Why the US chip manufacturing industry has struggled to ramp up in Arizona

Cultural clashes between Taiwanese managers and American workers are hindering efforts to expand chip manufacturing into the United States .

The Taiwan Semiconductor Manufacturing Company is one of the world's most valuable companies, producing unfathomable numbers of advanced computer chips the modern world relies on. Most of them are produced in a single factory in Taiwan, something the company is seeking to change. In May 2020, TSMC announced plans to open two plants on the outskirts of Phoenix . Four years later, that plan has proved more difficult than expected, largely due to a culture clash between Taiwanese managers and American workers.

“We keep reminding ourselves that just because we are doing quite well in Taiwan doesn’t mean that we can actually bring the Taiwan practice here,” Richard Liu, the director of employee communications and relations at the site, told the New York Times.

According to the outlet's interviews with 12 TSMC employees and executives, cultural differences in work expectations have led to frustrations among both Taiwanese and American employees. The former expect much more vigorous working conditions than the latter are willing to tolerate.

The interviewees reported several occasions when employees quit over disagreements about work expectations, especially expectations to work outside of normal hours. Taiwanese managers sometimes call employees into work in the middle of the night for work emergencies.

TSMC has struggled to handle growing tensions, leading to the company giving managers communication training. The frequency and size of meetings have been reduced after some workers complained about their unnecessary nature.

The TSMC's working culture is so intense that it has faced similar issues in two other countries it is attempting to expand into, renowned for their vigorous working cultures: Japan and Germany.

In Phoenix, more than half of the 2,200 workers were imported from Taiwan, despite the company's pledge to create 6,000 jobs. It plans to move this ratio toward more local hires after the completion of the factory, according to the New York Times.

“We want to make this site a successful site and a sustainable site,” Liu said. “Sustainable means that we cannot keep relying on Taiwan sending people here.”

To make that sustainable future a reality, there has been a push to improve and expand engineering programs at local colleges, and universities.

Besides beefing up electrical engineering programs, schools are also partnering with TSMC through apprenticeships and internships to expose students to the job and the culture of working in the new tech environment.

Schools have also invested in building their own " clean rooms " — incredibly complex, sealed-off, sterile areas where chips are manufactured under stringent conditions. The new spotless environments are a departure from the facilities commonly associated with American manufacturing.

“We have a generation of students whose parents have never once stepped foot into an advanced manufacturing factory,” Scott Spurgeon, the Phoenix center’s superintendent, told the outlet. “Their concept of that is still much like the old mom-and-pop manufacturing where you show up every day and come out with dirty clothes and dirty hands.”

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TSMC has received billions of dollars from the Biden administration, which is seeking to boost the U.S. semiconductor industry. The company itself has pledged $65 billion for the project.

The start date for production has been pushed back amid several obstacles — the first plant is expected to begin production in the first half of 2025, while the second is not expected to begin production until 2027 or 2028.