Apple will soon receive 'made in America' chips from TSMC's Arizona fab
(tomshardware.com)484 points by rbanffy 4 days ago
484 points by rbanffy 4 days ago
The 'brain drain' (as you refer to it) stems from intelligent/motivated grads in the US for the last two decades (at least) pursuing more lucrative fields like finance and adtech (re: Google, Facebook). Or some pursue management route (attending big MBA schools and switching to management roles where they climb corporate ladder). In other words, there are not a lot of college/grad students who want to pursue traditional engineering routes in the US.
I myself was an electrical engineering (EE) major until I switched to computer science in my third (junior) year of college because like a friend of mine at the time told me, "<my name>, if you don't major in computer science, you will not be able to find a job easily after graduation". He was right. All of my former college friends in EE ended up pursuing programming jobs (a few of them now works for FAANG; I used to work for one but left a year ago due to RTO). That is why the US has no sufficient personnel to do traditional engineering jobs and we have shipped off a lot of those to foreign countries.
Everyone I know that was in EE falls into two camps basically:
1. Became web developers
2. Work in Defense or some other regulated industry that has protections from being outsourced to China
I'm a EE and had no problem finding a job and neither did any of my classmates in my EE program (early 2010s). I also didn't exactly go to anything approaching MIT, but it was an engineering school and I had a decent GPA. Particularly, there are a lot of well paying jobs in power systems with good work life balance. We have an energy transition going on, so that helps. Having an internship probably helped me too. I acknowledge that things might have broadly changed.
Is there a somber write-up anywhere as to the future of EE in the West?
Software jobs are more plentiful, sure, but you’re discounting the extremely high quantity of EE/CE jobs available at semiconductor companies (Intel, AMD, and many smaller ones) and companies like Apple. They don’t pay as well, but they can pay quite good over time and tend to be more stable than software jobs.
It's not even brain drain, America's dominance came from the fact that for nearly a century the brightest people in the world were willing to give up everything to come here. That is no longer the case. Today's Einstein probably isn't going to immigrate here.
That is still the case and no where else is even close.
https://www.statista.com/chart/30815/top-destination-countri...
https://news.gallup.com/poll/468218/nearly-900-million-world...
Einstein didn't emigrate to get rich, he emigrated because the Nazi's took over Germany. Germany had the best universities in the world before they took the path of self-destruction. So that was a second, separate event that helped America.
America stills gets a lot of immigrants.
For nearly a century Europe incinerated itself twice over.
> That is no longer the case.
For all I shit relentlessly on this country and its culture, it's still an extremely attractive place to live if you're well-situated to make money. (Most people are not—hence my contempt for how the society functions. This presumably DOES apply to an "Einstein", if indeed this Einstein wants money.) China still has a way to go in catering to and granting citizenship (or some amenable equivalent) to foreigners.
The US didn't win World War 2, break the sound barrier, or put a man on the Moon only or primarily due to immigrant workers. We scoured the country's public school system for the sharpest young minds, sent them to institutions of higher learning with rigorous curricula, and found them positions in industry, government, or the military which made good use of their talent. Fetishizing the "nation of immigrants" narrative at the expensive of the native-born Americans who actually built most of this country's prosperity is, at best, ahistorical.
Alternate explanation: electrical engineering is actually really hard and some parts of computer science look comparatively easier. Plus coding is startups is cool, EE is still nerd as in Nerd.
I studied both, can't say for sure EE was harder. Some courses in computer science were extremely hard for me (complexity, discrete math) and some courses in EE engineering were equally hard (most of the physics courses, analog circuits and more)
Both degrees can be made super hard, as hard as the school desires them to be...
Nah I did EE and then CompE (which was just replacing some later EE classes with hardware design stuff) and EE is not "actually really hard" - although people like to put it on a pedastel.
