The secret mountain

Taiwan's chip manufacturer TSMC comes to Dresden. A visit on site.

Reading time: 5 Minutes

Eine junge Frau steht vor dem Logo der Firma TSMC.
In Taiwan, the chip company TSMC is also known as the secret mountain. What's behind it. Photo: private

From Luisa Zenker

Hsinchu/Dresden. A whistle blows across the cobbled square. Then a man with a whistle appears. He shouts "No" and waves his arms. He and his two colleagues in high-visibility vests are leaning against a barrier, behind them a glass high-rise building with the sun reflected in the window panes. If you manage to see all the way up, you can make out the red lettering. "TSMC" is written on the light gray wall, woven into a globe full of microchips.
The glass building in the Taiwanese city of Hsinchu is a one of the largest chip manufacturers in the world. After all, it produces 60 percent of all semiconductor chips. The square transistors, which can only be recognized with a magnifying glass, are indispensable, as they are found in every smartphone, coffee machine, car, computer and wind turbine. Artificial intelligence technologies in particular rely on the chip manufacturer, including defense systems. On this day, a TSMC spokesperson will provide an insight into the world's largest chip manufacturer. However, he cannot disclose his name. Any information from his mouth must go through the press office. "Our secret mountain" is how TSMC is often referred to in Taiwan. On the island, even grandmothers know how a chip works. After all, the entire school system is designed to train future electrical engineers.
However, hardly anyone manages to get inside the factory; even the Saxon Minister of Economic Affairs, Martin Dulig (SPD), had to be content with seeing only the bare essentials of TSMC.

The company can boast that it is responsible for 7.9 percent of Taiwan's gross domestic product. 75,000 people and 15 factories work for TSMC on the island. However, visitors can only see the outer façade. And the TSMC Museum. The exhibition is always fully booked, especially since the announcement that TSMC is expanding into western countries. Several films present the production rooms in the museum, accompanied by theatrical music. The globe cannot be shown often enough. Nevertheless, the PR film makes it clear that the Taiwanese company is closely linked to the continents - the production machines come from the Netherlands, the silicon wafers come from Japan, and the chips are shipped to the USA and China in particular.
At the end of the exhibition, a large photo of a man with white hair and a black suit is projected onto the wall. It is Morris Chang, the founder of the factory. "Ask Dr. Morris Chang a question," the computer suggests. Why is TSMC so successful? The image begins to move. Morris Chang takes his hands apart and begins to tell the success story, which starts in 1987. Unlike other semiconductor manufacturers, TSMC focused on a single step in the production chain: manufacturing. The company never competed with its customers.

Long working hours are normal
The speaker now leads us out of the museum into the bright sunlight, crossing the street past hundreds of scooters, which are particularly popular in Taiwan. The factory is difficult to reach by public transport. The speaker wants to show us the company's own wastewater treatment plant. Photos and names of the engineers working there may not be published. The reason for the reticence: conservative company management, fear of espionage, dependencies and US-China policy - there are many speculations, but no official explanations. Back in the summer, the Saxon delegation was also given a tour of the waterworks, where pipes branch out and come together again. After all, water is essential for chip production; in 2019, the factories consumed 63 million tons, and despite a recycling rate of 90%, the issue remains a problem. During a drought in 2021, numerous trucks had to transport water to the factories, and the drought led to conflicts between industry and farmers, whose water pressure was reduced. TSMC must also expect longer periods of drought in the future due to climate change, the company itself writes in its annual report. The speaker says goodbye at this point, surrounded by numerous factory buildings. You look in vain for apartments. There is only a petrol station and a small supermarket called Seven Eleven. This chain can be found on every corner in Taiwan; sandwiches, soft drinks and chocolates are available here 24/7. An indication of what work means in Taiwan.
A 26-year-old TSMC engineer in a dark-colored T-shirt walks straight towards the store. "Many work 10 hours, five days a week," he reports. "Everyone is responsible for their project and has to solve the problems by a deadline." He is not aware of any trade unions. He can live well with 20 vacation days per year because the salary is right. "It's more than the average. As a senior engineer, you earn 1.8 million Taiwanese dollars a year." That's the equivalent of 52,800 euros. The average salary in Taiwan is around a third of that.
But how does he feel about TSMC's expansion? The company wants to bring 200 Taiwanese specialists to the factory in Dresden, will he be one of them? Aaron shakes his head. "I don't speak English that well and I love the environment here." A colleague of his adds: "Germany doesn't produce the most advanced chips." In fact, only chips sized 16/12 nanometers (nm) and 28/22 nm are to be produced in Dresden. The automotive industry does not need the 2 nm chips. For the time being, these will continue to be produced in the secret heart of Taiwan, where employees are not allowed to take cell phones.

Car manufacturers as the largest customers
To penetrate the secret mountain a little more, it helps to ask the founder of the technology company Macronix to knock. The factory is just a few streets away. The company, which employs 4,000 people, manufactures memory chips for Nintendo but its biggest customers are car manufacturers. The 75-year-old founder Miin Wu has worked with TSMC for a long time as a strategic partner. "Everyone here is working really hard," says Wu, describing the Taiwanese company's secret recipe. Everyone works very hard .
"I mean, long working hours are normal throughout the country, it's a Taiwanese characteristic," confirms tech journalist Jon Y, who has spoken to many TSMC employees and suppliers and knows of numerous cases of unpaid overtime at the company. "They will have to make some concessions," he says with regard to TSMC's decision to locate in Saxony. Especially as finding skilled workers is becoming more difficult, according to Jon Y. Because the software industry in Taiwan also pays better. "And has a less aggressive culture."
According to him, skilled workers, water and green energy sources are the biggest challenges for TSMC. The chip company wants to quadruple its share of renewable energy by 2030. This is because the share of renewables in Taiwan is currently only 8 percent.
But there is something else: security policy. Taiwan is only recognized by 13 states. The young democracy sees itself as independent, while Beijing considers Taiwan to be part of the People's Republic and threatens to conquer it.

Protective shield or not?
Some now fear that the location decision increases the likelihood of Taiwan being attacked by China. This is because TSMC is seen as a protective shield. The argument: in the event of an invasion, China would primarily be cutting its own flesh because the People's Republic would no longer have access to the urgently needed chips in the event of an attack. If you ask the Taiwanese about the shield theory, many wave it off: Macronix boss Wu thinks nothing of it. "The fact that Taiwan is a leader in semiconductor technology could even increase the desire to conquer Taiwan." The Taiwanese foreign minister first asked the question: "Do you know how small a chip is? TSMC also recently announced: "China will not attack Taiwan over semiconductors."
But whether it is a protective shield or not - why is TSMC expanding at all, given that the supplier system in Taiwan is perfect and inexpensive, with hundreds of suppliers serving the company. Especially as, according to Miin W, it is very expensive to set up semiconductor companies abroad. TSMC itself explains that it wants to "strengthen customer confidence, expand future growth potential and reach more global professionals" by relocating.
But TSMC's major customers are also exerting pressure: "TSMC has no choice. They have to go where their customers are," says journalist Jon Y. If TSMC doesn't get the money, it will go to its competitors Samsung or Intel, says the journalist, who is looking forward to the advanced technologies. TSMC recently announced that it would conduct research beyond 2nm. "When the next generation of chips becomes public, it is going to be crazy."

The report was carried out as part of a research trip by Journalists Network e.V.

This might also interest you: