Taipei, Feb. 5 (CNA) Higher production costs and differing work cultures are unlikely to be decisive in the success or failure of Taiwan Semiconductor Manufacturing Co.’s (TSMC) expansion into the United States, according to “Chip War” author Chris Miller.
In a recent interview, Miller, an associate professor at Tufts University’s Fletcher School of Law and Diplomacy, told CNA that while Taiwan’s successful “model” in the chip industry is unlikely to be reproduced, Taiwanese companies still have to globalize their production in order to remain competitive.
To that end, TSMC has launched plans to build plants in Dresden, Germany, the U.S. state of Arizona, and Japan’s Kumamoto Prefecture.
Of those, the Arizona project in particular has faced a string of setbacks, including higher-than-expected costs, complaints by U.S. employees of a “brutal” corporate culture, and construction delays on both of the factories it is building.
Despite these challenges, Miller disputed the notion that there is anything uniquely difficult about building chips in the U.S., noting that Samsung and Texas Instruments both operated profitable plants there.
Intel has also built chip plants in the U.S., and while they have had problems recently, those have mainly been related to design rather than construction, he said.
In terms of workplace culture, Miller noted that leading countries in chip production — beginning with the U.S. in the 1950s, then Japan, and now Taiwan and South Korea — have always touted their respective work culture as being the best suited for the industry.
“It seems to me that the chip industry shifts too rapidly to have culture be a really effective explanatory factor,” Miller said.
Rather, in order to succeed, the onus is on companies to make sure that their work culture fits, or is capable of “assimilating,” in different geographies, he said.
Miller was also skeptical of the argument that higher production costs in the U.S. would prove a major obstacle.
“TSMC’s success internationally has not been due to cost efficiency. It’s been due to better technology,” he said.
“I think over-focusing on cost underestimates what makes the Taiwanese workforce so effective,” which is related not to low wages but the fact that they are highly skilled, he said.
Overall, Miller said he was waiting to see how TSMC worked through other challenges related to its U.S. expansion efforts, including making the Arizona facility work within its broader business.
As it does so, TSMC, as well as competitors Samsung and Intel, are all likely to receive assistance in the form of billions of dollars in U.S. government subsidies, stemming from the 2022 CHIPS Act, Miller said.
