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Comment by jasonwatkinspdx | Hacker News Reader

Not a good take. TSMC is known for paying well above average in the industry, as well as having an internal culture of pretty fierce loyalty. On top of that, fab is very highly automated. Even though you need a lot of very smart engineers, head count is still very low compared to the value the fab creates. Suppressing labor prices is pretty low down the list of priorities for this industry. Costs are utterly dominated by capital costs to build a new generation of your fab every 2 years.

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The problem is that the workers in the industry are severely underpaid. Even the "above average" pay may actually be way below what the workers should be getting. Let's say they have 50000 employees and for simplicity let's look at their 17 billion profit last year. Based on industry standard margin of 30%, each employee should be getting 100k USD extra a year on top of what they already make. That not adjusted for the role - some should be getting 1 million and others 10k. It's a pure exploitation however you dress it.

1. if employees are paid higher than average, why does TSMC need government's very targeted policy help. 2. the need to update the costly fab constantly might be the motivation to further squeeze employees. TSMC needs to invest even more to compete with US and China.

Because China is offering 3x the pay. Obviously this isn't sustainable. But China can pay higher (through government help) that disrupts things. The pay is so high no company could sustain business. It already creates a situation where competition is out the window.

The US and China should invest in their own fabs and become less dependent upon TSMC (which is happening and even if both dumped enormous funds into this it would take quite a long time to overtake TSMC. Which is why China is doing this in the first place).

> Because China is offering 3x the pay. Obviously this isn't sustainable.

in the software world, I've seen this happen and the salaries never get rolled back. So it will have to be sustainable...

Sure, but those company's extra cash flow isn't coming from the government, they are coming from capital investors. At the end of the day these two have completely different motives. A capital investor expects to get capital back, where a government may not. Motivation could be to harm another country, a long term (20+ years) technological investment, or many other things.

Considering the geopolitical situation we could interpret this as an attack and defense (economic warfare). TSMC is Taiwan's most important industry and is one of the reasons the West helps protect them (besides the military advantage of location). China has long said that Taiwan is not a sovereign nation and rather a rebellious territory that is acting illegally. What we're seeing is part of a war going on, not two companies competing (TSMC vs SMIC).

The government still expects a return, it just might not be in terms of profit.

How is two companies companies different from economic war?

> How is two companies companies different from economic war?

Are two companies fighting or are two governments? If I'm the government and hand you ten million dollars and say "hey, go poach some employees from that strategically valuable company that is in the country of my enemy."

I'm not sure what part you aren't getting. That the government is handing SMIC cash? Because I said that three times now.

American companies offered me 3x the pay of what Canadian companies did.

Moving was obvious? Somehow, amazon manages to stay in business.

This is just owners not wanting to reduce their share of the revenues

I think it would be a bit different if the US government handed Amazon money and said "hey, go poach your Canadian rivals."

Because recruitment from TSMC to China is not an ordinary labor market. TSMC vs SMIC has huge geopolitical implications for Taiwan, China, and the world at large even. Most companies don't have "CCP's intelligence services are going to spend millions to entice, bribe, or coerce our key engineers to jump ship" as part of their recruiting concerns.

As for point 2, TSMC's financials are public. They spend ~30 million a year on payroll. On the other hand they expect to invest a total of 100 billion into their next generation fab over the next 3 years. The idea that penny pinching salary is what enables their capital spend is hilariously out of touch with the scale of the relative expenses.

I don’t think only SMIC recruitment is banned based on the article. Could you give an example what "CPP intelligence services" are doing to "entice, bribe, or coerce our key engineers"? Politicizing all the recrements does not seem fair for employees. Basically, TSMC is trusting their employees, is that what you are saying?

This could be ONCE IN A LIFETIME career jump, using national security as a reason to deny employees’ career development and salaries negotiation doesn’t seem fair.

based on the article, it is not just semiconductor industry, it is ALL job listing. Wow, kinda of extreme.

Huh? You exactly describe penny pinching salaries

I'd expect 5-10 billion in salary based on your description

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