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So the article is suggesting it comes down to this: That Taiwainese workers will work 16 hour days and weekends. That's true and probably won't happen in Amer

So the article is suggesting it comes down to this: That Taiwainese workers will work 16 hour days and weekends. That's true and probably won't happen in America with American workers. But, before we just take that one factoid and call it settled, I'd love to understand what the ROI would be on a plant that just hired twice as many workers. My impression is that the margins on these chips are 100-1000x.

smallnamespace 3y ago
You’re conflating the cost of chips in a completed fab with the cost of building the fab. These workers are for the latter.
- zug_zug 3y ago
  Did you read the article? Most of the article is about cultural differences among workers > “They really are trying to push this narrative that Americans are slower because of lower technical ability, but I really don’t believe that’s the truth,” an American engineer who recently left TSMC told Rest of World. “The Taiwanese create this false sense of urgency with every single task, and they really push ‘you need to finish everything immediately.’ But it’s just not realistic for people that want to have some normal work-life balance.”
trashtester 3y ago
It sounds like much of the problem is not time spent working, but cultural friction. The American's expect a work environment similar to in American companies, while the Taiwanese (both management and others) expect Taiwanese standards, and neither side wants to back down. This will cause both sides to have something resembling racist feelings towards the other group. And when there isn't even a shared language that all can use (and are willing to use), it doubles the problem and introduces a lot of inefficiency. English is generally the current Lingua Franca, but TSMC employees appear to be either to proud of their language or improperly selected for language mastery to be willing or able to switch. And finding enough staff able to work using mostly Mandarin is probably even more unrealistic. TSMC will probably overcome all of these issues, if the motivation is there. It's just that things will move a bit more slowly than expected until the culture issues settle down.
- roenxi 3y ago
  > The American's expect a work environment similar to in American companies American culture resulted in chip-making moving from the US to Taiwan. That is why the foreigners are building this plant - they do things better than the locals. I hope the Arizona employees are expecting some level of change to happen. Chinese culture has resulted in substantially more prosperity being created than the US has managed over the last 50 years and it is obvious they are doing something better. Although I'm not sure how much to read in to these sort of articles that are awash with confident anonymous sources. It is hard to get a grip on how much is disgruntled employee chatter and how much is serious.
  - pjc50 3y ago
    > Chinese culture has resulted in substantially more prosperity being created than the US has managed over the last 50 years and it is obvious they are doing something better Perhaps, although even with three times as many people the GDP of China is still less than that of the US. We should also ask in both cases "prosperity for whom" and "at what cost" (and to whom as that cost fallen). The median American is still wildly better off than the median Chinese resident, as can be seen from the migration flows. Not to mention that Taiwan is not, despite all the polite fictions, China, and TSMC is anyway a unique project. You might as well ask "can we clone Morris Chang?"
    - trashtester 3y ago
      The Taiwanese population is to a great degree Chinese, but not only have they enjoyed a much freer and capital friendly economy (and society in general), they also started out with much of the economic elite of China that was fleeing when Mao took over. It seems like a larger percentage of the population in Taiwan (compared to mainland China) have the kind of productivity that has been gathering in a few mainland cities, such as Shanghai. Younger Taiwanese people in particular also seem to be building a special non-Chinese Taiwanese identity. I'm not sure if that has any significant effect on productivity though.
    - roenxi 3y ago
bevekspldnw 3y ago
The Japanese figured out how to build and manage American auto factories, I’m hopeful the Taiwanese will figure it out as well.
pjc50 3y ago
> My impression is that the margins on these chips are 100-1000x That would be false; you can read the margins off the report: https://pr.tsmc.com/english/news/3131 https://pr.tsmc.com/english/news/3131 "Gross margin for the quarter was 53.1%, operating margin was 42.0%, and net profit margin was 38.0%" (and of course if the factory isn't operating, its margins are zero!) No, this is an expertise problem, and I suspect that like a lot of software projects it would get worse with more people because the vast majority of the problem is addressing specific details that require the knowledge of particular individuals. It's not like you can materialize IC factory engineers from anywhere as if they were Uber drivers, either.
- zug_zug 3y ago
  I think the question still holds of -- what % of operating expenses are headcount? Is it feasible to double that number. Because frankly I don't think American engineers will (nor should) work 18 hour days unless they are getting paid I don't know, 200k->300k. If we can't find a way to make the factory break-even meeting industrial regulations for US citizens then perhaps it needs to be staffed by H1B workers or something.
HDThoreaun 3y ago
In my experience 40 hours plus 40 hours does not equal 80 hours in the office. Someone working twice as long is just able to accomplish a ton more than two people working 40 hours because theres less collaboration friction.

