News Building a chipmaking fab in the US costs twice as much, takes twice as long as in Taiwan

[Admin]

It takes 19 months to build a fab in Taiwan, 34 months to construct a fab in Europe, and 38 months to establish a fab in the U.S.

Building a chipmaking fab in the US costs twice as much, takes twice as long as in Taiwan : Read more

 

[Shiznizzle]

I did recently read on this matter.

The extra time, some of it, can be attributed to environmental regulations which are not really worried about in Taiwan. At least not on the same level as the US worries about it.

The weird thing is that fab in Arizona still has to ship its chips back to Taiwan to "finish". Whatever that means. Packaging? Attaching the IHS and packaging? Only for the chip to be shipped back again? Seems silly, all this shipping.

You have a fab but still cant make it on your own.

 

[A Stoner]

Florida recovers from hurricanes 98% faster than non-coastal states. I am sure the USA can gain some efficiencies once we start actually building enough fabs and when it becomes a large enough part of our economy to matter much.

Taiwan's GPD is 15% chip manufacturing. Obviously they are going to have the best efficiencies there are on these.

For reference, if the United States took 100% of Taiwan's current chip manufacturing into its GDP it would be about 0.7% of our GDP.

 

[A Stoner]

I did recently read on this matter.

The extra time, some of it, can be attributed to environmental regulations which are not really worried about in Taiwan. At least not on the same level as the US worries about it.

The weird thing is that fab in Arizona still has to ship its chips back to Taiwan to "finish". Whatever that means. Packaging? Attaching the IHS and packaging? Only for the chip to be shipped back again? Seems silly, all this shipping.

You have a fab but still cant make it on your own.

The shipping will end once America has enough fabs to keep the packaging plants busy and we build some, at double the cost and twice the time.

 

[bit_user]

I did recently read on this matter.

The extra time, some of it, can be attributed to environmental regulations

Is this before or after "the U.S. enacted a law that exempts certain U.S. fabs from federal environmental assessments"? That article is dated Oct. 2024, so I'd guess the law is a response to whatever you read about.

It seems to me like 24/7 construction has got to account for a lot of the difference.

The weird thing is that fab in Arizona still has to ship its chips back to Taiwan to "finish". Whatever that means. Packaging? Attaching the IHS and packaging? Only for the chip to be shipped back again? Seems silly, all this shipping.

There's been talk of TSMC building a packaging plant in the USA. This, I think:

https://www.tomshardware.com/tech-i...he-u-s-cowos-and-info-to-make-ai-and-hpc-cpus
​

 

[lmcnabney]

The environmental regulations are there on purpose you know. Chipmaking is pretty much the most toxic industry on Earth if you exclude the nuclear industry.

 

[kcw]

It is more interesting to know why it is the case.
What is the average size of fab in each region? Also what are the average duration for other type of buildings?
Does it attribute to the distance that construction materials and utilities have to travel?

 

[Giroro]

According to Google's AI, the average construction worker in Taiwan gets paid between $10,800 - $11,880 per year. In America the average construction worker gets paid $52,333.

So with over 4x the money going to workers and much more regulatory oversight, they are only paying twice as much for construction? I'd say they're getting a tremendously good value for their dollar. Each employee would have to be getting a lot more work done to cut those costs. American employees must be performing more efficiently to get the same amount of building done with what must be fewer workers - which is a win. The longer amount of time overall is just a matter of limiting the building to daytime hours - which is more humane, saves cost on lighting, and safer.

Besides, if it takes longer to build the building, who cares? The equipment inside the buildings need to be bleeding edge, not the steel and concrete of the building itself.

 

[bit_user]

It is more interesting to know why it is the case.
What is the average size of fab in each region? Also what are the average duration for other type of buildings?
Does it attribute to the distance that construction materials and utilities have to travel?

One thing I've heard is that big public works projects are just a lot more expensive in the USA that just about anywhere else in the world, including Europe! That's been cited as one of the reasons we tend to have worse public transportation, for instance.

I do have to wonder how much of it is to do with organized crime. Probably not much, but there are certain types of business, like cement, which have long been havens of mob and other corrupt dealings. Certainly, in places like NYC, you basically can't do any sort of construction or sanitation without a certain amount of the money going to the mob.

 

[bit_user]

According to Google's AI, the average construction worker in Taiwan gets paid between $10,800 - $11,880 per year. In America the average construction worker gets paid $52,333.

Needs a proper source. Not to mention the fact that the types of construction workers used to build fabs are likely very experienced specialists and making well above what the average home builder makes, for instance.

So with over 4x the money going to workers and much more regulatory oversight, ...

If that fact is wrong, you're building on a rotten foundation. Garbage in; garbage out.

Besides, if it takes longer to build the building, who cares? The equipment inside the buildings need to be bleeding edge, not the steel and concrete of the building itself.

It has to do with financing these projects, I think. The longer it takes to achieve a return on investment, the more difficult it is to raise capital and the more expensive that financing becomes.

