The US has multiple fabs and has multiple more being built right now. This is just the propaganda of the elite class who sold off our industrial base and you’re repeating it verbatim

Every year it becomes harder to justify hiring a Westerner from a business perspective. America in 50 years will look like Argentina, full of mediocre workers that demand empire era wages. If we wanna change that, we need to work on developing global monopolies and crushing our enemies. Won't happen though, we'll just wither away wondering why our economy is wasting away.

I’ll take this bet and see you in 50 years. The US has surged ahead of the rest of the world in recent years and it’s only just starting to put itself first again.

How? Our industries are being hollowed out. More and more engineering jobs will go to China, Taiwan, Ukraine, Poland, etc. where they are paid half of a westnern's salary and perform nearly as well if not better. This trend will only continue until the U.S is cut out of the equation entirely. Sure we're doing better than Canada, but Canada is the prime example of a country in decline. They won't need to wait 50 years to be Argentina. Same with many other Western countries.

Why didn't this happen in Germany and Japan? Both were born as manuf'ing giants and remain as giants. Compared to many neighboring countries, their labour costs are very high. Yet, they continue to manuf a huge amount of good for domestic consumption and international export. And both countries have very strong labour laws. To an American, it appears almost impossible to fire people in Japan and Germany.

This is exactly right. Onshoring fabs back to the US is part of a long term political and economic strategic plan to counter China called The Clean Network / The "5G trifecta" — TSMC's new fab in Arizona will be the largest onshoring in American history.

https://en.wikipedia.org/wiki/The_Clean_Network#The_%225G_tr...

https://keithkrach.com/article/tsmc-12b-chip-plant-in-arizon...

> This is just the propaganda of the elite class who sold off our industrial base and you’re repeating it verbatim

They’re socializing Americans to get used to a future where their kids have to go to the Middle East and China in search of upwards mobility. (Of course those societies will never be as accommodating of Americans as America has been of Chinese and middle Easterners.)

> a future where their kids have to go to the Middle East

Where? UAE? Israel? Anywhere else? Both are still far less prosperous for the middle class than the US.

I'm unaware of how automatable fabs are. If the workers are high-cost then the machines need to do more or the government needs to subsidize production.

One of them is about five miles from me in Phoenix and it's going poorly. My read is that there are some legitimate labor concerns, some mismanagement, but also a lot of special interest strong arming in things like not bringing in enough Taiwanese workers.

Translation: the business didn’t want to pay enough

I have a friend in Taiwan who works as an engineer for an LED manufacturer. He makes about 2K USD a month. I don't think anyone would even clean toilets for that much in the US. US salaries are just not globally competitive.

And yet salaries in the US are sustained. To me it looks like the issue is that while we know how to start companies and have VC capital, we don't know how to outsource well (even with all the local immigrants)

I have no knowledge of this field, but my naive question would be, wouldn't building such advanced products involve so much more automation relative to number of human workers, that the salary of workers doesn't affect the cost that much?

> the salary of workers doesn't affect the cost that much

It doesn't and that's why Intel still has foundaries in Oregon and Arizona.

The difference is TSMC's leadership doesn't want to play ball with American work culture and wants to keep pushing the 996 mentality (yes, even Taiwan has an extreme overwork and underpay problem).

The Foundary space is a very low margin industry. There's a reason why the only companies left are TSMC, Samsung, Intel, and GlobalFoundaries.

While the TSMC plant in Chandler has been plagued with bad press, the Intel plant right next door has been expanding with almost no hiccups.

> He makes about 2K USD a month. I don't think anyone would even clean toilets for that much in the US.

Do you mean to say that's low pay or high pay compared to the US?

In the US, 2k USD a month would barely be enough to rent a small apartment, let alone pay for utilities and groceries. You'd be left homeless or starving.

It's low pay. That's $12 an hour.

The majority of Americans of all races and genders earn above $15 an hour [0]

Taiwan's average wage (so skewed upwards) was ~$22k a year in 2023 [1]. That was an 8 year high btw - wages have been much lower.

