TSMC: Talent shortage, not water, threatens Taiwan’s chip edge

At the opening of a new science park in Pingtung on Tuesday, TSMC Chief Executive CC Wei warned that a shortage of engineers and technicians could undermine Taiwan’s role in advanced chipmaking. Heavy rain fell across southern Taiwan during the ceremony, providing temporary relief to fabs that require large volumes of ultra‑clean water.

Wei said the company “still worries about water security, but talent remains the constraint that most concerns the company,” and he joked that he had recently asked whether TSMC would need to rely on water trucks if supplies worsened.

Water remains a practical risk for the semiconductor sector. In 2021 Taiwan imposed broad water restrictions after its worst recorded drought, a disruption that affected factories on the island. President Lai Ching-te, who attended the Pingtung event, said the government is close to completing plans to connect reservoirs across Taiwan to improve retention, distribution and efficiency and reduce the chance that regional shortages halt industrial output.

Wei said that even if reservoirs and power supplies improve, Taiwan will face a shortage of engineers, technicians and skilled manufacturing workers needed to run fabs, develop processes and support research. He linked the shortfall to rising demand for artificial intelligence chips and the growing complexity of manufacturing steps.

The Pingtung science park is intended to spread high-tech jobs beyond Taiwan’s major urban centers. Lai said officials are working to attract and retain foreign talent, including by easing work-permit procedures. Local officials said recruiting and keeping skilled workers will be especially difficult in rural areas such as Pingtung, where smaller labor pools and competition from larger cities are factors.

TSMC lists five long-standing constraints for the industry: water, power, labor, land and talent. The company has expanded overseas in response to customer and government pressure to diversify supply chains. Its investment in Arizona has reached about $165 billion and now includes six fabs, two advanced packaging sites and an R&D center.

TSMC has stated that its most advanced production and core research will remain in Taiwan. At the Pingtung event, Wei emphasized that the availability of trained engineers and technicians will affect the island’s ability to operate and advance cutting-edge semiconductor manufacturing.