Arizona TSMC facility continues to fight cultural battles, rising costs & logistical hurdl...

Posted:
in General Discussion

Apple chip partner TSMC faces significant barriers that impede the Arizona chip fabrication facility's progress, and the culture clash between American and Taiwanese employees doesn't seem to be getting batter.

TSMC's Arizona facility grapples with rising costs & logistical hurdles
TSMC's Arizona facility grapples with rising costs & logistical hurdles



As the world's leading semiconductor manufacturer, TSMC's decision to expand into the US was met with widespread approval. Its strategic move is intended to secure supply chains and bring critical manufacturing capabilities closer to key markets.

However, the project is now navigating through rising costs and unforeseen logistical issues that could impact timelines and budgets, according to Rest of World.

TSMC's Phoenix facility, a pivotal component of US efforts to revitalize domestic semiconductor production, was initially projected to cost $12 billion. However, the project's expenses are surging due to global supply chain disruptions and inflationary pressures, underscoring its critical role in the industry.

The construction phase of TSMC's Phoenix facility has encountered a myriad of obstacles. These include difficulties in procuring raw materials and managing an international workforce. Notably, American engineers have struggled with the company's rigid hierarchies, while Taiwanese veterans have observed a lack of commitment among their American counterparts, highlighting the complexity of the project.

TSMC insiders said the company's success hinges on a stringent, military-like work culture. Engineers endure 12-hour workdays and often work weekends as well.

The local sourcing of materials has been less than ideal, with many components still needing to be imported from Asia, which adds to costs and logistical complications. Moreover, the project has faced delays in machinery delivery essential for chip manufacturing, which could push back the operational start date.

Effectively addressing the challenges faced by TSMC's Phoenix facility is not only crucial for the company to meet its projected timelines, but also for the US to establish a more resilient semiconductor supply chain. Failing to do so could lead to significant delays and potential disruptions in the industry.

In the meantime, TSMC is preparing a next-generation 1.8nm chip process. The iPhone is expected to adopt 2nm technology by 2026 with the launch of the iPhone 18 series.

Although TSMC's 1.6nm technology is anticipated to debut in the same year, it won't be used in products until 2027.



Read on AppleInsider

«1

Comments

  • Reply 1 of 31
    looplessloopless Posts: 338member
    If you have ever seen this facility , it is construction on a massive scale and is a long way along.
    It is not some empty lot or hole in the ground TSMC can walk away from. Culture clash or not, they have to make it work.
    nubusronnh2p
  • Reply 2 of 31
    blastdoorblastdoor Posts: 3,367member
    I’d love to see intel regain the process lead and win apples foundry business. 
  • Reply 3 of 31
    rob53rob53 Posts: 3,261member
    blastdoor said:
    I’d love to see intel regain the process lead and win apples foundry business. 
    Why? Intel was always slow to improve their products. They always run hot as well. 
    pulseimages
  • Reply 4 of 31
    rob53rob53 Posts: 3,261member
    It doesn’t surprise me there’s a culture clash in Arizona, especially in today’s rancid political environment. A decade ago we would have welcomed TSMC like we have welcomed Japanese automakers. Not any more and it’s not TSMC’s fault. 
    dewmeralphie
  • Reply 5 of 31
    "Cultural battles".

    Like people who think seeing their families while they're awake has value?

    TSMC insiders said the company's success hinges on a stringent, military-like work culture. Engineers endure 12-hour workdays and often work weekends as well.
    An most Americans don't want to do that.  Not really surprising, given our history.

  • Reply 6 of 31
    ronnronn Posts: 669member
    "Culture battles" = serf-like conditions expected by the Taiwanese overlords are not welcomed by American workers for rights valiantly gained over a century. American workers are not keen to bow down to their bosses, foreign or domestic. See the recent unionization vote by Volkswagen workers in Tennessee. Workers want a fair life-work balance, extra pay for extraordinary work expectations (weekend and night differentials) and above all else, dignity. A "military-like work culture" is a nonstarter, even at defense contractors here in the U.S.
    blastdoorh2pdanox
  • Reply 7 of 31
    blastdoorblastdoor Posts: 3,367member
    rob53 said:
    blastdoor said:
    I’d love to see intel regain the process lead and win apples foundry business. 
    Why? Intel was always slow to improve their products. They always run hot as well. 
    Tell that to Steve Jobs circa 2005. 

