Taiwan Is Running Low on a Strategic Asset: Engineers

Royale Lee is a 31-year-old engineer who has helped Taiwan become the world's largest contract manufacturer of microchips, which power most electronic devices.

Mr. Lee worked a 48-hour day to fix a problem that a virus caused at Taiwan Semiconductor Manufacturing Company. He answered phone calls all day and all night for years. After five years, he was afraid of the phone ringing. The $105,000 he received annually, a sum envied in Taiwan, wasn't enough to keep him around.

TSMC has had a huge lead on rivals Intel and Samsung over the last decade in the race for the smallest and fastest microchips. TSMC is one of the world's most important geopolitical firms largely because of the inventiveness of its engineers.

Many in Taiwan's semiconductor sector fear that the island will not be capable of meeting the demand for new engineers. The shortage of workers is due to a shrinking population, a demanding work culture, and the abundance of tech jobs.

The stakes are huge. Some military strategists claim that TSMC’s dominance in the microchip industry provides Taiwan with a guarantee against a Chinese invasion -- partly because the United States will need to defend an important part of its supply chain.

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Taiwan's talent shortage is closely linked to TSMC's growth. Over the last decade, TSMC's workforce has increased by almost 70% while Taiwan's birthrate is down by 50%. Top engineers are being attracted by promising start-ups, such as those in artificial intelligence. In the recruitment of engineers, TSMC has to compete with foreign semiconductor companies such as ASML from the Netherlands and internet companies such as Google, who offer a better work-life and perks.

TSMC leaders defend the company's notoriously tough work culture that has helped it become a $440-billion behemoth, with 73,000 workers. Morris Chang, TSMC's founder, recently defended his military discipline. He said that spouses would fall back to sleep when TSMC called its employees into work at night. Mark Liu, the chairman of TSMC, has acknowledged in recent years that Taiwan's semiconductor sector is facing a talent shortage.

As of August, Taiwan's biggest job-search platform, 104 Job Bank had more than 33,000 listings in the chip industry. Last year, Taiwan's chip sector employed about 326,000 people, according to the government-affiliated Industrial Technology Research Institute.

TSMC was forced to change its recruitment strategy. It has increased the base salary of master's degree graduates to an average of $65,000 per year. It starts recruiting Taiwanese graduates in September, far ahead of the traditional job-hunting period of March.

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'Many firms are struggling to find candidates who can do the job,' said Burn Lin. He is a former vice-president at TSMC, and currently dean of National Tsing Hua University’s College of Semiconductor Research.

Lin stated that they were not picky when it came to talent. You don't have to be an electrical engineer or computer scientist.

The college that Mr. Lin leads is one of the four specialized schools for semiconductors established by Taiwan's government in 2021 as a response to industry players such as Mr. Liu, and Tsai Mi-kai (chairman of MediaTek), who called for action.

Tsai, Taiwan's President, stated that 'we are in a race against time' to cultivate semiconductor talent.

Taiwan's chip manufacturing industry is facing a global crisis. The Chinese Academy of Sciences, a state-funded organization, has expressed concern about the'serious lack' of qualified workers in China, where officials are trying to attract Taiwanese chip engineers to help build its fledgling industry. According to one estimate, China’s microchip sector was lacking 200,000 workers.

Intel, Samsung, TSMC, and other companies have announced plans to build new semiconductor plants in the United States as a result of government subsidies worth billions. Surveys of executives revealed that talent shortages are still a major problem.

TSMC's recruitment problem at home has prompted it to act quickly to establish factories and train workers outside Taiwan. TSMC, unlike most other major hardware companies that have long since spread their research and production around the globe, has built a vast majority of its chip-manufacturing plants (also known as fabs) in Taiwan. Willy Shih, a Harvard Business School professor, says that the company has benefited from the clustering of the best employees, suppliers, and cutting-edge facilities.

He said, 'If I was TSMC, I would get serious and find other places to get this talent.'

Wu Chih I, director of TSMC's Joint Research Center with National Taiwan University, stated that the success of TSMC is due to its highly-skilled and disciplined staff.

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Mr. Wu said that tech workers are now more interested in finding jobs that match their interests than chasing a paycheck, as was the case with his generation.

If you do not have a lot of financial pressure on you, you may choose to take a job that is less demanding, even though it will mean giving up a high-paying career in semiconductors.

Mr. Lee, a former TSMC worker, stated that younger Taiwanese were less willing to endure a grueling work experience in a fab.

It's not as beautiful as it once was, said Mr. Lee who is now a web developer at an American company.

Jason Chin of 104 Job Bank said that TSMC, and other chip manufacturers, will not be able to stop turnover without improving the working conditions.

This applies to both workers, like Mr. Lee, who have to keep plants running and to researchers who are constantly looking for new ways to produce chips faster.

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Frank Lin, a 30-year-old TSMC researcher, left the company because he felt that his work was tedious and unfulfilling. He was not under as much pressure as other employees, but still struggled to find meaning in his work. He was not given much responsibility, even though he held a master's from one of Taiwan’s most prestigious institutions.

"Is this the only thing there is to living? Even though my income continues to grow, is that all there is?" He remembered often thinking about this while sitting in the sunlit pantry of his office. He left the company after less than three years to become an independent financial advisor. He hasn't turned back. People want to be their own boss. He said that there are many opportunities in the world outside.