What Works in Taiwan Doesn’t Always in Arizona, a Chipmaking Giant Learns
What Works in Taiwan Doesn’t Always in Arizona, a Chipmaking Giant Learns
TSMC modeled its facility in Phoenix on one at home. But bringing the company’s complex manufacturing process to America has been a bigger challenge than it expected.
Whatever challenges Taiwan may face during manufacturing, I imagine them being an island surrounded by water helps. Whereas Arizona is… a desert. Unless I’m behind Arizonian lore here, I don’t think a place that imports water by the truckload is the best place for a notoriously water intensive production.
Arizona was one of the stranger locations to pick to be sure. That said, Taiwan needs purified water that can't be directly sourced from the ocean, so chip making is also causing trouble there. For example, this kind of stuff happens there https://www.npr.org/2023/04/13/1169462995/taiwan-makes-tough-decisions-as-it-faces-its-worst-drought-in-nearly-a-century
Arizona was one of the stranger locations to pick to be sure.
Not as strange as you might think.
Intel fabs have been located in Arizona for decades. There are six fabs open currently: https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_sites#Current_fab_sites
About water. The Colorado River provides the largest source of fresh water (that can be purified further and easier) for the Greater Phoenix Valley. They are stored in reservoirs behind large dams. https://en.wikipedia.org/wiki/Salt_River_Project (sorry to use natopedia but these pages were short and to the point)
It's disgusting how many data centers are located in Phoenix. It's the (mostly) dry climate, and that allows better thermal and moisture control.
EDIT: Here are the locations of Data Center in the Phoenix area. 78 just in that area. https://www.datacentermap.com/usa/arizona/phoenix/
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The CHIPS Act money could have better spent on Frito Lay's, Herr's, Utz and others.
the whole project basically achieved the exact opposite of its stated goals
This is why the bottom-up democracy of China works better. As I understand it -feel free to correct me- at the local level it is very democratic and with a lot of citizens participating. The local politicians then climb up the hierarchy until assuming top national positions through merit, be it by passing tests or proven track record of accomplishments. I think the USSR also had something similar which is where the term soviet comes from.
FYI TSMC was forced by the US to build a non-profitable plant in Arizona https://www.taipeitimes.com/News/biz/archives/2022/04/22/2003776996
These guys aren't idiots. Most Taiwanese companies are headed by engineers that are pennypinchers.
Frankly, I can't see what possible reason TSMC would have for actually wanting the project to succeed.
American labor is too expensive for semiconductors. The local construction workers were unionized, and TSMC went out of state to look for construction workers. Semiconductors are something East Asians do best.
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American labor is 50% more expensive than in Taiwan. The US doesn't have the skilled labor necessary to expand capacity. The attrition rate is high at 40% because the semiconductor market competes with other industries for the same labor, and American workers don't like the work culture. To retain workers, American fabs need to bid up prices. Semiconductors produced in the US will need to pass on their costs onto consumers, and demand for the final product is affected by prices, not just utility. Passing on costs onto consumers, governments subsidies will probably still be necessary many years into the future.
buy american!
unless it’s products and services that actually matter!
Hmm, that's one hell of a modlog you have there.