Also, the longer it takes to build new capacity, the harder it is to time against demand. Semiconductor manufacturing is a very cyclical business. If you bring a lot of new capacity online at the bottom of a business cycle, it could be disastrous, because that production has only a short time to pay for itself before it becomes obsolete. Similarly, if you can't get new capacity online to take advantage of the top of the business cycle, then you lose out on the gravy train.

 

[husker]

The additional time and cost do come with benefits as well; although not to the project itself but to society in general. Yes, I'm sure there is some waste, but things like wages, safety, environment also play a role.

 

[Giroro]

Needs a proper source. Not to mention the fact that the types of construction workers used to build fabs are likely very experienced specialists and making well above what the average home builder makes, for instance.

Google's source for Taiwan
https://www.glassdoor.com/Salaries/taipei-taiwan-construction-salary-SRCH_IL.0,13_IM1132_KO14,26.htm
And US:
https://www.ziprecruiter.com/Salaries/Construction-Worker-Salary

Although, I don't see any reason why it would take much special labor for the construction of a fab. They're not much more than big warehouses with fancy air conditioning.
I'm sure a lot goes into the actual design of the fancy air conditioning and that it would cost a lot to buy the system itself - but TSMC is copy-pasting their factory designs and buying equipment off the shelf. The actual construction and installation? I'm not seeing it.
The truly expensive and difficult part is the lithography, and I don't think that has anything to do with the complaint about construction cost and building regulation.

Mostly I'm just sick of TSMC's endless public complaints and childish whining about Arizona, because it seems obvious they commissioned this research. If they truly didn't want to pay for American builders in Arizona, then they should not have taken American payment to build in Arizona.

 

[Blastomonas]

Was impressed until I read the part about working 24/7...

Who would have thought that working twice as many hours in a day including weekends would result in a faster construction..

 

[bit_user]

I don't see any reason why it would take much special labor for the construction of a fab. They're not much more than big warehouses with fancy air conditioning.

Warehouses? Hardly. The amount of infrastructure they have for gas & chemical handling and electrical, not to mention the positive pressure, air-handling, and probably low dust and effluent requirements should put them probably on par or above even hospitals and bio labs.

I'd expect most of their construction workers are going to be heavy equipment operators or specialists doing plumbing, HVAC, electrical, etc. I'm not sure if you've ever hired a house plumber or electrician, or know anything about compensation for heavy equipment operators, but it's a heck of a lot higher than the numbers you quoted for US average construction salaries.

Mostly I'm just sick of TSMC's endless public complaints and childish whining about Arizona, because it seems obvious they commissioned this research. If they truly didn't want to pay for American builders in Arizona, then they should not have taken American payment to build in Arizona.

Yeah, I'm not trying to argue in favor of the statistics cited in the article. I'm just saying that I think you can't just apply industry averages, when trying to estimate the costs, here.

 

[JamesJones44]

Taiwanese workforce is highly experienced, so Taiwanese builders require fewer detailed blueprints because they are familiar with every step of the process, which speeds up completion of fab projects, according to Herbert Blaschitz, an executive at Exyte

TSMC has 15 fabs in an area about the size of Maryland. I'm sure as more southern Arizona fabs come online finding laborers with Fab building expertise will become less of an issue assuming they focus on a similar sized area.

 

[jkflipflop98]

We have building codes and stuff. You can't just cut corners and drive your workers into the ground 20 hours a day like you can in Taiwan.

 

[rhettlivingston]

Warehouses? Hardly. The amount of infrastructure they have for gas & chemical handling and electrical, not to mention the positive pressure, air-handling, and probably low dust and effluent requirements should put them probably on par or above even hospitals and bio labs.

I'd expect most of their construction workers are going to be heavy equipment operators or specialists doing plumbing, HVAC, electrical, etc. I'm not sure if you've ever hired a house plumber or electrician, or know anything about compensation for heavy equipment operators, but it's a heck of a lot higher than the numbers you quoted for US average construction salaries.


Yeah, I'm not trying to argue in favor of the statistics cited in the article. I'm just saying that I think you can't just apply industry averages, when trying to estimate the costs, here.

My suspicion is that much of the problem expressed by this article is because the exchange rate used to compare costs between America and Taiwan are, like most exchange rates involving the American dollar, not truly indicative of costs. I'd bet their workers are living a lifestyle similar to ours. Therefore, they are paid similarly. Your pay is indicated by the life it affords you, not by comparison using the exchange rate.

Personally, I believe it we simply fixed our exchange rates to make the cost of a standardized middle class lifestyle the same in both countries involved in the exchange, all of our trade imbalances would go away and jobs would return. Our use of power to manipulate our exchange rates so that we can buy goods at a steal is the base of our problem with trade.

The problems that are important in this article are the ones related to bureaucracy, speed and quality. Some costs are due to poor performance in those areas and time to market is vital in the industry.

 

[JRStern]

According to Google's AI, the average construction worker in Taiwan gets paid between $10,800 - $11,880 per year. In America the average construction worker gets paid $52,333.

