15 ms·

> TSMC is very concerned about the talent outflow This is one of the key reasons you need to give the right incentives and compensations to your employees. I h

• emteycz 6y ago
  How do you retain an employee when the competition can offer literally anything?
  • parsadotsh 6y ago
    Offer literally anything. It's geopolitics on both sides.
    • matz1 6y ago
      How ? TSMC literary doesn't have unlimited money.
    • emteycz 6y ago
      TSMC does not have unlimited resources, and even if the resources were provided to them, Taiwan is a much smaller economy.
      • stefan_ 6y ago
        The entire fricking world except Intel gets their cutting-edge (read: profitable) chips made by TSMC. There is quite frankly a lot of latitude for them to raise prices.
        • velox_io 6y ago
          Ironically, even Intel is now planning to use TSMC. Makes you wonder if hell is freezing over... http://fortune.com/2020/07/28/intel-7nm-delay-tsmc-stock-shares-worlds-tenth-most-valuable-company/ http://fortune.com/2020/07/28/intel-7nm-delay-tsmc-stock-sha...
    • throwaway0a5e 6y ago
      True, but the people allocating compensation at TSMC say a few dozen steps away from the western money (which itself is at a disadvantage compared to an authoritarian regime when it comes to allocating large sums of money to arbitrary things) whereas the hiring manger for the other guys is only a couple layers of the org chart below someone who can personally direct the CCP money fire-hose. It's not like TSMC can just raise prices overnight to cover the expense. They'd have to get the money through some back-channel. Getting "state aid" from other states like that is something that is ridiculously tricky to pull off politically. TSMC is definitely at a disadvantage here.
      • jstanley 6y ago
        > (which itself is at a disadvantage compared to an authoritarian regime when it comes to allocating large sums of money to arbitrary things) I don't know about that. If central planning were a good way to run an economy, the Soviet Union would not have collapsed.
        • throwaway0a5e 6y ago
          I'm talking about resource allocation, not central planning. If Pooh Bear decides tomorrow that China will learn how to build pool floats then China will learn how to build pool floats. Everyone falls in line. If the leader of a western democracy wants to do something similar they have to convince people to want to do it and that takes time, policy carrots/sticks and propaganda/indoctrination.
          • free_rms 6y ago
            The US military budget for 2020 is 720 billion dollars. That doesn't even include DHS. Most of it's going to bullshit, like Abrams tanks that the army doesn't even want. Our problem isn't that we're too free and liberal, our problem is that we're too crooked and stagnant.
            • caycep 6y ago
    • Udik 6y ago
      Great time for those engineers!
      • dillonmckay 6y ago
        I am honestly happy for those folks. I know hardware jobs that pay well ate not easy to find.
        • magicsmoke 6y ago
          Specializing in hardware design is really a poison pill despite how interesting the field is. You spend more than a decade in school to gain the skills needed to work at the chip level, which often requires a PhD. Then it turns out that there's only a handful of companies in the world with the equipment or supporting personnel needed for the field, and your skills are worthless outside of these specialized environments. No wonder pay is so low despite the years of schooling needed. After going through those considerations, I ended up dropping out of a PhD in RFIC design and fell back to embedded systems. More companies hiring and versatile enough to slide into general software or web programming if necessary. Chip design is still fascinating, but all traps look nice on the outside. Also, for any aspiring undergrads wandering this way that thought RFIC design was fascinating because they picked up a copy of Razavi's "RF Microelectronics" or something similar and couldn't help but read it cover from cover, the textbooks lie. The analytical equations in a chip design textbook are not reflective of what the actual process is like. While you're still in college, try and get a professor to give you a student addition of Keysight ADS or Microwave Office AWR, along with an SDK from a fab. Then spend a few months of simulation time to see for yourself how much simulated results diverge from analytical models and how painstakingly slow it is to optimize those simulations especially once you start moving into EM simulations. And keep in mind these are simulations, chances are the physical chip will diverge even more due to process variations, unknown parasitics, or even bad simulation models from the fab. If the lack of precision, simulation time, and general drudgery doesn't kill your enthusiasm when compared to your textbook learning, then by all means proceed. It's still a fascinating subject. Every so often when I need a break from code I'll take out my old RFIC textbooks and read a chapter or two. But you really don't want to know how this sausage is actually made.
    • morrbo 6y ago
      From what I read before, they were offered 3x salaries...how do you compete with that?
      • vsskanth 6y ago
        By offering to 3x their salary if they stay. If these engineers possess valuable knowledge they should be paid what they're worth. It's an open market. TSMC is not a military organization to stop them from working for another country.
