Sometimes your opponent can outspend you at every step and is possibly more motivated to achieve its goals. For China this is a far more pressing matter than profit, you might even see it as desperation. So this is like wrestling a bone from a hungry dog's mouth.
On the other hand TSMC is a publicly traded company. There's a limit to what expenses they can justify in front of the shareholders. China can lure engineers away with 3x the salary probably because that was the limit TSMC settled on, not because that's the limit of what China is willing to pay.
I agree with you and I don't understand how salaries are exempt from the normal capitalism dogma about supply and demand.
If I go into a supermarket and the bananas are too expensive then I can either pay or not eat a banana. If salaries are increasing companies can either pay market rate or no.
(They can also train internally but that doesn't seem fashionable nowadays)
> salaries are exempt from the normal capitalism dogma
A nation state devoting their trillions to outbid companies is the exact opposite of capitalist dogma. (Even less capitalist than a monopolist conglomerate abusing their dominant market position to outbid/undercut you.)
Should the market also be protected from other unfair things, like venture-capitalist backed startups that operate at a loss poaching key employees from established firms?
It might be rare, but right now those engineers are super valuable, and are getting paid for it.
demand and supply.
you see the same thing happen with self driving engineers commanding million dollar packages because they were in such high demand and supply was so low.
They are super valuable now but their value will decrease as the Chinese semiconductor industry catches up, so it's not like TSMC will have to pay 2x the salary forever. However I know many people (not at TSMC) who would take a lower salary to work on green field projects.
What we're discussing is that it's hard for a company to pay the market rate when the competition is the CCP itself. The CCP would pay the equivalent of $20 million if it needed to - and what then?
I get the point that everyone is making, including the point that you're trying to make. But if I just take your question at face value, isn't the answer simple: from billions in profit they make per quarter.
So you want to drain your profit to match the salary? I would think it would cause issue with the shareholder and when you want to pay for other future non salary expense, but fine lets ignore that. But what if China simply offer more salary again ? Remember, china has way more money than TSMC or even the whole Taiwan.
Salary isn’t everything. I would pick a nicer place to work over one with the highest salary. Salary just has to be good enough so you don’t feel cheated or don’t get the opportunities you want in life.
this is a nation state vs a private albeit important company. 'compete' isn't a word i'd use here no matter the multiplier as it implies the game is fair.
It's an open market. TSMC is not a military organization to stop them from working for another country.