REUTERS/Jonathan Ernst
- TSMC says the opening of its Arizona chip factory has been delayed due to a shortage of skilled workers.
- The company says it needs to bring Taiwanese workers to Arizona to get construction back on track.
- An Arizona union says US jobs are being threatened — and is urging lawmakers to deny the workers' visas.
Who knew that building a chip factory in Arizona could be the source of so much drama?
To get the construction of its Arizona chip factory back on track, Taiwan Semiconductor Manufacturing Company says it needs more workers with the expertise and skillsets that Americans don't have. Since June, the company has been in discussions with the US government about receiving accelerated non-immigrant E-2 visas for as many as 500 Taiwanese workers.
Not everyone's happy about this potential development.
The Arizona Pipe Trades 469 Union, a labor union that says it represents over 4,000 pipefitters, plumbers, welders, and HVAC technicians, has started a petition to urge US lawmakers to deny these visas. The petition says that TSMC has deliberately misrepresented the skillset of Arizona's workforce. By approving TSMC's visa requests, a union website says lawmakers would be laying the groundwork for "cheap labor" to replace American workers.
The dispute marks the latest development in the US's race to build a presence in the semiconductor-chip industry — something that's become a major priority as the world gets more reliant than ever on the devices that need chips to run. That includes devices as varied as smartphones, televisions, refrigerators, and washing machines. And should the US ever enter into conflict with China — something that looks increasingly possible — it wants to be self-sufficient when it comes to making chips.
Last summer, President Joe Biden signed into law the CHIPS Act, which included over $52 billion in semiconductor subsidies to boost chip manufacturing in the US and create American jobs. The legislation was among the reasons TSMC, the world's leading chipmaker, announced plans last December to build a second factory in Arizona.
But construction of TSMC's first Arizona factory, which began in the Phoenix area in 2021, has run into some hiccups. Initial plans were for the factory to open by late 2024, but in a July earnings call, the company said this would likely be pushed back to 2025.
The reason: US workers weren't cutting it.
"We are now entering a critical phase of handling and installing the most advanced and dedicated equipment," said TSMC chairman Mark Liu. "However, we are encountering certain challenges as there is an insufficient amount of skilled workers with those specialized expertise required for equipment installation in a semiconductor-grade facility."
Liu said the company planned to get construction back on track by "sending experienced technicians from Taiwan to train the local skilled workers for a short period of time" — these workers would join the undisclosed number of Taiwanese workers already in Arizona. But to do this, TSMC needs the US government to approve worker visas, something the Arizona union is trying to stop.
Given that TSMC is seeking billions of dollars in US subsidies via the CHIPS Act, the union says American jobs should be prioritized.
"Replacing Arizona's construction workers with foreign construction workers directly contradicts the very purpose for which the CHIPS Act was enacted — to create jobs for American workers," the petition read.
TSMC, however, has maintained that the incoming Taiwanese workers will not be a threat to any US jobs — and will only be there to support the construction process.
When reached for comment, TSMC said that any Taiwanese workers who come to Arizona will only be there for a limited timeframe and not impact the 12,000 workers currently on-site every day. It said its investment in Arizona is an opportunity to create thousands of high-paying jobs and drive innovation in the state and across the US.
"We have not replaced any of our local workers with foreign workers and continue to prioritize the hiring of local workers in Arizona," the company told Insider. "Our current focus is on recruiting local workers to fill electrical, process-related, sheet-metal, and welding positions."
The degree to which American workers can get the job done without additional assistance is up for debate. The union did not immediately respond to Insider's request for comment.
Other factors have contributed to the heightened tensions between TSMC and union workers. In June, The American Prospect spoke with workers who said injuries and safety violations were common on the construction site.
"It's easily the most unsafe site I've ever walked on," said Luke Kasper, a representative of the sheet metal workers union.
TMSC has denied these allegations.
When Biden announced in December that over 3,000 union workers would be helping to build the Arizona factory, TSMC founder Morris Chang reportedly said that this was "a little painful" to hear. In 2016, Chang said one of the key reasons companies such as Google, Amazon, and Facebook had been successful was that they didn't have unions.
The controversy in Arizona has even picked up steam back in Taiwan. On July 24, a Taiwanese Youtube channel with nearly three million subscribers posted a video accusing the Arizona workers of being lazy, a bilingual newsletter on tech, business, and US-Asia relations reported. Insider was unable to contact the administrator of the YouTube channel.
—Kevin Xu (interconnected.blog) (@kevinsxu) August 10, 2023
It's not clear when the US government will make a decision regarding the Taiwanese visas. In the meantime, construction on the factory continues.
Do you work in the semiconductor chip industry and have a story to tell? Reach out to this reporter at jzinkula@insider.com.
Update: August 14, 2023 — This story was updated after publication to include comment from TSMC.