        • adaml_623 6y ago
          I agree with you and I don't understand how salaries are exempt from the normal capitalism dogma about supply and demand. If I go into a supermarket and the bananas are too expensive then I can either pay or not eat a banana. If salaries are increasing companies can either pay market rate or no. (They can also train internally but that doesn't seem fashionable nowadays)
          • MagnumOpus 6y ago
            > salaries are exempt from the normal capitalism dogma A nation state devoting their trillions to outbid companies is the exact opposite of capitalist dogma. (Even less capitalist than a monopolist conglomerate abusing their dominant market position to outbid/undercut you.)
        • buran77 6y ago
          Sometimes your opponent can outspend you at every step and is possibly more motivated to achieve its goals. For China this is a far more pressing matter than profit, you might even see it as desperation. So this is like wrestling a bone from a hungry dog's mouth. On the other hand TSMC is a publicly traded company. There's a limit to what expenses they can justify in front of the shareholders. China can lure engineers away with 3x the salary probably because that was the limit TSMC settled on, not because that's the limit of what China is willing to pay.
    • tuyguntn 6y ago
      at high grow stage new competitor can offer at least 2x salary and 10x stocks (also convince them that stock will grow more). for that reason they get billions of investing which they can truly spend for anything. how can you compete with such offers? Think about millionaires who joined Snap, Uber, Lyft, Pinterest at the right time like this
      • valuearb 6y ago
        How can you build a competitive semiconductor manufacturer if you are forced to pay 2x salaries? Sounds like a gaudy central planning project doomed to fall apart as soon as it hits market realities.
        • Aperocky 6y ago
          The market reality is that the source of the chips can vanish at any time due to political reason, that's not a market problem anymore, it's now a political problem.
        • coreblocks 6y ago
          But there is real demand for cutting edge semiconductors in China... Do you think people will be satisfied with 14nm SMIC chips forever? Paying $140K salary is peanuts compared to what experienced software engineers at Facebook/Google get, their junior positions pays that much. Or hell $400K salaries at some financial firms. Their semiconductor industry will not be solely made up of TSMC engineers, the vast majority are going to be Chinese juniors who will learn from them and eventually replace them.
    • dumb1224 6y ago
      Semiconductor foundry is the current bottle neck of China. The agreement with U.S is lethal for mainland chip manufactures and will potentially grind the electronics market down to a halt. 4 of top 10 pure-play companies in the world is in Taiwan. IMO this move too obvious and weak to attract talents from these companies. Few people would join the 'chase up to the frontier of technical know-how' just because of better salary packages. It's possibly a 'worst case' scenario type of planning.
    • fspeech 6y ago
      It doesn't matter. There will be an oversupply of capacity and talents down the road. When the inevitable downturn comes you will see even more outflow. You are basically trying to fight entropy here.
    • simonh 6y ago
      Not feasible. You’d have to offer ‘everything’ to every single one of your employees to prevent them being head hunted, but the opposition only has to make a better offer to a few of them to get the inside track info they need. That massive asymmetry makes it almost impossible to stop the brain drain.
      • java-man 6y ago
        Underpaying your critical employees is not a good strategy long term, even though it might look good on the balance sheet short term. Let the free market decide. At some point, other, less tangible factors would start playing, such as individual freedoms, quality of the environment, family friednliness, etc.
        • simonh 6y ago
          It’s not a matter of under paying them. There isn’t a market for thousands of TSMC engineers at 2x or 3x salary in China so that really isn’t the market rate. There’s only a market for 100 of them, but it mostly doesn’t matter so much which 100. TSMC wouldn’t have to just offer say 4x salary to 100 of their engineers to prevent the brain drain, they have to give it to several thousand engineers, and then a China would just up their offer to 5x because their ability to pick off a subset of people gives them 10x or even 100x leverage over TSMC. There’s just no way for TSMC to compete on salary like that. The most they could do is make it costly enough that the Chinese only hire away fewer engineers, at crippling cost to themselves, but they can never cut it down to zero.
          • java-man 6y ago
            There are other factors for these engineers to consider. This outflow may be temporary: once the Chinese side decides that their immediate goals have been met, they either force the Taiwanese engineers to leave, or accept Chinese citizenship, or some other unpleasant thing. What I am saying is that the "free market" is not always limited to money. There are other things that play the role. TSMC must find ways to keep the essential engineers, or they are going to lose. This applies to anyone: you have to adjust to the changing environment, or die. Find something that will keep the best ones that other companies can't offer. Or die, like the rest of the manufacturing industry (look, American manufacturing is too expensive, let's make it in China! look, American programmers are too expensive, let's open a dev center in Bangalore!). On the other hand, I think this is a welcome outcome - the knowledge spreads out and levels the playing field. From a very simplistic and idealistic view, it is better to have multiple industrial and knowledge centers than have everything concentrated in one place or country.