> I myself was an electrical engineering (EE) major until I switched to computer science in my third (junior) year of college because like a friend of mine at the time told me, "<my name>, if you don't major in computer science, you will not be able to find a job easily after graduation". He was right. All of my former college friends in EE ended up pursuing programming jobs (a few of them now works for FAANG; I used to work for one but left a year ago due to RTO).
Nothing against you looking out for your future, but this is exactly what I describe to people when I say the industry has changed. It used to be nerds who were very passionate. Now it’s full of people who are just doing a job.
Hit the nail on the head. I went to the College of Nanoscale Science and Engineering in Albany for a master's in "nanoscale engineering" which essentially boiled down to a master's in being a fab line manager. I finished the degree since it was only a 3 semester program and I was getting paid for research work, but almost immediately after chatting with alumns that went to go work at IBM/Intel/etc it was pretty clear that software engineering was a much more lucrative and less stressful career.
The jobs needed for chip manufacturing aren’t primarily EE. It’s largely chemical engineering with specializations related to semiconductor tech. EEs use the tools developed by fabs to make their products, but those are typically separate companies (or, in the case of in-house fabs like Intel, basically run as separate companies).
I suspect the kinds of salaries that's possible in Silicon Valley only happens because:
(A) Skills are fairly transferable. (B) There is a lot of employers competing for workers. (C) An awful lot of value is created along the way.
If you specialize in some tiny part of chip manufacturing, there aren't many places you can transfer your skills.
Even if, in the future, you have multiple chip vendors. They won't all use the same processes, and you might only fit into one role at each of these businesses.
Maybe it's not that simple. But few chip companies have to compete against startups for workers. And that probably won't change.
Not saying the jobs can't be well paid, just that it's not unlikely that it won't be absurd SV level salaries.
I think your explanation about large numbers of motivated students pursuing lucrative Non-STEM degrees is incomplete without mentioning the cost of an undergraduate and graduate STEM education in the USA.
The most critical shortages of STEM graduates are in roles requiring advanced degrees. Your median undergraduate education (~$40k) and median graduate education (~$60k) saddles students with approximately $100k in unforgivable student debt! Never mind the years lost that one could otherwise be working. So it’s no wonder students are motivated by the ROI of their degrees, it’s why I chose Computer Engineering over Electrical Engineering.
These are expensive STEM degrees which students on visas are all too willing to pay for a chance at a residency and a pathway to citizenship. So no wonder the majority of undergraduate and graduate STEM students are foreign born in the US. The ROI is not worth it for the debt. We don’t have enough need based scholarships available to finance the STEM graduates this country claims it needs.
Really appreciate this comment and perspective! In the larger context of immigration and brain drain in other countries, how the US also has one, but of a different kind. Ultimately, it's a loss of potential. I'd somewhat disagree with the directionality of the correlative/causal relation, though. But what can be said is that the US also experiences a knowledge drain towards plainly lucrative jobs. I'd wager that it was/is a cyclical effect that just worsened over the decades and that neither engineers moving to fintech nor low-paying engineering jobs were/are the sole reason.
My hot take as to the reason EE is a bit of a dead end in the US is that the options outside of the handful of primary employers are limited. It is very capital intensive to run a semiconductor fab, design chips or assemble electronics at scale. Therefore the employer has all of the leverage. The equipment and/or factory worker infrastructure comes first and the engineering teams are just a cog.
Compare that to having all the degrees of freedom as a computer science student to start up a niche mobile app or internet based niche service after working at FAANG for 5-6 years. Even AI infrastructure will eventually go down in price making niche AI first startups a possibility. In finance its the same, as a post i-banker you have the option to start a boutique fund, a niche fintech or just invest your own savings.
What you said seems contradictory. You open with the premise that intelligent youth go the finance / CS / MBA path instead of engineering and then say that those who do go into traditional engineering can’t find jobs. Couldn’t it be that people don’t go into engineering because there aren’t any jobs? Wouldn’t the lack of jobs explain the low salaries and thus the preference for more high paying alternatives?
