Taiwan Semiconductor Manufacturing Company (TSMC) made headlines when it broke ground on its Fab 21 plant in Phoenix, Arizona, with promises to boost local job opportunities and enhance U.S. chip production. However, the company’s decision to bring over 1,000 skilled workers from Taiwan to help meet tight deadlines and manage costs has ignited a backlash. Arizona unions are particularly upset, arguing that this move took jobs away from local workers and raised concerns over fair treatment.
Currently, roughly half of the plant’s 2,200 employees are from Taiwan, a situation TSMC claims will change as the facility expands and more U.S. workers gain the necessary skills. Despite this, the company’s reliance on Taiwanese workers continues to fuel tensions and has even led to accusations of racial discrimination.
Local Workers Left Behind?
When TSMC first announced its Arizona plant in 2020, it boasted about creating thousands of jobs for local workers, offering a significant boost to the state’s economy. However, the reality has proven to be more complicated. The company’s decision to deploy a large number of Taiwanese workers contradicted these early promises, leading to frustration among unions and local employees.
The situation has been made more complex by reports of working conditions at Fab 21 that differ from U.S. labor standards. Extended work hours, for instance, have caused concern among local workers who expected a different work culture. Additionally, allegations surfaced claiming that TSMC’s promotional practices seemed to favor Taiwanese employees over U.S. workers, further deepening the divide between the two groups.
Will Local Workers Ever Take Over?
TSMC maintains that the number of American employees at Fab 21 will increase as the facility grows. The three-phase project, slated to create around 6,000 high-paying jobs, will rely on local workers as they receive training and take on more prominent roles. However, despite these promises, nearly half of the workforce remains Taiwanese, even as the plant nears the end of its first year of operation.
Critics argue that this slow shift toward a more local workforce undermines one of the core objectives of the CHIPS Act—reducing dependence on foreign semiconductor production. The promise of local job creation seems increasingly out of reach as the plant struggles to balance its need for specialized Taiwanese expertise with the goal of promoting U.S. employment.
Delays and Rising Costs
Compounding the issue are significant delays and cost overruns at Fab 21. Initially, TSMC projected that the plant would begin production in 2024, but that timeline has now been pushed to mid-2025. The company cites construction challenges and the complexity of installing advanced chip-making equipment as reasons for the delays.
Moreover, early reports suggest that chips produced in the U.S. may be more expensive than those made in Taiwan, raising questions about the plant’s competitiveness in the long run. Apple, a major client, has expressed interest in purchasing U.S.-made chips, but early production will be limited to older chip technologies, which may not be as appealing for cutting-edge devices.
New Technologies and Staffing Concerns
Future phases of Fab 21 are expected to focus on even more advanced chip technologies, including 3nm, 2nm, and 1.6nm chips. These new processes require specialized tools and expertise, which may once again mean relying heavily on Taiwanese workers. While TSMC aims to increase the participation of local employees, some industry experts remain skeptical about whether U.S. workers will be ready to manage the complex demands of these next-generation chips.
As the plant prepares for these more advanced production stages, questions remain about whether the local workforce will ever be fully equipped to handle the new technologies, or whether TSMC will continue to rely on its Taiwanese staff.
Legal Challenges and Cultural Clashes
TSMC’s Arizona project is also facing legal challenges. The company has been accused of “anti-American discrimination” in a lawsuit that claims Taiwanese workers are given preferential treatment in hiring and promotions. Cultural differences in workplace expectations have also created friction, as the company’s focus on long work hours conflicts with U.S. labor norms. These ongoing tensions threaten to tarnish the company’s image in the state and complicate its relationship with local employees.
The Bigger Picture: Challenges for the CHIPS Act
TSMC’s investment in Arizona was originally seen as a win for the U.S. semiconductor industry, supported by the CHIPS Act aimed at reducing reliance on foreign suppliers, particularly China. However, the delays, workforce issues, and rising costs at Fab 21 are causing some to question whether the project will ultimately fulfill its promises.
The plant’s struggles raise doubts about whether the U.S. can achieve true semiconductor independence, especially when essential components may still need to be sent back to Taiwan for packaging. While Apple has announced plans to establish a separate U.S.-based packaging facility, these gaps in the supply chain point to the complexities of bringing semiconductor manufacturing back to the U.S.