  • amelius 6y ago
    Offer a decent salary plus freedom from political repression.
    • emteycz 6y ago
      I am sure these engineers will be very protected by the CCP. And what other company offers legal immunity as a benefit?
      • amelius 6y ago
        Yes, but how do you know for sure? It's not like you can take their word for it.
        • sudosysgen 6y ago
          Just the same that you can know for sure that your boss won't place a hit on you if you leave. The consequences for China to do that are too high, so it is not in their interest.
      • boznz 6y ago
        Yes CCP has never broken promises <cough> Hong Kong </cough>
• neya 6y ago
  > This is one of the key reasons you need to give the right incentives and compensations to your employees. I have seen too many tech companies failing at employee retention. (Disclaimer - I speak from a neutral standpoint, I'm not a politics person.) It's not so black and white. There's also nationality at play. Chinese employees can be very nationalistic in times of war, especially, if they live in and around ASEAN. The moment something bad happens (to China), they will view it as China being the victim and do things others wouldn't normally do. Case in point: Remember the Huawei ban? A lot of my ex-colleagues and friends (who are Chinese) dumped their iPhones at ridiculously low prices and exchanged it for a Huawei to show support for China (despite being outside of China). I saw this with my own eyes and I was blown away. I mean, convincing an Apple user to switch to Android is a billion dollar problem that Google is trying to solve for years now and just like a snap of a finger, nationality is reason enough for them to make the switch, irrespective of their personal consequences (switching clouds, etc). Likewise, incentives alone isn't enough, there's not much you can do if the employees view this as a nationalistic issue.
  • caoilte 6y ago
    They offered 2.5x salary...
  • SPBS 6y ago
    I'm confused. Are you saying that mainland Chinese feel -more- nationalistic if they live in the ASEAN region, i e. outside of their home country? Or are these employees from an ASEAN country but are just Chinese in ethnicity?
  • hakka-nyu-su 6y ago
    Dumping Apple isn't the best example, since Apple is a luxury product that is more about signaling status than about a great computing power-vs-cost value proposition.
    • thebean11 6y ago
      > more about signaling status than about a great computing power-vs-cost value proposition The iPhone SE is up there in power-vs-cost, and in terms of dollars per year of usage Apple probably has the best numbers.
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• simonh 6y ago
  Appropriate compensation is important, sure, but it’s impossible to stop talent sniping like this. There’s a fundamental asymmetry. You are TSMC and have 50k employees, of which say 5,000 are experienced engineers, the top 10%. A competitor wants to hire away 100 of them and offers them an enhanced salary. They only need to offer that to 100 people, but to stop them getting any of those 5000 employees you have to offer a competitive package to all of them. Any you don’t offer it to are vulnerable to getting hired away. So for every $1m they are willing to spend on enhanced packages, you need to spend $50m in enhanced salaries to block them. If they decide to cut it down to hiring away only 50 engineers, now for every $1m they spend you need to spend $100m. As head of resourcing at TSMC, at what point do you stop the defensive salary inflation? Bear in mind your not competing with the financial resources of just another chip company, you’re competing with the financial resources of the Chinese state.
  • paulpan 6y ago
    > A competitor wants to hire away 100 of them and offers them an enhanced salary. They only need to offer that to 100 people, but to stop them getting any of those 5000 employees you have to offer a competitive package to all of them. I don't think this is true as (I think) you're assuming that all 5000 employees are equally skilled and desired. More realistically, the poaching company wants the more senior/experienced so TSMC only has to watch out for these. Still not an insignificant number nor amount of money. Long-term, the solution is probably for companies to focus more on building their culture and focusing on the non-financial perks (e.g. ala Google) so employees will think twice about leaving.
    • simonh 6y ago
      This 5,000 is the top 10% of TSMC employees, and the article says China is hiring engineers at all levels in the company, so I’m already tilting the deck quite a bit.
  • swordsmith 6y ago
    This is a good way to put it. I suppose Taiwan can boost their nationalism to promote their employees' loyalty. Nationalism has done wonders for China
• starky 6y ago
  There is a good reason why I've been at my current employer as long as I have, they actually give salary and benefit increases that attempt to reflect how you contribute to the company and how much they want to keep you around. Unfortunately, there are other factors that you need to maintain that keep employees around and we have lost a few people that really hurt the overall skill level of the team which had nothing to do with compensation.
• ksec 6y ago
  At first, I thought raising price would do the Job, Wafer is still relatively cheap, It is the Design / Up front cost that is expensive. Higher Revenue > Higher Profits and in turns can paid Engineers a lot better. But then there is Samsung, which has its foundry business partly funded by NAND and DRAM. i.e TSMC cant exactly dedicate the price as much as everyone think they could.