of seniority before they can take over the plants entirely. This creates a major bottleneck in the form of a chicken-and-egg problem: TSMC needs American workers to function as supervisors, but Americans want to leave their jobs at TSMC because of the Taiwanese managers. It’s a tough problem to solve, but one that I think can be ironed out with some changes to C-suite leadership.
Unlike the rank-and-file managers who presume authority over the day-to-day operations of the Arizona plant, C-suite executives in Taiwan should be able to rectify this issue by training the Taiwanese managers better. The onus shouldn’t be on the Americans to change — the Taiwanese need to better adapt to the Americans’ way of work. The United States will never be Taiwan or China, and I think TSMC management understands that. The U.S. government is providing the funding, the clients are providing the orders — now, it’s time for TSMC to change how it manages its employees to better its recruiting strategy.
These managers need a change of attitude because that’s inherently the main job of management — to adapt to workers’ preferences. If TSMC doesn’t change the way it controls its workers, the projects will fall apart fast. Funding comes once projects get off the ground, especially if President Biden wins re-election this fall, but for the projects to succeed, workers need to be satisfied. TSMC’s Glassdoor ratings are not desirable for the No. 1 semiconductor manufacturer in the world. Americans care a lot about the culture of the company for which they work, and TSMC needs to understand that and better adapt to American work culture.