    Intel had a couple of CEOs make very bad decisions in the decade or so after Apple switched to Intel. But before then, Intel was the world leader in logic chip manufacturing. 

    Maybe you’re the kind of person who wants America to fail, but I want to see a once great American company rise again.
  • Reply 8 of 31
    rob53 said:
    It doesn’t surprise me there’s a culture clash in Arizona, especially in today’s rancid political environment. A decade ago we would have welcomed TSMC like we have welcomed Japanese automakers. Not any more and it’s not TSMC’s fault. 
    Arizona has always been a pain to do anything. We are a crooked state that started as an outlaws hideaway. TSMC isn’t grea$ing enough to get things done. Other companies have been able to build their plants here like Sumitomo. 
    h2p
  • Reply 9 of 31
    blastdoor said:
    rob53 said:
    blastdoor said:
    I’d love to see intel regain the process lead and win apples foundry business. 
    Why? Intel was always slow to improve their products. They always run hot as well. 
    Tell that to Steve Jobs circa 2005. 

    Intel had a couple of CEOs make very bad decisions in the decade or so after Apple switched to Intel. But before then, Intel was the world leader in logic chip manufacturing. 

    Maybe you’re the kind of person who wants America to fail, but I want to see a once great American company rise again.
    Intel had tremendous ego and helped kill the PPC architecture. Steve knew Andy Grove and was a friend, but professionally, he didn’t think Intel processors were appropriate to put into Macs. It was IBM’s constant delays of faster processors that forced Steve into using Intel. 

    The latest smear campaign by Intel happened when Apple started using its ARM based processors showed that if Apple didn’t change its course, Intel would go scorched earth and destroy whatever goodwill that was created when Steve went all in with Intel. 

    They deserve to be kicked to the bottom until they change their tune. 
    h2p
  • Reply 10 of 31
    Typo at the end of the headline. You mean Better not “Batter”.
    edited April 26
  • Reply 11 of 31
    dewmedewme Posts: 5,473member
    When you’re talking about culture within a company you have to ask “Who is establishing the culture within the company?” In my opinion it is usually the CEO. If you take a step back and look at how a lot of the most successful technology companies in the world were established you’ll see a lot of engineers, scientists, inventors, visionaries, and entrepreneurs who actually “touched” the products they brought to the world. What mattered to them in the current was to do whatever it took to get their product to market knowing they’d done everything within their power to ensure that it would be something they were proud to ship.

    If contributing to the product’s probability of success required 12+ hour days for 7 days a week for many weeks, that’s what you did. Having a CEO who believes in doing whatever it takes today to reach the goals, including time and quality goals, is a major influence on a company’s culture, especially when the CEO and corporate leaders are right there too putting in the work in a hands-on capacity that’s appropriate to their roles. But they need to understand and appreciate the value of the technology and product, how it’s made, and what it delivers to customers.

    In other words, the culture of the most successful technology companies emphasizes bringing great products to market, not just to make a lot of money. If you deliver great products the money will follow. But delivering great products requires a lot of work. In my opinion, when technology companies were led by technologists and visionaries who totally understood the value of doing the work the right way, they had all of the critical pieces in place for continued success. They also learned how to improve and optimize how they did the work. TSMC is a prime example of how this model works, as were companies like Intel, Motorola, GE, Boeing, and Apple in their early days.

    That was then, and now is now. Today the culture of most companies emphasizes bringing great financial value to investors and shareholders, whatever it takes. Goodbye to the engineers in CEO roles. Hello to the money men/women running the company. Sure, the product still has to be great, but doing the work is nowan overhead process and cost that can be farmed out to the lowest qualified bidder. No deep domain expertise needs to be grown inside the company, just go out buy it.  Of course the degree and extent to how this money driven culture is embedded varies from company to company. Apple seems to maintain enough focus on the engineering aspects of what they do to ensure that those who are doing the work have Apple engineers working alongside them. Apple has certainly outsourced a ton of their product manufacturing capabilities, but at the same time they’ve pulled in significant critical pieces like Apple Silicon so as not to be dependent on another supplier they cannot totally control.