Your argument doesnt really make sense : there are no EE jobs in the use, therefore no one wants to pursue EE jobs, therefire there are no EE jobs.
I read the main problem with hiring chip factory workers in Arizona was the factory just didnt pay enough for the long hours demanded. I looked up the median salary and its only 50k so I'm assuming it's not crazy skilled labor (e.g. brain drain). Taiwanese workers just seem more willing to do it.
I spoke to a Taiwanese person and apparently the salaries there are actually quite good, even by western standards (normal ones; not SF). The downside is they have very very long hours (996, barely any holiday, etc.).
It's also highly-skilled, yet very boring work. The way it was described to me is that every major piece of equipment has a PhD assigned to it and their job is basically to babysit the machine and troubleshoot when things go wrong.
US PhDs typically have other options and would consider this sort of work a waste of their time.
Even China has ruled 996 illegal in 2021: https://en.wikipedia.org/wiki/996_working_hour_system#Legal_...
No one should be forced to work those kinds of hours. It's unreasonable to call Westerners/Americans lazy if they refuse to work 996.
50k is/was recently a decent salary (not SF). In the last 5 years, not so much anywhere outside the absolute lowest CoL areas.
But yes, most Americans do not want to work on a death march. And employers don't want to pay it. I doubt they can argue 50k as exempt so that's a lot of overtime. They may as well be salaried 6 figures at that point.
50k is just a step above McDonalds these days in a lot of areas. Sure minimum wage might be $15k, but realistically nobody pays that little except in very rural areas (if you need a small number of low skilled employees a small rural town is a perfect spot to build - but if you need more than a small number they can't provide more at any price - you will pay more in the city but there are a lot more people around if you need more)
McDonalds in Sunnyvale CA starts at 20/h, so 41k/year for the lowest role
Perhaps - in California.
Median US Salary is $59,384. Half of workers make less.
...just seem more willing to do it
That's why manufacturing offshored in the first place, companies feel they're receiving better value for money on wages elsewhere for this kind of work (and these days not to mention more & larger facilities, proximity to component sources, and a strong ecosystem of supporting and complimentary facilities).
I think that's obviously a major part of it but it ignores other stuff like lax environmental and safety standards.
It would be interesting to see how much of the economic advantage of off-shoring is due to lower wages due intrinsic to lower cost of living vs stuff like ignoring/bribing foreign officials or non-existent environmenta/safety standards that objectively should exist.
Personally I won't mind paying more to buy manufactured goods. My mom told me that a pair of sneakers before the offshoring back in the late 80s usually cost more than $300 in today's dollars. Yes, it was expensive, but I would just buy fewer and use the one for longer time. The reason is that in the long run the manufacturing cost would get lower due to increased efficiency, and loss of supply chain is detrimental to the entire country - and our living expenses will increase overall. Case in point, how much tax do we have to pay and how much inflation do we have to suffer in order to build those super expensive weapons? Part of the reasons that we had $20K toilet and $100 screws is that we simply don't have large enough supply chain to offset the cost of customized manufacturing.
Besides, the US loses know-how on manufacturing, eliminating potentially hundreds of thousands of high-paying engineering jobs - it will also be a pipe dream that we can keep the so-called high-end jobs by sitting in an office drawing boxes all day. Sooner or later, those who work with the actual manufacturing processes on the factor floor will out compete us and grab our the cushy "design" jobs.
it’s mostly just baumol cost disease.
you can feel free to buy american, i don’t care so i would prefer if it were not mandated and you get your individual choice to pay more for your goods if you want
Easy to get better value on wages when you get to pay under the minimum wage of your home country. And/or aren't required to offer benefits, vacation. And are able to work them twice as long without overtime pay. And don't need to care about child labor laws.
To be blunt: yes, slavery is cheap, isn't it?
Cost of living can be a lot lower in Taiwan, if your property is already paid off.
Unfortunately housing is super overpriced, due to the Asian mentality resulting in high property ownership.