smallnamespace 3y ago

You’re conflating the cost of chips in a completed fab with the cost of building the fab. These workers are for the latter.

zug_zug 3y ago
Did you read the article? Most of the article is about cultural differences among workers > “They really are trying to push this narrative that Americans are slower because of lower technical ability, but I really don’t believe that’s the truth,” an American engineer who recently left TSMC told Rest of World. “The Taiwanese create this false sense of urgency with every single task, and they really push ‘you need to finish everything immediately.’ But it’s just not realistic for people that want to have some normal work-life balance.”

trashtester 3y ago

It sounds like much of the problem is not time spent working, but cultural friction. The American's expect a work environment similar to in American companies, while the Taiwanese (both management and others) expect Taiwanese standards, and neither side wants to back down. This will cause both sides to have something resembling racist feelings towards the other group. And when there isn't even a shared language that all can use (and are willing to use), it doubles the problem and introduces a lot of inefficiency. English is generally the current Lingua Franca, but TSMC employees appear to be either to proud of their language or improperly selected for language mastery to be willing or able to switch. And finding enough staff able to work using mostly Mandarin is probably even more unrealistic. TSMC will probably overcome all of these issues, if the motivation is there. It's just that things will move a bit more slowly than expected until the culture issues settle down.

roenxi 3y ago
> The American's expect a work environment similar to in American companies American culture resulted in chip-making moving from the US to Taiwan. That is why the foreigners are building this plant - they do things better than the locals. I hope the Arizona employees are expecting some level of change to happen. Chinese culture has resulted in substantially more prosperity being created than the US has managed over the last 50 years and it is obvious they are doing something better. Although I'm not sure how much to read in to these sort of articles that are awash with confident anonymous sources. It is hard to get a grip on how much is disgruntled employee chatter and how much is serious.
- pjc50 3y ago
  > Chinese culture has resulted in substantially more prosperity being created than the US has managed over the last 50 years and it is obvious they are doing something better Perhaps, although even with three times as many people the GDP of China is still less than that of the US. We should also ask in both cases "prosperity for whom" and "at what cost" (and to whom as that cost fallen). The median American is still wildly better off than the median Chinese resident, as can be seen from the migration flows. Not to mention that Taiwan is not, despite all the polite fictions, China, and TSMC is anyway a unique project. You might as well ask "can we clone Morris Chang?"
  - trashtester 3y ago
    The Taiwanese population is to a great degree Chinese, but not only have they enjoyed a much freer and capital friendly economy (and society in general), they also started out with much of the economic elite of China that was fleeing when Mao took over. It seems like a larger percentage of the population in Taiwan (compared to mainland China) have the kind of productivity that has been gathering in a few mainland cities, such as Shanghai. Younger Taiwanese people in particular also seem to be building a special non-Chinese Taiwanese identity. I'm not sure if that has any significant effect on productivity though.
  - roenxi 3y ago

bevekspldnw 3y ago

The Japanese figured out how to build and manage American auto factories, I’m hopeful the Taiwanese will figure it out as well.

pjc50 3y ago

> My impression is that the margins on these chips are 100-1000x That would be false; you can read the margins off the report: https://pr.tsmc.com/english/news/3131 https://pr.tsmc.com/english/news/3131 "Gross margin for the quarter was 53.1%, operating margin was 42.0%, and net profit margin was 38.0%" (and of course if the factory isn't operating, its margins are zero!) No, this is an expertise problem, and I suspect that like a lot of software projects it would get worse with more people because the vast majority of the problem is addressing specific details that require the knowledge of particular individuals. It's not like you can materialize IC factory engineers from anywhere as if they were Uber drivers, either.

zug_zug 3y ago
I think the question still holds of -- what % of operating expenses are headcount? Is it feasible to double that number. Because frankly I don't think American engineers will (nor should) work 18 hour days unless they are getting paid I don't know, 200k->300k. If we can't find a way to make the factory break-even meeting industrial regulations for US citizens then perhaps it needs to be staffed by H1B workers or something.

HDThoreaun 3y ago

In my experience 40 hours plus 40 hours does not equal 80 hours in the office. Someone working twice as long is just able to accomplish a ton more than two people working 40 hours because theres less collaboration friction.