Engineers like Royale Lee, 31, are one reason Taiwan is the world’s biggest contract producer of the microchips that power almost all electronics.
When a computer virus paralyzed machinery at his employer, Taiwan Semiconductor Manufacturing Company, Mr. Lee pulled a 48-hour shift to help fix the problem. For years he responded to phone calls day and night. But in late 2021, after five years of sacrifices, he had come to fear the ring of his phone. His annual compensation of $105,000, an envied sum in Taiwan, was not enough for him to stick around.
Over the past decade, TSMC, as the company is known, has built a wide lead over rivals like Intel and Samsung in the race to make the smallest — and fastest — microchips. Largely because of the ingenuity of its engineers, TSMC has become one of the most geopolitically important firms in the world.
Today, many at the top of Taiwan’s semiconductor industry fear the tiny island territory will not be able to sustain the growing demand for a new generation of engineers. A shrinking population, demanding work culture and an abundance of competing tech jobs have meant workers have become ever more scarce.
The stakes are enormous. Some military strategists argue that TSMC’s dominance in microchips provides Taiwan a guarantee against an invasion by China — in part because the United States would need to defend such an important piece of its supply chain.
Taiwan’s talent crisis is intertwined with TSMC’s success. The company’s employee count has grown almost 70 percent over the past decade, while Taiwan’s birthrate has plummeted by half. Start-ups in promising fields like artificial intelligence are luring top engineers. In recruiting, TSMC must compete with internet companies like Google and foreign semiconductor companies like ASML of the Netherlands, which generally offer better work-life balance and perks like free food.
TSMC’s leaders have defended the company’s famously tough work culture, which has helped it grow into a $440 billion behemoth with 73,000 employees. Morris Chang, the founder, recently defended the military discipline he expected — spouses, he said, would just fall back asleep when TSMC called employees to work in the middle of the night. But in recent years, TSMC Chairman Mark Liu has repeatedly acknowledged that the largest challenge facing Taiwan’s semiconductor industry is its shortage of talent.
Taiwan’s largest job search platform, 104 Job Bank, had over 33,000 listings for chip industry jobs as of August. Last year, Taiwan’s chip sector employed about 326,000 people, according to the government-affiliated Industrial Technology Research Institute.
TSMC has been forced to adjust its recruitment strategies. It has broadened hiring channels and increased its base salary for master’s graduates, who can now expect to receive an average annual compensation of up to $65,000. It begins recruiting Taiwanese graduate students in September, well ahead of the conventional job-hunting season of March, and has even begun to cultivate high schoolers with online classes about the basics of semiconductors.
“Many companies are struggling to find suitable candidates,” said Burn Lin, a former vice president at TSMC and the current dean of National Tsing Hua University’s College of Semiconductor Research.
“Now when searching for talent, they are not very picky,” Mr. Lin said. “You don’t necessarily have to study electrical engineering or computer science.”
The college Mr. Lin heads is one of four specialized semiconductor schools that were established by the Taiwanese government in 2021 in response to calls for action by industry players like Mr. Liu and Tsai Ming-kai, chairman of the chip design firm MediaTek.
“In cultivating semiconductor talent, we are racing against time,” Tsai Ing-wen, Taiwan’s president, said at the unveiling of Mr. Lin’s semiconductor college.
The challenges facing Taiwan’s chip industry come amid a global crunch. In China, where officials have sought to lure Taiwanese engineers to build up its fledgling chip industry, the state-backed Chinese Academy of Sciences has fretted about a “serious shortage” of qualified workers. By one estimate, China’s microchip industry was short 200,000 people.
In the United States, government efforts to use billions of dollars in subsidies to attract semiconductor plants have spurred Intel, Samsung, TSMC and others to announce plans for new plants. But surveys of executives showed talent shortages remain a problem.
At TSMC, the recruitment gap back home has added urgency to its efforts to build factories, and train workers, outside Taiwan. Unlike most major hardware companies, which long ago spread research and production across the world, TSMC has built the vast majority of its chip manufacturing plants, known as fabs, in Taiwan. The clustering of its best employees and suppliers as well as most cutting-edge plants has helped it over the years, but the company needs to start looking beyond Taiwan, according to Harvard Business School professor Willy Shih.
“If I were TSMC I’d get serious about finding other places where I can get that talent,” he said.
Making semiconductors requires skilled and disciplined employees and it is part of the reason TSMC excels at it, said Wu Chih-I, director of the TSMC-National Taiwan University Joint Research Center.
Mr. Wu, who worked as an engineer at Intel early in his career, said tech workers today are more interested in jobs that fit their interests, rather than just pursuing a paycheck as his generation was.
“If you don’t have significant financial pressure, you might choose a less demanding job, even if it means passing up 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 no longer as glorious as it used to be,” said Mr. Lee, who now works as a web developer for an American firm.
Jason Chin, senior vice president of 104 Job Bank, said TSMC and other chip companies will never stop the turnover without improving working conditions.
That applies not just to workers like Mr. Lee who face the grueling job of keeping plants running, but also critical researchers who think up new ways to make chips ever faster.
Frank Lin, 30, is one such TSMC researcher who left because he found the work tedious and unfulfilling. His role as product engineer and chip designer was not as high pressure as others at the company, but he nonetheless struggled, craving more meaning and a sense of accomplishment. Even though he had a master’s degree from one of Taiwan’s most prestigious universities, he was given scant responsibility and assigned rote daily tasks.
“Though the amount of money I make continues to increase, is this all there is to life?” he remembered thinking often at work when sitting in a sunlit office pantry. After fewer than three years at the company, he struck out on his own as an independent financial adviser. He hasn’t looked back. “People want to work for themselves. There are so many possibilities in the outside world right now,” he said.