Real estate is always the monkey wrench in the gears of capitalism because of high necessity yet limited supply.
> Unfortunately housing is super overpriced, due to the Asian mentality resulting in high property ownership.
I have no clue what this means and in countries like Japan, housing is a depreciating asset vs. an investment, so…?
> Real estate is always the monkey wrench in the gears of capitalism because of high necessity yet limited supply.
This only happens when the government becomes captured by land owners to constrain the supply, since otherwise you can build up. But governments getting captured by land owners happens a lot.
The chips still need to fly back to Taiwan to be packaged as packaging partner Amkor's facility in Arizona won't be ready until 2027*. I'm not sure the cause of the delta but it could be in part because Fab 21 got back on schedule rather impressively following earlier delays.
* updated to reflect newer article that Amkor's facility is delayed beyond late-2025
The hardest part is making the chips, no?
Packaging facilities cost ~20% of a fab, right?
Naively, I'm assuming packaging is also not as complicate and difficult as fabrication.
Surely if they can build a fab in the US, they can build packaging facilities, too.
Rome wasn't built in a day.
> Shame they did not match each other in completion time.
Why?
If the packaging facility was ready early it would have sat idle losing money.
If it's ready late, products from the fab can obviously easily be shipped off to be packaged.
Tight coordination of timelines adds needless cost when there is an easy alternative.
Yeah definitely unfortunate. That said, I'm guessing the overall cost of overseas packaging is really tiny, otherwise Intel would've made a great customer since they are already packaging TSMC N6, N5, and N3 in New Mexico for their Arrow Lake CPUs.
Also a lot of US STEM grads have their skills wasted in unproductive fields, like the ad business.
the internet ad industry is raking billions from all over the world into the USA, how can you call that unproductive.
It's parasitic, not productive.
A tick can contain a lot of blood, doesn't mean it produced that blood.
Because is fucking undproductive, useless and detrimental to society. Advertising is a cancer, an immoral activity.
Stealing is raking billions every year as well, yet I wouldn't call it productive.
What makes you think pay is necessarily correlated to productivity?
Taken to the extreme, literal theft can pay well, and produces absolutely nothing.
Pay indicates the transfer of wealth -- it can be a heuristic for productivity, sure, but productivity is clearly not its only source.
I think about this quite often. What I'd really like to study at some point is: How much more does the receptionist at JP Morgan's head quarters make than the receptionist at Walmart's headquarters?
Because fundamentally I think there is an effect where the people in proximity to lots of money earn more. Obviously the Walmart receptionist and the JP Morgan receptionist are doing basically the same job. But the JP Morgan receptionist is surrounded by people who wouldn't think twice about doubling the receptionists pay and I would imagine that has a significant effect.
These companies hire all of these exemplary graduates and pay them so well because (1) they are flush with cash because businesses are essentially held hostage to adtech; and (2) so that they won't go out into the world and build systems that make them irrelevant, as smart people are wont to do from time to time. Someone on your payroll doesn't have the time nor the inclination to knock you from your pedestal.
Why else would Google need 182,000 employees? Or how about Facebook with 67,000? Microsoft clocks in at a whopping 228,000, and Apple at 161,000.
These are staggering numbers of employees. So many, in fact, that it would be an exercise in futility to try and manage so many for the number of products they offer, especially Google and Meta.
It's cheaper to make busywork than risk the cash cow.
Options traders are paid well. It's still unproductive.
You're just shifting around a bunch of numbers temporarily to make a bunch of money for someone and lose a bunch for someone else.
Lots of shit we do is well-paid and unproductive.
If, as a species, we eliminated all bullshit jobs, there's a good chance only 20-30% of the species would be working. Here in America, only around 50% of people are actually working. Everyone else is in school, or retired.
Back when American companies were offshoring, the initial start up teams were comprised of a lot of Americans who would do commissioning and initial ramp ups while training up the foreign workers. It's a lot easier to train people on a production line that is proven to work.
