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Comment by ufocia | Hacker News Reader

Semiconductor manufacturing is very capital intensive so running the company as a nonprofit is a nonstarter.

You've presented historical data to counter the of argument that wage/salary growth MAY lead to potential unprofitability solely on the basis of one year's profit numbers. That's literally driving forward looking in the rearview mirror because it says very little about how profitable the company would be if it raised wages/salaries. At best it may be a first order approximation of how profitable the company would have been in 2022, if it paid people more then. However, even for 2022 the calculation isn't as simple as dividing the profit by the number of employees and keeping the company profitable.

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Hiding behind "it's complicated" is an over-used excuse to avoid a more critical look at a problem.

A one year point is a crude approximation, but it does illustrate the order of magnitude mismatch between what they could pay their employees vs what they actually pay them, which was the short point being made.

More broadly, TSMC had no problem shelling out $9.9 billion to shareholders that same year (or $123,000+ per employee). So the argument of saving every penny because of the "capital intensive" nature of their business is also out the door.

And complaining about a single year estimate in the case of TSMC is barking up the wrong tree. They've had net incomes in the billions at least since the beginning of the 2000s.

So no, in the case of TSMC, they have no reason to pay wages below what is considered a "living wage" in Phoenix, Arizona.

https://livingwage.mit.edu/metros/38060

Then TSMC would be paying its Taiwan employees a lot less, the disparity could be a problem somehow.

Our markets, not even remotely isolated to semiconductor, are saturated in these bloated old businesses that are running on the razor's edge of financial ruin, yet every quarter are paying out catastrophic amounts of money in stock buybacks and generous compensation packages for the executives running them into the ground. It's beyond fucking parody at this point.

Also I wonder what the excuses will be once all the underdeveloped nations do what China did and actually develop. We have a finite number of exploitable countries on the planet with workers willing to work for pennies to assemble products. At SOME POINT this party is going to end, it has to.

The effect of globalization is that the west is bringing the rest of the world over the poverty line at the cost of deteriorating ourselves. Hard to say how this will end.

What's the EPS? Is the business doing better than the market?

When you open your business you're free to pay all your capital to your staff.

If you've ever changed banks or cards to get a better interest rate you deeply understand but haven't surfaced it here

Very capital intensive means operating costs (wages) are a small percentage.

A trailing fab has very few people running the operation. This will be a trailing fab.

Ok then perhaps offer a better approximation, let's say 50% of profit instead of the 100% share. That is still a very decent wage and is on top of the existing labour expense which profit has already accounted for

Companies have absolutely non incentive to do this. TMSC turned that profit in 2022 with wages as-is, why would they spend more on wages if they don't need to?

Don't get me wrong, I wish companies were incentivized to do right by their employees. That's just not how the world works, companies only need to do the bare minimum to get the job done and leave as much profit on the table as possible.

Problems with that are things like:

- what if the EU writes a rule and then fines you for breaking it as a percentage of revenue? You can't have no money available for the future. You need a huge amount of money available for the future, as otherwise a company that pays its workers less (but still retains them) will beat you eventually

- why would anyone invest in you for the chance of no return? It's a high risk strategy to put $1m on a number in roulette for the chance of making a fortune; it's a ridiculous one to put $1m on a number in roulette for the chance of getting your money back

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