The Mission of Taiwan: Managing Taiwan as a Powerhouse in Semiconductors and the Silicon Shield of China, according to Tim Cook and Joe Biden

At a ceremony to open its new $40 billion manufacturing site in Arizona, TSMC was feted by US President Joe Biden and Apple’s Tim Cook, who said that it would help secure America’s supply of most advanced chips.

The chipmaker in Taiwan, the world’s most important, is being put under increased political and commercial pressure to expand internationally. The company is looking into investing in Europe and building a facility in Japan.

“They’re like the Hope Diamond of semiconductors. Everybody wants them,” said G. Dan Hutcheson, vice chair of TechInsights, a research organization specializing in chips. (The Hope Diamond is the world’s largest blue diamond, which now resides at the Smithsonian Institute’s National Museum of Natural History in Washington.)

The company is perceived as being so valuable to the global economy, as well as to China — which claims Taiwan as its own territory despite having never controlled it — that it is sometimes even referred to as forming part of a “silicon shield” against a potential military invasion by Beijing. The TSMC presence is a big incentive to protectTaiwan against any attempt by China to take it.

“The idea is that if Taiwan became a powerhouse in semiconductors, then America would have to support and defend it,” said Hutcheson. The strategy has been a huge success.

Chiu said that the chip giant was under political pressure to move its operations to the US. He cited the transfer of 300 people, including TSMC engineers, to the Arizona plant. There wasn’t a secret deal or an attempt to diminish Taiwan’s importance to TSMC.

“It is similar to what happened in the US in the 70s and 80s when manufacturing jobs were being shifted away from the States into other countries. He said that the cities were bankrupt and many local jobs were lost.

“It also suggests that TSMC’s customers are asking for more geographic diversification, which is something that wasn’t previously a key concern of major customers.”

The Taiwan Semiconductors Manufacturing Company (TSMC) aims to expand its operations by adding new engineers and production line operators in the next few years

Semiconductors are an indispensable part of just about every electronic device. They are difficult to make because of the high cost of development and the level of knowledge required, meaning much of the production is concentrated among a handful of suppliers.

“TSMC’s decision to expand its Arizona investment is evidence that politics and geopolitical risks will play a bigger role than previously in supply chain decisions,” said Chris Miller, author of “Chip War: the Fight for the World’s Most Critical Technology”.

“This would make economic sense given [the] lower salaries [and] higher quality of Taiwanese engineers,” he said, adding that the company needs the approval of the Taiwan Ministry of Economic Affairs to move its most advanced technologies abroad, which it was unlikely to give.

Many experts believe that by the time 3-nanometer chips are being made in Arizona, TSMC’s Taiwan operations would be producing even smaller, more advanced chips.

The people who are doing the development work will work closely with each other. You don’t want it to be disrupted. It is not an easy thing to do.

The world’s largest contract chipmaker is looking to recruit new engineers and production line operators across its home base of Taiwan — in the cities of Hsinchu, Taichung, Tainan and Kaohsiung — it confirmed Monday.

TSMC said in a statement that it is recruiting from both experienced professionals and first-time job seekers.

The manufacturing giant is looking for candidates with backgrounds in different fields of engineering, as well as finance, management and human resources, it added.

The Rise of TSMC in Asia: Earning $121 Billion in Bonuses and Profit Sharing to Employees in Taiwan by 2022

In Asia, TSMC’s market cap is currently neck-and-neck with that of Chinese tech giant Tencent

            (TCEHY), which is worth more at about 3.5 trillion Hong Kong dollars ($448.4 billion).

In January, TSMC posted strong earnings, but warned of an expected drop in revenue in the first six months of the year. CEO CC Wei told analysts at the time that the firm expected “a healthy recovery” later in 2023, with sales expected to pick back up in the second half.

Due to its record earnings last year, TSMC’s board last month approved the distribution of $121 billion New Taiwan Dollars ($4 billion) in performance-related bonuses and profit sharing to employees based in Taiwan.

By comparison, the average monthly salary in Taiwan in 2022 was 44,417 Taiwanese dollars ($1,452), according to the government. That would equate to roughly 533,004 New Taiwan Dollars ($17,426) per year.