Taiwan semiconductor talents relocate to US, sparking brain drain fears
A “little Taiwan” is forming in a sprawling desert in northern Phoenix in the US state of Arizona.
With the construction of a massive fabrication plant by Taiwan’s top chipmaker Taiwan Semiconductor Manufacturing Company (TSMC) in the area, some 500 Taiwanese engineers and their families have relocated there in recent weeks.
According to Taiwanese media reports, these engineers live in new apartment compounds which come complete with amenities such as gyms, swimming pools, and barbecue pits.
Employees have also received substantial housing and car subsidies and more generous salaries than if they had remained in Taiwan, according to the media.
While there is a lot of fanfare over the company’s presence in the state, bigwigs such as US President Joe Biden and Apple chief Tim Cook attended the plant’s “tool in ceremony” last week to mark the setup of its first batch of equipment, it has sparked concerns about a possible brain drain from Taiwan.
More crucially, there are also worries that TSMC’s continued expansion beyond Taiwan’s shores will weaken what many call its “silicon shield” amid increased aggression from Beijing, which views the island as a breakaway province to be reunified.
The so-called “silicon shield” is the idea that Taiwan’s unrivalled strength in producing semiconductor chips, the critical components used in items such as smartphones and cars, can protect it against a Chinese attack.
Taiwan produces 65 per cent of the world’s semiconductors and almost 90 per cent of the most advanced chips, and TSMC is the world’s largest contract chipmaker.
The concerns arise especially after TSMC’s announcement that it plans to build a second facility at the Arizona site, more than tripling its planned investment there to US$40 billion, among the largest foreign investments in American history.
Besides the US, TSMC is constructing a fab in Japan’s Kumamoto Prefecture.
“If other countries no longer rely on Taiwan for advanced chips, isn’t it worrying that our ‘protection’ will disappear?” opposition lawmaker Chiu Chen-yuan said in a legislature meeting last week.
But experts and officials have repeatedly said that there should be no cause for concern.
Taiwan’s Economic Affairs Minister Wang Mei-hua noted how the company has a “complete supply chain in Taiwan” that is not easily replicated. The company’s most advanced technology will also remain on the island, she said.
Its first plant in Arizona, which is set to begin production in 2024, will produce chips using the 4 nanometer process, while its second plant, a 3 nanometer fab, will be ready by 2026. The Japanese facility will produce chips with technology ranging from 10 nanometeres to 20 nanometers.
In Taiwan, plans are afoot for 1 nanometer and 2 nanometer fabs, Wang said. Smaller semiconductors are more cutting-edge because they lead to the improved performance of devices.
“Taiwan continues to be TSMC’s most important production base,” she stressed at a media conference in Taipei last week.
Meanwhile, TSMC Chairman Mark Liu has dismissed concerns of a brain drain of its top talents.
“Everyone has read in the newspapers about TSMC sending 500 engineers to the US, but we have 50,000 engineers in Taiwan,” he said, adding that many younger Taiwanese are in fact “too comfortable” to move out of their comfort zone.