Fairly bad locations, average pay. It's not like the newer Japanese towns chip towns where you can get on a train and be in a proper city (ex. 40 min ride from Chitose to Sapporo), with okay pay as well. If pay was really good, it wouldn't matter, but selling this dream to a university grad is a bit hard in the US. I still hope it pans out though, cause NA manufacturing revival would be great. It's just the odds are against it so far.
> STEM field gap
STEM salary gap
I suspect the Taiwan workers have on average much lower salaries.
Yes, roughly speaking 1:4 compared to California.
Edit: This is not news. This (combined with their higher EE education) is why Taiwan won IBM PC-clone-related manufacturing in the 80s. And why they now have TSMC.
Such a great victory for American industry... the future is to bring workers from Taiwan with skills and willingness to receive a fraction of US salaries.
How much does salary contribute to the overall cost of operating TSMC? Perplexity said that the average salary of a TSMC employee is $76K a year, and TSMC had about 80K people. So it cost them around $6B a year on salary. In the meantime, their operational cost was about $46B a year, so that's 13%. TSMC shipped about 16 million 12-in wafers. Each 12-inch wafer can make about 300 to 400 chips. Let's say 200 to stay on the conservative side. That will be 3.2B chips a year. That means the cost per chip on salary will be less than $2 a year. It looks HC cost is not that dominant?
That's really a training issue.
Making chips isn't something you learn the details of at University. You can take all the classes you want in advanced semiconductor techniques but the simple fact is University level manufacturing is nowhere close to SOTA.
Basically, you need fab workers to spend time in Taiwan/China, and then return to USA. It's the same model that most foreign students use at schools in USA/Canada. Get USA/Canadian name brand school on resume, learn english, and go back to home country = profit.
Re the first point: Why do you think it is so difficult to transfer chip production off Taiwan?
I don’t think this is about salaries. Nor is this about facilities.
This is about process know-how. And it’s currently not available outside of Taiwan. I’m glad we’re finally starting to transfer knowledge. It will take a couple more years.
Does anyone know the general path to get involved in this? Perhaps its romantic, but this seems important, it seems hard, and it seems like something I can be proud of working on (as opposed to maximizing ad clicks). I'm just a SWE w/ a Comp sci degree, so what's the entry-point here?
Surely there is a lot of software involved in the design / operation of these fabs, it's not just designing the chip directly. Another commenter mentioned EDA so maybe I'll look into that.
EDA software has some of the most amazing algorithms. I'm always surprised more CS people aren't into it.
You can find many great opensource projects here: https://theopenroadproject.org
But to get some context, and try out the flow and how everything works together, start here: https://tinytapeout.com
I'm not too sure but I would assume there's going to be faster turn prototype chips in the USA now? Is packaging needed to prove a prototype? Can we start buying IP blocks and make our own ICs? I'd love a MCU with built in IMU and wide range LDO, not sure if that's possible all on the same node.
There's going to be some niches opening as a result of this IMO.
It might be possible but domain knowledge might give some candidates a leg up on the competition, going in blind just seems suboptimal, though most of the relevant EE undergraduate classes were in sophomore and junior level for me in the late 1980's and I only got to use EDA software when working a couple of semesters for AMD as a junior.
it's first step. you gotta do something to bootstrap, solve chicken-egg problem. From what I can see around me, the "made in america" is a no joke branding. a lot of pppl going tobuyjust because of that. and may even consider it as social status and their policial support.
The Purism Librem 5 phone is very expensive and unfortunately not that popular. Haven't met anyone who uses one yet
And it's also a pile of shit compared to an iPhone or a Galaxy S device.
There's your real issue right there. People are already paying $1199 for new phones. According to this article: https://www.vox.com/technology/2018/9/13/17851052/apple-ipho...
Another $100. That's a little over six years old now though, so bump it up to $200.
