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TSMC sued for race and citizenship discrimination at its Arizona facilities
(www.tomshardware.com)
this post was submitted on 14 Nov 2024
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Because if you break down the cost to unit economics, the two biggest pieces of the pie are profit and overhead. If the price of processors cannot go up, the pie needs to be adjusted for the workers. TSMC claims that in Taiwan it averages $76K USD yearly per worker, a country where the average wage is $21k. So roughly this translates to the employee mix for TSMC being 3x more expensive than the average wage. In the US this translates to $59k USD population average to $177k USD TSMC average, which is 2.3x the cost. So now you have to shift that pie to be less profitable or cut into overhead. Some share of overhead is actually executive perks/salaries/inefficiency so we get into the agency problem. Some share of overhead is the maintenance of favorable political connections which are more expensive in the US. Some share of overhead is maintenance on loans for capital expenses such as the buildings, machines, training, etc. Profit is obvious why it can't be cut. They demand the same or increasing rates of profit.
This also assumes that the output between the two countries is comparable which is not true due to workforce mix and may never actually be true due to labor laws and cultural expectations of workers.
This doesn't get into the more complex financial realities like, training and retaining a workforce who has no experience fabbing chips, the differences in work culture and expectations of workers between the two countries, etc.