Mon. Apr 22nd, 2024

Prof. ST Hsieh

Director, US-China Energy Industry Forum


[email protected]

July 20, 2023

The US is facing many challenges, but the simple minded and shorted politicians are the main problems. They focus on winning elections so they sugar-coated their messages to the voters and make-believe that money can get “everything” instantly. Biden Administration has no fiscal discipline but initiated many mega-projects without any practical plan to complete those projects. But no matter, by the time when those projects were supposed to complete, Biden will not be in the office anymore. All the wasted money? Not a problem for Biden, it is merely a number added to the US national debt!

Lack of skilled workforce is nothing new for the US, after Soviets shocked the US with their space program in the 1950’s the US set up the National Science Foundation (NSF) and National Aero-Space Administration (NASA), revamped the education program focused on STEM. The US landed on the moon in 1969 with most of the in-house scientists and engineers. It was a success because politicians then allowed scientific and technical professionals to run these programs.

However, the US education system has not produced sufficient number STEM students for a long time. It is not news, rather why the US, after all the investments and policy encouragement, now we are still behind the curve?

So lack of skilled workforce is nothing new and if anyone is “surprised” by TSMC’s delay announcement should blame their own ignorance. Further, there is no guarantee that, after TSMC’s plant in Arizona started production, it would be profitable or sustainable.

Some local politicians’ concern about the tight US job market is completely off base. A modern technology industry depends on a skilled and supplicated workforce, plus able management. Biden’s approach to build a robust chip industry by throwing billons dollars without a “plan” is doomed.

Importing and transporting a foreign skilled workforce to the US is no guarantee of success at all. This workforce is highly educated human beings and not robots, they have to be comfortable living in the US with families. Just look around, is the US society safe and friendly to foreigners?

TSMC Delays Arizona Chip Output to 2025 on Worker Shortages

Debby Wu and Olivia Tam

Thu, July 20, 2023 at 12:08 AM PDT

(Bloomberg) — Taiwan Semiconductor Manufacturing Co. said production at a planned facility in Arizona will be postponed from late 2024 until 2025, an ominous delay as Washington tries to establish a more robust chip industry.

Chairman Mark Liu said there are several challenges that TSMC faces at the US facility, including a shortage of skilled workers and expenses running higher than in Taiwan. The company is shifting some employees to Arizona to help with the development.

“We are working on improving this by sending skilled technical workers from Taiwan to the US,” Liu said on a conference call after earnings.

President Joe Biden’s administration has made development of domestic chip production a top strategic priority, backed by subsidies in the Chips Act that may top $50 billion.

TSMC made the remarks as the company reported financial results for the second quarter and cut its outlook for revenue in 2023. The company, which makes chips for Apple Inc. and Nvidia Corp., projected a 10% decline in US dollar terms this year, compared with guidance for single-digit declines previously.

ASML Holding NV, the leading producer of chipmaking equipment, warned that politicians seem to be underestimating the complexity of building new fabs. While governments from Washington to Beijing to Berlin want to create domestic chip capabilities, such production is complicated and requires deep expertise.

“People don’t seem to realize that when we start building those fabs across the globe now and are everywhere, that skill has been refined over the last couple of decades in only a few places on the planet — predominantly in Taiwan and in Korea and a bit in China,” said Peter Wennink, chief executive officer of ASML. “Getting access to the requisite skills and skilled workers to keep the construction plan on time is a challenge.”

–With assistance from Adrian Kennedy.

TSMC’s Arizona Delay Poses Risk to Biden’s Push for US-Made Chips

Jenny Leonard and Mackenzie Hawkins

Thu, July 20, 2023 at 2:58 PM PDT

(Bloomberg) — President Joe Biden risks a major setback to one of his signature legislative achievements after Taiwan’s biggest chipmaker said it was forced to delay production at its marquee project in Arizona, a key battleground state in next year’s election.

As part of its so-called Bidenomics push, the administration has focused on bringing jobs back to the US, particularly in high-tech manufacturing like semiconductors, by doling out billions in subsidies and tax breaks. Taiwan Semiconductor Manufacturing Co., the world’s leading chipmaker, in 2020 committed to building a $12 billion facility outside Phoenix with the goal of making high-end semiconductors on American soil by late 2024.

The company announced on Thursday that it won’t start production at the Arizona plant until 2025 — after the US presidential elections — and cited the lack of a skilled labor force as well as costs in America as reasons for the postponement.

That doesn’t bode well for Biden, who is criss-crossing the country in an attempt to convince skeptical voters that he deserves a second term principally because his signature policies will juice their local economies. It’s not clear what would happen to the subsidies under a new administration, though congressional support for the program is strong and bipartisan.

While many early projects spurred by Biden’s industrial policy, particularly in the electric vehicle and clean energy sectors, are in Republican bastions, the TSMC plant is in a battleground state former President Donald Trump carried in 2016 and Biden flipped in 2020.

White House Deputy Press Secretary Olivia Dalton told reporters Thursday the administration is confident the workforce development included in the CHIPS and Science Act “will enable us to ensure that we have the workforce we need.”

The news of TSMC’s production delay also sparked concern in Washington where Arizona lawmakers had more questions than answers.

“I’ve got to get more details about why they’re behind schedule but I don’t think it’s a bad omen,” said US Representative Debbie Lesko, who represents north Phoenix where the TSMC facility is being built.

US Senator Mark Kelly, an Arizona Democrat, said he is worried but realizes that “big programs often result in this type of delay.”

Republican political consultant Marcus Dell’Artino, who works in Phoenix, said he was not surprised that the chipmaker was having problems finding workers given the tight labor market in the area.

Nobody is shocked that they are having problems getting workers,” he said. “Everybody in Arizona who is operating a business is suffering from the same problem. Finding trained individuals quickly isn’t as easy as putting out a Help Wanted ad. There’s so much more competition for workers.”

He said that the explosive growth in the Phoenix area has brought an influx of new residents, but they’re driving up housing costs, which could make it harder to recruit more people to the area. That’s even tougher for a highly trained field like chipmaking, he said.

The fact that nobody saw this problem coming, that’s more shocking,” he said.

“I thought it was on track,” said Arizona Representative Raul Grijalva. “It’s not just a surprise. It’s a sense of disappointment that we’re finding ourselves with these last few days, questioning something that was perceived to be on track.”

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