"Samsung, SK Hynix Face Same Struggles" Why TSMC Is Sighing After Pouring Billions Into the U.S. [Taiwan Chip Dispatch]

Up to 157,000 Technical Workers Needed by 2030
Hiring Crunch Worsens for TSMC and Samsung Factories in the U.S.
Labor Conditions Gap and Low Industry Entry Rates Identified as Key Causes

The world's largest foundry (semiconductor contract manufacturing) company, TSMC, is facing mounting challenges. Despite being pressured by U.S. President Donald Trump’s aggressive investment demands and unprecedented subsidy promises—leading the company to bet astronomical funds on expanding its U.S. plant—TSMC now finds itself at risk of the entire project being jeopardized due to a lack of available workforce to operate the facility.Samsung Electronics and SK hynix, which are also expanding their local operations, have seen warning signs of recruitment difficulties as well.

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According to a report by global consulting group McKinsey, cited by Taiwan’s Economic Daily News on July 11, the pure construction cost—excluding equipment—for building a standard semiconductor fabrication plant (fab) capable of producing 40,000 wafers per month is at least twice as expensive in the United States as it is in Taiwan. Furthermore, while it takes just 12 to 16 months from groundbreaking to initial commercial production in Taiwan or China, the same process takes 24 months in the United States due to stricter regulations and labor shortages.

McKinsey found that about 50% of the cost gap between Taiwan and the United States is attributable to labor costs, with three-quarters of that gap resulting from higher wage levels in the United States. This is one of the reasons it is difficult to implement Taiwan’s 24-hour shift operation system in the United States.

The problem is that even securing such expensive labor in the United States is increasingly becoming a near-impossible task. The full-time technical workforce gap in the U.S. semiconductor sector is estimated to reach up to 157,000 people by 2030. This far exceeds earlier projections by major institutions, which previously forecast a shortage of 100,000.

Taiwanese media pointed out, “About 74% of the shortage is concentrated in manufacturing-related positions, with three-quarters of surveyed companies experiencing significant difficulties in recruiting engineers. TSMC's Arizona plant in the U.S. has already suffered multiple construction delays due to a lack of skilled engineers.”

The regions expected to face the most acute labor shortages are Texas, California, Arizona, New York, and Ohio—all sites where large-scale new semiconductor fabs are either under construction or planned. TSMC is investing up to $265 billion (about 399 trillion won) in Arizona to build more than 10 production and packaging facilities, while Samsung Electronics is pouring $37 billion (about 56 trillion won) into its Taylor foundry plant in Texas. Additionally, Micron’s memory fab in New York ($100 billion), Intel’s plant in Ohio ($28 billion), and SK hynix’s advanced packaging facility in Indiana ($3.8 billion) are all affected by the labor shortage.

The Taiwanese outlet explained, “This shortage of technical talent is expected to have a direct impact on the large-scale U.S. investment plans of global semiconductor giants. On top of this, construction cost increases caused by rising prices of key raw materials such as copper, steel, and cement are also adding to companies’ burdens.”

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The core reason for the labor shortage is cited as the low entry rate of U.S. engineering students into the semiconductor industry. Only about 3% of U.S. engineering graduates choose the semiconductor sector, with the majority heading into software fields such as artificial intelligence (AI), which offer better compensation. Although the U.S. government has recognized the seriousness of the situation and declared it will invest $200 million (about 301.4 billion won) in semiconductor workforce development by 2027 through the CHIPS Act, it remains uncertain whether this will reverse the trend.

McKinsey warned, “If the situation persists, the effectiveness of both corporate investment and federal subsidy policies could be undermined.” The report recommended that the government provide long-term operational subsidies to ensure semiconductor companies operating in the U.S. can continuously offset electricity and labor costs. As a model case, Germany was cited: the country offered TSMC, which established its European production base there, subsidies amounting to about half of the plant investment—5 billion euros (about 7.2 trillion won)—and is known to provide subsidies proportionate to wafer production volume.

Taiwan Economic Daily News = Reporters Liu Zhongyong and Yin Huizhong / Translated by The Asia Business Daily

*This column is published as part of a strategic partnership between The Asia Business Daily and Taiwan Economic Daily News.

This content was produced with the assistance of AI translation services.