In the US? I hope and expect it's 2x or 3x that at a bare minimum with no overtime.
Probably rather higher per hour even if annual earnings may be limited due to less than full time work.
You don't build billion-dollar projects with pick-up labor from the Home Depot parking lot at less than minimum wage.

 

[bit_user]

Personally, I believe it we simply fixed our exchange rates to make the cost of a standardized middle class lifestyle the same in both countries involved in the exchange, all of our trade imbalances would go away and jobs would return. Our use of power to manipulate our exchange rates so that we can buy goods at a steal is the base of our problem with trade.

Fixing exchange rates? So, basically you're proposing more inflation to make the dollar weaker, thereby making our exports cheaper and imports more expensive? That sounds like an idea that would float like a lead balloon.

 

[bit_user]

In the US? I hope and expect it's 2x or 3x that at a bare minimum with no overtime.

Yeah, I think that statistic must be getting skewed by the cost of house builders and other types of low-end construction. Those probably make up the bulk of construction workers and lots of them are immigrants that will work for less.

 

[Shiznizzle]

Florida recovers from hurricanes 98% faster than non-coastal states. I am sure the USA can gain some efficiencies once we start actually building enough fabs and when it becomes a large enough part of our economy to matter much.

Taiwan's GPD is 15% chip manufacturing. Obviously they are going to have the best efficiencies there are on these.

For reference, if the United States took 100% of Taiwan's current chip manufacturing into its GDP it would be about 0.7% of our GDP.

Florida, all of it. Is going to be under water sooner rather than later. IF we keep going the way we are and this is highly likely as not enough individuals are willing to change on a personal level, then Florida is gone within 50-75 years from now.

1.5 degrees is done and dusted. Now 2.0 degrees is the new game with lots of people saying that will get broken this decade. So that leaves 2.5 and 3 on the table which will be really bad.

Olives and citrus fruit growing in northern scotland bad. IF you think i am crazy then rest assured that they, both olives and now citrus as well as chilis are now growing in our southern UK.

Anything after that will be really bad. Sad thing is this. Even if we stop all emissions right now CO2 levels will still rise for quite some time. This is why it is urgent we drastically reduce emissions right now as they will keep rising anyway.

I would not build anything in florida and i would actually start moving my wealth out of the state. Storms will get more frequent and be more destructive.

MOD EDIT Removed Politics

 

[spongiemaster]

Besides, if it takes longer to build the building, who cares? The equipment inside the buildings need to be bleeding edge, not the steel and concrete of the building itself.

Really? You don't think Intel would benefit from building fabs in half the time? Intel's financials are so disastrous right now because of the billions they are paying upfront to build out their fab capacity with zero return. Halving the construction time of fabs would have had a monumental impact on Intel's ability to execute the turn around Gelsinger had implemented when he became CEO. He would still be CEO today.

 

[Thunder64]

Florida, all of it. Is going to be under water sooner rather than later. IF we keep going the way we are and this is highly likely as not enough individuals are willing to change on a personal level, then Florida is gone within 50-75 years from now.

1.5 degrees is done and dusted. Now 2.0 degrees is the new game with lots of people saying that will get broken this decade. So that leaves 2.5 and 3 on the table which will be really bad.

Olives and citrus fruit growing in northern scotland bad. IF you think i am crazy then rest assured that they, both olives and now citrus as well as chilis are now growing in our southern UK.

Anything after that will be really bad. Sad thing is this. Even if we stop all emissions right now CO2 levels will still rise for quite some time. This is why it is urgent we drastically reduce emissions right now as they will keep rising anyway.

I would not build anything in florida and i would actually start moving my wealth out of the state. Storms will get more frequent and be more destructive.

MOD EDIT Removed Politics

I wasn't aware I was on a climate change forum. What does any of this have to do with the topic?

 

[kcw]

One thing I've heard is that big public works projects are just a lot more expensive in the USA that just about anywhere else in the world, including Europe! That's been cited as one of the reasons we tend to have worse public transportation, for instance.

I do have to wonder how much of it is to do with organized crime. Probably not much, but there are certain types of business, like cement, which have long been havens of mob and other corrupt dealings. Certainly, in places like NYC, you basically can't do any sort of construction or sanitation without a certain amount of the money going to the mob.

A lot of exaggeration too. Generic transportation cost in the US is not particularly high according to WorldBank data. Land cost are naturally expensive in area where synergies are strong...

The role of responsible media is to bring rationality in arguments

 

[bit_user]

Really? You don't think Intel would benefit from building fabs in half the time? Intel's financials are so disastrous right now because of the billions they are paying upfront to build out their fab capacity with zero return.

How much is really dependent on fab construction time vs. node development? I'm pretty sure node development is the long pole, and that's the part that's incredibly hard & expensive to speed up.

Intel knows how long it takes to build fabs and I'm sure they plan the facilities to be ready by roughly the time the node has enough yield to scale up. For instance, I'm reading their Ohio fab is planned to run 14A production.

That said, I previously outlined financial benefits of shorter fab construction times, but only if total cost didn't balloon as a result.