    Does Apple have a predominant product driven culture or profit driven culture? I think it’s still up in the air. One could argue that the change in command from Steve Jobs to Tim Cook marked a transition point from one to the other. But I also believe that Steve Jobs picked Tim Cook because he knew Tim would not totally succumb to the profit mongers and would keep the product culture alive and well, at least to the extent that is possible given the current nature of how products are dependent on global influences. The TSMC struggles in Phoenix don’t elicit a lot of confidence in the US’s ability to reset its cultural focus from profits and financial success back to one of producing great products that we’re proud of. We’ve moved on to a “Show me the money” culture in the workplace while TSMC is still focused on doing the work to reach goals, no matter the personal sacrifices required. Maybe we’ll eventually land on something in the middle, but my hopes are not high.
    h2p
  • Reply 12 of 31
    thttht Posts: 5,530member
    rob53 said:
    blastdoor said:
    I’d love to see intel regain the process lead and win apples foundry business. 
    Why? Intel was always slow to improve their products. They always run hot as well. 
    blastdoor is just saying that if Intel can regain the fabrication lead, he'd love it if Intel can fab Apple Silicon. He's not saying Apple will be using Intel designed processors. That is exactly what should happen. If Intel has the best fabs in the world, Apple should contract them to fab Apple Silicon, assuming the (cost x Watt)/mm2 all work out.

    Intel plans on catching up and passing TSMC. We all know what happens to plans, so probably not. But, Intel as a second source manufacturer of Apple Silicon isn't a bad idea either, or Samsung Semi. It would require Apple to sell more products, so long road to go on that.
    muthuk_vanalingamh2pblastdoor
  • Reply 13 of 31
    doggonedoggone Posts: 385member
    blastdoor said:
    I’d love to see intel regain the process lead and win apples foundry business. 
    Seriously.  Intel have been falling over themselves to screw up.  They've relied on the old X86 business to keep themselves going.
    h2pronn
  • Reply 14 of 31
    DracoDraco Posts: 44member
    "Engineers endure 12-hour workdays and often work weekends as well."

    There's a reason manufacturing of semiconductors and other goods have moved to Asia. There are way more engineers available in Asia; these are needed in large numbers to run a modern factory. Engineers in Asia work longer hours without complaint, so no surprise TSMC is finding American engineers difficult to work with. 
    h2p
  • Reply 15 of 31
    mobirdmobird Posts: 756member
    dewme said:
    ...If contributing to the product’s probability of success required 12+ hour days for 7 days a week for many weeks, that’s what you did. Having a CEO who believes in doing whatever it takes today to reach the goals, including time and quality goals, is a major influence on a company’s culture, especially when the CEO and corporate leaders are right there too putting in the work in a hands-on capacity that’s appropriate to their roles. But they need to understand and appreciate the value of the technology and product, how it’s made, and what it delivers to customers...
    I had the opportunity to observe first hand from my parent's home the literal start-up of Federal Express (FedEx). My Dad was employee #30, started working while FedEx was still in Little Rock, Arkansas before moving to Memphis. He came from being a corporate pilot with Warner Brothers, happened to have the most flight time in the Dassault Fan Jet Falcon 20 that was the original aircraft used by FedEx.
    Many stories, the books and movies that could be made...I still have many boxes of my Dad's efforts that contributed to the start-up and the take-off of FedEx.

    As @dewme mentioned "If contributing to the product’s probability of success required 12+ hour days for 7 days a week for many weeks, that’s what you did."

    In the case of FedEx, it was years of the efforts he mentions.

    When my Dad retired, he was flying the DC-10 on the international routes. Chief Pilot/VP of Flight Operations, and held the Pilot Seniority position of #1.
    dewmethth2p
  • Reply 16 of 31
    Draco said:
    "Engineers endure 12-hour workdays and often work weekends as well."

