Taiwan’s Problem: Too Few Engineers
Engineers like Royale Lee, 31, are one reason Taiwan is the world’s biggest contract producer of the microchips that power electronics.
When a computer virus paralyzed machinery at his employer, Taiwan Semiconductor Manufacturing Company, Mr. Lee worked a 48-hour shift to help fix the problem. For years he responded to phone calls day and night. But in late 2021, after five years of sacrifices, he had come to fear the ring of his phone. His annual compensation of $105,000, an envied sum in Taiwan, was not enough for him to stick around.
Over the past decade, TSMC, as the company is known, has built a wide lead over rivals like Intel and Samsung in the race to make the smallest — and fastest — microchips. Largely because of the ingenuity of its engineers, TSMC has become one of the most geopolitically important firms in the world.
Today, many at the top of Taiwan’s semiconductor industry fear the tiny island territory will not be able to sustain the growing demand for a new generation of engineers. A shrinking population, demanding work culture and an abundance of competing tech jobs have meant workers have become ever more scarce.
The stakes are enormous. Some military strategists argue that TSMC’s dominance in microchips provides Taiwan a guarantee against an invasion by China — because the United States would need to defend such an important piece of its supply chain.
Taiwan’s talent crisis is intertwined with TSMC’s success. The company’s employee count has grown almost 70 percent over the past decade, while Taiwan’s birthrate has plummeted by half. Start-ups in promising fields like artificial intelligence are luring top engineers. In recruiting, TSMC must compete with internet companies like Google and foreign semiconductor companies like ASML of the Netherlands, which generally offer better work-life balance and perks like free food.
TSMC’s leaders have defended the company’s famously tough work culture, which has helped it grow into a $440 billion behemoth with 73,000 employees. But in recent years, TSMC Chairman Mark Liu has repeatedly acknowledged that the largest challenge facing Taiwan’s semiconductor industry is its shortage of talent.
TSMC has been forced to adjust its recruitment strategies. It has broadened hiring channels and increased its base salary for master’s graduates, who can now expect to receive an average annual compensation of up to $65,000. It begins recruiting Taiwanese graduate students in September, well ahead of the conventional job-hunting season of March, and has begun to cultivate high schoolers with online classes about semiconductors.
The challenges facing Taiwan’s chip industry come amid a global crunch. In China, where officials have sought to lure Taiwanese engineers to build up its fledgling chip industry, the statebacked Chinese Academy of Sciences has fretted about a “serious shortage” of qualified workers. By one estimate, China’s microchip industry was short 200,000 people.
In the United States, government efforts to use billions of dollars in subsidies to attract semiconductor plants have spurred Intel, Samsung, TSMC and others to announce plans for new plants. But surveys of executives showed talent shortages remain a problem.
At TSMC, the recruitment gap back home has added urgency to its efforts to build factories, and train workers, outside Taiwan. Unlike most major hardware companies, which long ago spread research and production across the world, TSMC has built the vast majority of its chip manufacturing plants, known as fabs, in Taiwan. The clustering of its best employees and suppliers has helped it over the years, but the company needs to start looking beyond Taiwan, according to Willy Shih, a professor at Harvard Business School.
Mr. Lee, who now works as a web developer for an American firm, said younger Taiwanese are less willing to endure the grueling experience of working in a fab.
“It’s no longer as glorious as it used to be,” he said.