Lots of White Collar Taiwanese would move to Mainland China for that reason - they'd earn similar if not higher salaries in Mainland China AND not pay income tax.

Basically, OP's point is that companies don't optimize for wages alone (and I can attest to that having hired abroad, and helped move the operations of a former employer to Israel+India from the US).

Even TSMC's founder admitted that:

On a podcast hosted by the Brookings Institution last year, Chang lamented what he called a lack of “manufacturing talents” in the United States, owing to generations of ambitious Americans flocking to finance and internet companies instead. (“I don’t really think it’s a bad thing for the United States, actually,” he said, “but it’s a bad thing for trying to do semiconductor manufacturing in the U.S.”) [2]

[0] - https://nationalequityatlas.org/indicators/Wages_15-hr

[1] - https://focustaiwan.tw/business/202311290017

[2] - https://www.politico.com/news/2023/02/14/taiwan-tech-king-pe...

About your last paragraph, how does Intel and Global Foundries (IBM and AMD) do it well? It sounds like moaning from a senior business person wants easy mode. This is a new step in TSMC's history: expanding manuf'ing overseas. I am curious how the new TSMC plant Japan will do.

> how does Intel and Global Foundries (IBM and AMD) do it well

They don't execute as well as TSMC or Samsung, but they're able to do it largely because they're too big to fail and they Defense related subsidizes (eg. Both Intel and GlobalFoundaries got $3Bil from the DoD for manufacturing Secure Enclave chips along with the CHIPS money).

> curious how the new TSMC plant Japan will do.

Probably pretty decent. Japanese and Taiwanese work culture is basically the same so they won't have to deal with labor unions or getting complaints about overwork.

I remember hearing a lot of the American workers hired by TSMC Chandler ended up leaving for Intel Chandler for that very reason.

Basically, TSMC wanted to replicate the exact kind of work and management culture that exists in Taiwan (eg. Long hours, dictatorial managers, relatively low wages, little to no stock compensation, etc)

Or maybe US workers are worth their high salary, and that is why the high US salaries are sustained.

I think it's more that US living requires the high salary. Living expenses quickly cripple anyone who doesn't have a high salary

So money flow to people who need it, and the greater the need, the more forcefully the money flows, eh?

Unfortunately the vast majority of people who need money don't get as much as they need. :(

If they paid what US workers expect, the chips would cost so much that nobody would buy them.

This point of view should be recognized as the propaganda that it is.

TSMC could easily open facilities in the US they just don’t want to pay what it costs.

Exactly, people think you need a genius to work in a fab when, in reality, there are more than enough people you could train, most American students come out of university ready for it;

It's just that they end up working in a startup creating yet another project management tool because of the way capital is allocated in the US and how high salaries are in certain areas.

No country will ever be competent at everything; the US doesn't need fabs. The best for the US in this situation is to figure out how they can outsource this to cheaper countries that are democratic and not possibly the victims of an invasion soon.

In Asia itself (for the distance factor to Taiwan or TSMC headquarters), there are plenty of booming countries economies that, despite having a slightly higher cost (due to supply chain dynamics) than Taiwan, have a more stable foreign policy and good legal framework.

I disagree. We do need fabs because we need the expertise.

As we do have fabs and do have the expertise. Intel produces all of their most advanced chips in the USA. The chips are competitively priced and made with US wages so...

Until "recently" (mobile phone era) Intel/AMD basically had no competition. They completely missed the mobile market and are now seeing competition from ARM in laptop/server. An there is also RISC-V on the radar. When/if CPU architecture becomes more de-monopolized, manufacturing competitiveness will be a big factor.

How do we convince people to pay for the more expensive chips? More automation? Government subsidies? Other?

This is the effort from the 90s to which I am referring:

https://www.oregonlive.com/silicon-forest/2022/04/tsmcs-morr...

“We still have about a thousand workers in that factory, and that factory, they cost us about 50% more than Taiwan costs,” Chang said.

50% doesn't seem that much, but it really needs to be compared to production. Geographical risk spread will always cost you.