Would I pay $1399 for an American made iPhone with American made internals, as the article suggests it would cost ($100, but I doubled it for inflation, because, why not?)? You bet your sweet ass I would.
I have two kids in grade school and middle school and I see why we have a STEM gap. I have to constantly correct the learning at home in math. Also, I think it's fair to assume that in Korea, Japan, Taiwan, and China the school kids are actually put on an academic grindset unlike here where there is such little academic rigor or discipline being enforced by the school it makes sense why the k-12 education numbers are as bad as they are in the USA.
It might be worth getting up in front of the kids in middle school + and saying "Hey you're in competition at a global scale here. You're going to have to work your butts off to stay relevant."
Maybe that's how US is going to have enough STEM talents -- just like WWI and WWII, take as many talents as possible when the other parts of the world are in shit.
The scenario that we’re going to be able to fight a war with another first world power, where we will attack their infrastructure but ours will be left untouched, seems unlikely.
We just need to make sure that we never fight directly with another regional power, e.g. China or Russia. IMO, neither of them wants a fight with the US too, because you don't want to push a super power to the corner, EVEN if you think you are good enough to win.
In the mean time, the situation in EU and Asia is going to deteriorate and North America can absorb more talents as it sees fit. The last two times it was mostly EU but this time Asia might be the new talent pool we can draw from.
China invading Taiwan seems a ton more likely than China lobbing missiles into Arizona.
It seems likely enough if the situation escalates. The conflict could be anything from a naval skirmish where neither side attacks the other's mainland to a total war scenario. It will likely start as naval-only and become gradually more involved if no side backs down.
However, it's safe to assume cyber attacks will hit Arizona. It's not unreasonable to assume crazy people will attack critical infrastructure, and we'll have to deal with the social fallout from that.
I have no specific info regarding this plant, but for anyone who never experienced this: flying in people from other plants at the starts (and all 3rd party vendors for a hypercare phase at launch) seems pretty normal.
If they have to keep staffing it that way, that's different.
> - The chips still need to fly back to Taiwan to be packaged as there are no facilities here with such a capability.
This seems to be a much more achievable barrier to work around than not having a fab.
you can fly a few hundred million dollars worth of chips in a single flight. You need not be concerned. The impact from temu shipments is several orders of magnitude higher.
e.g. you can get 572 a15 dies per 300mm wafer at 90% yield. These likely weigh a few hundred grams.
By my rough calculations a million iPhones of a15s is about 200kg of silicon. excluding packaging, which would dwarf this mass entirely.
made in america is also a federally defined standard that these chips categorically fail to meet. assembled in the united states is more appropriate, and even then if you didnt hire americans to do it, what was the point?
this is starting to feel like the best of intentions that has spiraled into a political theatricality where close-enough will be good-enough.
given the current state of declining US college enrollment, the affordability crisis of college, the growing wage gap, the failure of the minimum wage to keep up with the cost of living, and the failure to reform predatory US student lending practices I do not see how the US will in the next 25 years ever manage to curate the type of braintrust for which it was once renowned across the globe.
This is so disconnected from reality. They've gone from breaking ground to replicating one of the most advanced fabrication processes in the history of the world _at scale_ in about 4 years, but they'll be sending the dies off for packaging while their packaging partner comes online so its just political theatre?
Also, over half of the employees are local hires and the ratio will increase as more of the fab spins up. IMO it would be much worse political theatre to delay and balloon the cost of the project by forcing TSMC to exclusively use a workforce that has no experience with the companies tools and processes.
Off topic but currently relevant:
Over 50% of the workers flew in from Taiwan to work on this plant and make these chips.
Those are the 50% we’re willing to bring in no questions asked via any visa program.
Not the elusive Java developer.
- Over 50% of the workers flew in from Taiwan to work on this plant and make these chips.
- The chips still need to fly back to Taiwan to be packaged as there are no facilities here with such a capability.
Made in america is a hard sell. But at least showing the glaring STEM field gap in the U.S. is a start to finally addressing the brain drain.