I have a friend in Taiwan who works as an engineer for an LED manufacturer. He makes about 2K USD a month. I don't think anyone would even clean toilets for that much in the US. US salaries are just not globally competitive.
And yet salaries in the US are sustained. To me it looks like the issue is that while we know how to start companies and have VC capital, we don't know how to outsource well (even with all the local immigrants)
> He makes about 2K USD a month. I don't think anyone would even clean toilets for that much in the US.
Do you mean to say that's low pay or high pay compared to the US?
In the US, 2k USD a month would barely be enough to rent a small apartment, let alone pay for utilities and groceries. You'd be left homeless or starving.
The majority of Americans of all races and genders earn above $15 an hour [0]
Taiwan's average wage (so skewed upwards) was ~$22k a year in 2023 [1]. That was an 8 year high btw - wages have been much lower.
Lots of White Collar Taiwanese would move to Mainland China for that reason - they'd earn similar if not higher salaries in Mainland China AND not pay income tax.
Basically, OP's point is that companies don't optimize for wages alone (and I can attest to that having hired abroad, and helped move the operations of a former employer to Israel+India from the US).
Even TSMC's founder admitted that:
On a podcast hosted by the Brookings Institution last year, Chang lamented what he called a lack of “manufacturing talents” in the United States, owing to generations of ambitious Americans flocking to finance and internet companies instead. (“I don’t really think it’s a bad thing for the United States, actually,” he said, “but it’s a bad thing for trying to do semiconductor manufacturing in the U.S.”) [2]
About your last paragraph, how does Intel and Global Foundries (IBM and AMD) do it well? It sounds like moaning from a senior business person wants easy mode. This is a new step in TSMC's history: expanding manuf'ing overseas. I am curious how the new TSMC plant Japan will do.
> how does Intel and Global Foundries (IBM and AMD) do it well
They don't execute as well as TSMC or Samsung, but they're able to do it largely because they're too big to fail and they Defense related subsidizes (eg. Both Intel and GlobalFoundaries got $3Bil from the DoD for manufacturing Secure Enclave chips along with the CHIPS money).
Also, you don't need to be leading edge for most defense applications. i7 processors tend to be the norm for plenty of Western defense applications and don't need a sub-7nm type process that Intel/Samsung/TSMC are competing over.
The issue is companies like Samsung and TSMC would get a large amount of state subsidies, while the US only started getting back into that game in 2022-23.
TSMC began building the Chandler plant before they got the subsidizes needed to make it even more worthwhile.
> curious how the new TSMC plant Japan will do.
Probably pretty decent. Japanese and Taiwanese work culture is basically the same so they won't have to deal with labor unions or getting complaints about overwork.
I remember hearing a lot of the American workers hired by TSMC Chandler ended up leaving for Intel Chandler for that very reason.
Basically, TSMC wanted to replicate the exact kind of work and management culture that exists in Taiwan (eg. Long hours, dictatorial managers, power politics, relatively low wages, little to no stock compensation, etc)
I have no knowledge of this field, but my naive question would be, wouldn't building such advanced products involve so much more automation relative to number of human workers, that the salary of workers doesn't affect the cost that much?
> the salary of workers doesn't affect the cost that much
It doesn't and that's why Intel still has foundaries in Oregon and Arizona.
The difference is TSMC's leadership doesn't want to play ball with American work culture and wants to keep pushing the 996 mentality (yes, even Taiwan has an extreme overwork and underpay problem).
The Foundary space is a very low margin industry. There's a reason why the only companies left are TSMC, Samsung, Intel, and GlobalFoundaries.
While the TSMC plant in Chandler has been plagued with bad press, the Intel plant right next door has been expanding with almost no hiccups.
And yet salaries in the US are sustained. To me it looks like the issue is that while we know how to start companies and have VC capital, we don't know how to outsource well (even with all the local immigrants)