Is TSMC's "American Dream" Shattering? The Dilemma of China-US Industrial Transfer and the Reshaping of Global Industrial Landscape

Is TSMC's "American Dream" Shattering? The Dilemma of China-US Industrial Transfer and the Reshaping of Global Industrial LandscapeThe difficulties faced by TSMC in the US reflect the complex nature of China-US industrial transfer, which goes beyond simple capital flows and involves multifaceted considerations, including culture, institutions, and labor. The US hopes to revitalize its domestic manufacturing industry by attracting companies like TSMC back, but it has failed to fully consider deep-seated issues within its own system

Is TSMC's "American Dream" Shattering? The Dilemma of China-US Industrial Transfer and the Reshaping of Global Industrial Landscape

In 2020, TSMC announced its plan to build a factory in the US, sending shockwaves through the global semiconductor industry. However, four years later, rumors about the exorbitant cost and difficulties in securing chips persist, casting doubt on TSMC's "American Dream." Recently, heightened labor conflicts in the US have dragged TSMC into the fray, highlighting the challenges of China-US industrial transfer and revealing the complexities of reshaping the global industrial landscape.

Initially, the US government considered TSMC's move as a crucial step in revitalizing its domestic chip manufacturing industry. However, high costs, cultural differences, and disparities in labor quality have posed significant hurdles for TSMC. Labor is particularly problematic. The US has recently witnessed a surge in labor movements, with workers from various sectors, from healthcare professionals to dockworkers, taking to the streets to demand higher wages and improved working conditions. TSMC's Arizona factory has not been immune to this trend, as local unions have expressed strong dissatisfaction with TSMC's practice of transferring technicians from Taiwan, arguing it steals jobs from American workers.

The demands of American labor are not unreasonable. Long-term manufacturing outflows have led to persistently high unemployment rates among blue-collar workers in the US, while remaining companies have continuously compressed costs, resulting in stagnant wages for workers. The outbreak of the COVID-19 pandemic exacerbated inflation, adding further hardship to the lives of American workers. Against this backdrop, the rise of labor movements in the US is not a coincidence but rather a concentrated outburst of long-accumulated social contradictions.

The difficulties faced by TSMC in the US reflect the complex nature of China-US industrial transfer, which goes beyond simple capital flows and involves multifaceted considerations, including culture, institutions, and labor. The US hopes to revitalize its domestic manufacturing industry by attracting companies like TSMC back, but it has failed to fully consider deep-seated issues within its own system.

Firstly, the US's high cost problem is deeply ingrained. The prices of production factors such as land, energy, and labor are significantly higher than in developing countries like China, a major contributing factor to the long-term outflow of US manufacturing. Secondly, the US labor market is rigid, with powerful unions demanding high and inflexible employment costs for companies. Finally, the US government's inefficiency and fluctuating policies add to the uncertainty of investments for companies.

In contrast, China boasts a complete industrial chain, a vast market, an efficient government, and a diligent workforce, advantages that are difficult for other countries to replicate in the short term. TSMC's experience in the US indirectly proves the competitiveness of Chinese manufacturing.

Of course, the Chinese manufacturing industry also faces the pressure to transform and upgrade. In recent years, China's labor costs have steadily risen, and environmental and resource constraints have tightened, gradually diminishing the comparative advantages of low-end manufacturing. Chinese manufacturing must transition towards high-end, intelligent, and green development to remain competitive on the global stage.

The cautionary tale of TSMC's "shattered American Dream" underscores that industrial transfer is not a quick fix nor a permanent solution. Companies must carefully assess risks and make deliberate decisions, avoiding blind following of trends. Nations must focus on optimizing their business environments and enhancing industrial competitiveness to secure a favorable position in the reshaping of the global industrial chain.

Looking ahead, the global industrial landscape will exhibit trends of diversification, regionalization, and decentralization. Developed nations seek to reshape their manufacturing advantages through policy guidance and industrial repatriation, while developing countries actively embrace industrial transfers and accelerate their industrialization processes. This process will involve coexistence of cooperation and competition, opportunities and challenges.

TSMC's "American Dream" continues, but its encountered difficulties deserve reflection. China-US industrial transfer is a trend of the times, but it will not be a smooth journey. Only by understanding the situation, maximizing benefits and mitigating risks, can we seize the initiative in global industrial competition.

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