The massive microchip manufacturing firm, the Taiwan Semiconductor Manufacturing Company (TSMC), finds itself facing a class-action lawsuit brought by over a dozen of its current and former employees. TSMC was brought into Arizona through the Biden administration’s CHIPS Act.
The charge presented is a potentially devastating one: that TSMC is engaging in “anti-American” hiring and workplace bias and is discriminating against American workers while favoring Taiwanese nationals imported on work visas. For a firm that is now deeply tied to the political fortunes of the outgoing Democratic administration, and the now-minority party in Congress, the allegations are stunning.
The lawsuit makes the claim that TSMC employs over 2,668 workers in its North American operations and that the vast majority of them are Asian, stating, “This grossly disproportionate workforce is the result of TSMC’s intentional pattern and practice of employment discrimination against individuals who are not Asian and not Taiwanese citizens, including discrimination in hiring, staffing, and termination decisions.”
NOW in Arizona: @POTUS said he "owes an awful lot" to Taiwan Semiconductor Manufacturing Company because founder Morris Chang's wife, Sophie, worked Biden's first Senate campaign. Perhaps that's why Biden told @pdoocy today that the border isn't important. Scratching backs! pic.twitter.com/wFFYncZIMV
In the text of the suit, attorneys representing the workers note, “TSMC’s bias in favor of Asians and Taiwanese citizens was even apparent when it was hiring construction workers to build its first Arizona fab (via TSMC affiliates United Integrated Services (UIS) and Marketech International Corp.). TSMC chairman Mark Liu complained of “an insufficient amount of skilled workers” to build the facility and planned to fly workers in from Taiwan. TSMC agreed to focus on local hiring for those positions only after massive and public outcry from Arizona labor unions.”
The incident referenced was covered by AZ Free News in July 2023 when Liu made the complaint coinciding with President Joe Biden’s first visit to Arizona to tour the facility. Biden told reporters at the time that he “owes an awful lot” to TSMC with Corrinne Murdock observing that founder Morris Chang’s wife worked on his first Senate campaign.
NOW in Arizona: @POTUS said he "owes an awful lot" to Taiwan Semiconductor Manufacturing Company because founder Morris Chang's wife, Sophie, worked Biden's first Senate campaign. Perhaps that's why Biden told @pdoocy today that the border isn't important. Scratching backs! pic.twitter.com/wFFYncZIMV
Phoenix Mayor Kate Gallego also reportedly holds ties to TSMC with a former senior policy advisor and campaign donor, Laura Franco French, serving as TSMC’s director of state government relation. French took the role directly following her tenure with Gallego’s office.
At the time, Liu told reporters, “We are encountering certain challenges, as there is an insufficient amount of skilled workers with the specialized expertise required for equipment installation in a semiconductor-grade facility.”
“While we are working to improve the situation, including sending experienced technicians from Taiwan to train the local skilled workers for a short period of time, we expect the production schedule of N4 process technology to be pushed out to 2025.”
The suit notes that TSMC applied for and received a $6.6 billion grant from the Federal Government via the CHIPS Act predicated on a diverse hiring policy and claims the firm “willfully disregarded diversity commitments TSMC made in the CHIPS Act,” adding that approximately half of TSMC’s Arizona work force of 2,200 people are Taiwan nationals on work visas.
Daniel Kotchen, one of the attorneys representing the plaintiffs, told AZFamily, “If you are receiving federal funding to create jobs in the U.S., it is your responsibility to live up to the rules and laws under the U.S.”
Deborah Howington, a current talent acquisition executive at TSMC, was the first plaintiff claimed to have witnessed the culture of illegal, discriminatory practices that favored Taiwanese candidates and employees first-hand. As reported by Forbes, Howington alleges in the suit that TSMC specifically sought candidates from Taiwan for jobs in the U.S. and confidentially employed an “Asian headhunter,” to attract these recruits.
A company spokesperson responding to questions on the lawsuit told Forbes, “TSMC believes strongly in the value of a diverse workforce and we hire and promote without regard to gender, religion, race, nationality, or political affiliation because we respect differences, and believe that equal employment opportunities strengthen our competitiveness.”
Plans by state and local leadership to establish Arizona as a leader in semiconductor manufacturing have stalled due to a lack of skilled workers.
Taiwan Semiconductor Manufacturing Company (TSMC) announced last week that it will delay production until 2025: a full year after their initially planned launch. TSMC produces 90 percent of the world’s microchips, supplying major products like Apple’s iPhone, iPad, and Mac computers.
TSMC Chair Mark Liu indicated in last week’s second quarter earnings call that efforts on their end to gin up an adequate workforce couldn’t counter the limited talent pool in the country.
“We are encountering certain challenges, as there is an insufficient amount of skilled workers with those specialized expertise required for equipment installation in a semiconductor-grade facility,” said Liu. “While we are working to improve the situation, including sending experienced technicians from Taiwan to train the local skilled workers for a short period of time, we expect the production schedule of N4 process technology to be pushed out to 2025.”
Maricopa County Community Colleges (MCCC) partnered with Intel to launch a program last year to supplement the burgeoning semiconductor industry’s workforce, estimated to be around 3,000 workers between Intel and TSMC. Students who pass certification receive a $270 stipend to cover the tuition cost.
TSMC raised their investment in the state from $12 billion to $40 billion ahead of President Joe Biden’s visit to tour the Phoenix facility last year.
Biden’s TSMC appearance marked his first and only trip to the state during his entire presidency — even with the ongoing border crisis. Biden justified prioritization of a manufacturing facility over the border crisis by claiming the border wasn’t important.
