Taiwan is running low on a strategic asset: engineers

Engineers like Royale Lee, 31, are one of the reasons Taiwan is the world’s largest contract producer of the microchips that power nearly all electronics.

When a computer virus crippled the machines of his employer, Taiwan Semiconductor Manufacturing Company, Mr. Lee a 48-hour service to solve the problem. For years he answered calls day and night. But at the end of 2021, after five years of sacrifice, he had become afraid of his phone ringing. His $105,000 annual fee, an enviable sum in Taiwan, was not enough to stick around.

Over the past decade, TSMC, as the company is known, has built a significant lead over rivals such as Intel and Samsung in the race to make the smallest and fastest microchips. Largely due to the ingenuity of its engineers, TSMC has become one of the most geopolitically important companies in the world.

Today, many at the top of Taiwan’s semiconductor industry fear that the small island nation will not be able to handle the growing demand for a new generation of engineers. A shrinking population, a demanding work culture and an abundance of competitive tech jobs have made workers increasingly scarce.

The stakes are huge. Some military strategists argue that TSMC’s dominance in microchips gives Taiwan a guarantee against invasion by China — in part because the United States would have to defend such an important piece of its supply chain.

The talent crisis in Taiwan is intertwined with TSMC’s success. The company’s workforce has grown by nearly 70 percent over the past decade, while Taiwan’s birth rate has fallen by half. Startups in promising fields such as artificial intelligence lure top engineers. When recruiting, TSMC has to compete with Internet companies such as Google and foreign semiconductor companies such as Dutch ASML, which generally offer better work-life balance and perks such as free food.

TSMC’s leaders have championed the company’s famously hard-working culture, which has grown the company into a $440 billion behemoth with 73,000 employees. Morris Chang, the founder, recently defended the military discipline he expected — husbands, he said, would simply go back to sleep if TSMC called employees to work in the middle of the night. But in recent years, TSMC Chairman Mark Liu has repeatedly acknowledged that the biggest challenge facing Taiwan’s semiconductor industry is the talent shortage.

Taiwan’s largest job search platform, 104 Job Bank, had more than 33,000 vacancies for jobs in the chip industry in August. Taiwan’s chip industry employed about 326,000 people last year, according to the government-affiliated Industrial Technology Research Institute.

TSMC is forced to adjust its recruitment strategies. It has broadened recruiting channels and increased base pay for master’s students, who can now expect average annual compensation of up to $65,000. It will begin recruiting Taiwanese graduate students in September, well ahead of the conventional March hunting season, and has even begun educating high school students with online classes on semiconductor basics.

“Many companies struggle to find suitable candidates,” said Burn Lin, former vice president at TSMC and current dean of National Tsing Hua University’s College of Semiconductor Research.

“When looking for talent, they are not very picky,” said Mr. Lin. “You don’t necessarily have to study electrical engineering or computer science.”

The college Mr. Lin directs is one of four specialized semiconductor schools established by the Taiwanese government in 2021 in response to calls to action by industry players such as Mr. Liu and Tsai Ming-kai, chairman of the chip design company MediaTek.

“We are racing against time in cultivating talent for semiconductors,” said Tsai Ing-wen, president of Taiwan, said at the unveiling of Mr. Lin’s Semiconductor School.

The challenges faced by Taiwan’s chip industry come amid a global crisis. In China, where officials have tried to entice Taiwanese engineers to build their fledgling chip industry, the state-backed Chinese Academy of Sciences has has feared about a “serious shortage” of qualified personnel. At one estimationChina’s microchip industry was 200,000 short.

In the United States, government efforts to use billions of dollars in subsidies to attract semiconductor factories have prompted Intel, Samsung, TSMC and others to announce plans for new factories. But surveys of executives showed that talent shortages remain a problem.

At TSMC, the homeland recruitment gap has made efforts to build factories and train workers outside Taiwan more urgent. Unlike most major hardware companies, which long ago spread research and production around the world, TSMC has built the vast majority of its chip factories, known as fabs, in Taiwan. The clustering of its best employees and suppliers, as well as the most advanced factories, has helped it through the years, but the company needs to look beyond Taiwan, said Harvard Business School professor Willy Shih.

“If I were TSMC, I would seriously look for other places where I can get that talent,” he said.

Making semiconductors requires skilled and disciplined workers and it’s part of why TSMC excels at this, said Wu Chih-I, director of the TSMC-National Taiwan University Joint Research Center.

Mr. Wu, who worked as an engineer at Intel at the beginning of his career, said techies today are more interested in jobs that suit their interests, rather than just chasing a paycheck, as his generation was.‌ ‌

“If you don’t have significant financial pressures, you might choose a less demanding job, even if it means foregoing the high salary and promising future of a semiconductor career.”

Mr. Lee, the former TSMC employee, said younger Taiwanese are less willing to endure the grueling experience of working in a fab.

“It’s not as glorious as it used to be,” says Lee, who now works as a web developer for a US company.

Jason Chin, senior vice president of 104 Job Bank, said TSMC and other chip companies will never stop selling without improving working conditions.

This does not only apply to workers like Mr. Lee, who have the grueling job of keeping plants running, but also critical researchers who come up with new ways to make chips faster and faster.

Frank Lin, 30, is one such TSMC researcher who left because he found the work boring and unfulfilling. His role as a product engineer and chip designer wasn’t as strained as others at the company, but he struggled nonetheless, yearning for more meaning and a sense of accomplishment. Although he had a master’s degree from one of Taiwan’s most prestigious universities, he was given little responsibility and was assigned day-to-day duties.

“Although the amount of money I earn continues to increase, is this all there is to life?” he recalled that he was often at work when he sat in a sunlit office cubicle. After less than three years with the company, he went on his own as an independent financial advisor. He hasn’t looked back. “People want to work for themselves. There are so many opportunities in the outside world right now,” he said.