    There's a reason manufacturing of semiconductors and other goods have moved to Asia. There are way more engineers available in Asia; these are needed in large numbers to run a modern factory. Engineers in Asia work longer hours without complaint, so no surprise TSMC is finding American engineers difficult to work with. 
    A few years ago I saw the documentary ‘American Factory’ about a Chinese organization trying to start a car glass factory in America. Without judgement the filmmakers showed the huge culture clash that happened. Beautiful movie, and the unavoidable  bafflement from both sides carefully shown. Can’t help thinking this is the same dynamics. 
    h2pdewme
  • Reply 17 of 31
    h2ph2p Posts: 331member
    rob53 said:
    It doesn’t surprise me there’s a culture clash in Arizona, especially in today’s rancid political environment. A decade ago we would have welcomed TSMC like we have welcomed Japanese automakers. Not any more and it’s not TSMC’s fault. 
    I am very excited to see chip manufacturing in the United States… and I don’t see this as a political issue as you do. 

    Apparently, the culture clash of the 80s and 90s with Japanese auto makers is still alive in the Chinese/American manufacturing sector.  

    In those decades, my very good friend, was the American plant manager for a large Japanese OEM brakes manufacturer based in the Midwest. He was considered junior to the most junior Japanese manager. He managed the American employees. Pretty much like clockwork, they would start meetings on Friday at 5 PM and pull out the alcohol - drink their way through meetings till 9 PM. Often speaking only Japanese. It was pretty rough, but he never had any kids so he could pull long hours. 

     I am very concerned that the American work ethic may not live up to the Taiwanese Chinese work ethic. I believe it’s a fact of life that Americans are not as “hungry” as the Taiwanese are. Sounds like there will be substantial give-and-take to make this work.

    Do you agree? What sort of compromises will have to be made? TSMC’s corporate culture will have to deal with US labor laws, among other obstacles.

    ps. The Japanese managers were mostly limited to three year stents inside the United States so they wouldn’t become too Americanized. They built a Japanese school for their kids to go to.
  • Reply 18 of 31
    blastdoorblastdoor Posts: 3,367member
    tht said:
    rob53 said:
    blastdoor said:
    I’d love to see intel regain the process lead and win apples foundry business. 
    Why? Intel was always slow to improve their products. They always run hot as well. 
    blastdoor is just saying that if Intel can regain the fabrication lead, he'd love it if Intel can fab Apple Silicon. He's not saying Apple will be using Intel designed processors. That is exactly what should happen. If Intel has the best fabs in the world, Apple should contract them to fab Apple Silicon, assuming the (cost x Watt)/mm2 all work out.

    Intel plans on catching up and passing TSMC. We all know what happens to plans, so probably not. But, Intel as a second source manufacturer of Apple Silicon isn't a bad idea either, or Samsung Semi. It would require Apple to sell more products, so long road to go on that.
    Exactly 
  • Reply 19 of 31
    blastdoorblastdoor Posts: 3,367member
    Draco said:
    "Engineers endure 12-hour workdays and often work weekends as well."

    There's a reason manufacturing of semiconductors and other goods have moved to Asia. There are way more engineers available in Asia; these are needed in large numbers to run a modern factory. Engineers in Asia work longer hours without complaint, so no surprise TSMC is finding American engineers difficult to work with. 
    If a job requires humans to act like robots, then robots will eventually replace humans in that job. 

    The reason a "modern factory" requires a large number of "engineers" is that in China, production technology assumes a large number of poor, desperate people willing to be worked to death. As the Chinese population shrinks to 500 million by the year 2100, the production technology will change to rely more heavily on actual robots, not humans treated like robots. In other words, China will become more like the US and Europe. 

    The result will not be a huge increase in prices, but rather a lowering of corporate profits. 
  • Reply 20 of 31
    jimh2jimh2 Posts: 639member
    blastdoor said:
    I’d love to see intel regain the process lead and win apples foundry business. 
    Why? TSMC is why Apple could switch and Intel was why they had to switch chips. American workers are lazy compared to foreigners. There is no chance Intel will ever catch up to TSMC.
Sign In or Register to comment.