Biden’s first and, so far, only interest in visiting Arizona may align with his consistent desire to prioritize business and personal interests over national interests (as reflected by his alleged involvement in the laptop debacle revealing corrupt foreign business dealings by his son, Hunter Biden). Biden said during his TSMC speech that he “owe[s] an awful lot” to TSMC because the wife of its founder, Morris Chang, worked his first Senate campaign.
NOW in Arizona: @POTUS said he "owes an awful lot" to Taiwan Semiconductor Manufacturing Company because founder Morris Chang's wife, Sophie, worked Biden's first Senate campaign. Perhaps that's why Biden told @pdoocy today that the border isn't important. Scratching backs! pic.twitter.com/wFFYncZIMV
Phoenix Mayor Kate Gallego also has ties to TSMC. Gallego’s former senior policy advisor and campaign donor, Laura Franco French, serves as TSMC’s director of state government relations. Franco French joined TSMC in 2021 immediately after departing Gallego’s office, where she’d served since Gallego became mayor in 2019.
Gallego’s TSMC connection may explain her apparent lack of concern with TSMC’s delay. When asked about the TSMC issue with obtaining skilled workers during an interview on Sunday, Gallego responded with a non-answer.
“We are very excited to be the future of semiconductors. It’s so important that we’re onshoring manufacturing of these essential devices in the United States and we’re going to take an all-hands-on deck approach to make sure it is successful,” said Gallego. “President Biden has picked Phoenix as one of the innovation job hubs and will be able to partner with the US Department of Commerce in particular, but across his administration to do training for our residents. We have a very successful project with our community college where people can get a six-week certificate in semiconductors that’s produced hundreds of graduates so far, but we know we have to turn it up so that we can deliver not just for Arizona but for the world.”
In addition to the shortage of skilled workers, TSMC’s development in Arizona may be delayed due to other concerns with health and environmental impact.
Perfluoroalkyl and polyfluoroalkyl substances (PFAS) — dubbed “forever chemicals” for their resistance to breaking down — are integral to microchip production. PFAS have been linked to a host of serious health issues concerning fertility, fetal development, bone variations, behavioral changes, accelerated puberty, high blood pressure, liver disease, cancer, lowered immunity, hormone disruption, thyroid disease, high cholesterol, and obesity. Chemical waste from factory production has led to PFAS contaminating water and, consequently, humans and the environment.
The Biden administration has progressively focused on PFAS with increasing pressure. Last June, the Environmental Protection Agency (EPA) issued four drinking water health advisories for PFAS. Last August, the EPA proposed designating two of the most widely used PFAS as hazardous substances. Last December, the EPA required facilities to report on all PFAS usage. In March, the EPA issued its first-ever proposal to regulate PFAS in drinking water.
The Biden administration has offered $3 billion in grants to states and territories to clean up PFAS in drinking water; it also launched an analytics tool for the public to track PFAS contamination.
3M announced in December that it would halt PFAs production by 2025, a move which set off alarm bells for TSMC and other chipmakers. The announcement came ahead of the company’s $10.5 to $12.5 billion settlement for drinking water contamination.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
President Joe Biden will make his first visit to Arizona, after nearly two years in office.
The president will come to north Phoenix to celebrate the development of the Taiwan Semiconductor Manufacturing Company (TSMC) plant. The foreign company is scheduled to begin its Phoenix operations in 2024.
The Biden administration has a keen interest in domestic semiconductor manufacturing — the president signed the CHIPS and Science Act in August, the day after the FBI raid on former President Donald Trump’s Mar-a-Lago home. Senators Mark Kelly and Krysten Sinema focused on the act’s passage rather than the raid. The pair championed the legislation as means of improving the flagging economy.
The closest Biden came to visiting was last February. Biden, along with Vice President Kamala Harris, engaged in a virtual tour of an Arizona State University (ASU) vaccination site at State Farm.
Earlier this week, Vice President Harris and I took a virtual tour of a vaccination site in Arizona. Because of the hard work of these folks — and countless others across the country — we’re going to beat this virus once and for all. pic.twitter.com/xekXB967h5
Former President Donald Trump first visited Arizona as president in August 2017, several weeks after the Charlottesville, Virginia “Unite the Right” protest after which several counter-protesters were run over and killed. He visited again in October 2018.
Harris has yet to visit the state, either. Apart from the virtual ASU tour, the closest the vice president came to visiting Arizona was a trip to the Arizona-Nevada border along Lake Mead.
Yesterday, I visited Lake Mead, which is a crucial source of water for 25 million people, including those living in Nevada, California, and Arizona. Due to the climate crisis, Lake Mead has dropped to its lowest level ever–causing water shortages for some of these communities. pic.twitter.com/EAQgl4m8n7
The last time the vice president came to the state was in October 2020 on her campaign trail. Harris visited Tucson and Phoenix.
Harris remains absent from the state, despite designation as border czar and Arizona being one of the states hardest hit by the border crisis under their administration. To date, the vice president has only made one border trip to Texas, after much resistance. Legislators and pundits criticized that visit, however, contending that Harris made a brief stop at a Border Patrol station miles from the site of the border crisis.
A detailed record of Biden’s public calendar is available here. The LA Times maintains an open-source data archive of Harris’ public calendar.
Although no border crisis existed at the time, Vice President Mike Pence visited Arizona multiple times in 2019. In April of that year, he addressed a controversial razor wire topping the border wall in Nogales. He came in March to speak with the National Association of Manufacturers and tour the Drug Enforcement Agency facility and returned in October to visit the Caterpillar manufacturing site.
Prior to that, Pence visited Arizona several other times to visit with Governor Doug Ducey and other lawmakers, including his stumping for former Republican Senator Martha McSally.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
