TSMC will invest hundreds of billions of dollars in the US, seemingly avoiding tariff sanctions for now, but a collective lawsuit filed by former employees accusing TSMC of personnel disputes is still ongoing. TSMC has promised to make massive investments in Arizona, USA over the next four years, responding to Trump's "America First" manufacturing policy, seemingly temporarily avoiding the threat of high tariffs, but a larger personnel storm is brewing.

TSMC has already set up two factories in Arizona, with a planned investment of $65 billion, of which $6 billion comes from the Chip and Science Act implemented by Biden in 2022. Even though the news of TSMC's large-scale investment in the US has been broadcast on major news networks around the world, Trump's attitude towards tariff sanctions on countries like Canada and Mexico has been inconsistent, and Taiwan, which has been repeatedly accused of stealing chip business from the US, may be able to escape the crisis through TSMC's investment and largesse.

TSMC is facing a collective lawsuit from former employees in the US, accusing TSMC of racial discrimination and hostility towards "non-East Asians", excluding "Americans", and having an improper workplace culture and sexual behavior. TSMC denies all allegations and has received support from some employees in Arizona. But to establish a long-term presence in the US semiconductor industry, TSMC will inevitably face more cultural shocks from American society, and TSMC needs to be prepared to manage American employees. TSMC has issued a statement refusing to comment on the pending lawsuit, and claimed to be proud of its team of nearly 3,000 employees.

US employees make multiple accusations against TSMC

When TSMC just started its business in the US in 2023, its factory in Arizona was delayed in production due to its inability to reach a labor agreement with the local union, and a series of personnel conflicts have occurred, with a showdown in court, including a lawsuit filed last August by a former HR female executive, who served as the talent recruitment vice president at TSMC's North American headquarters in San Jose, California in February 2023, accusing TSMC's top management of "racial and civic discrimination" and a "hostile work environment".

The complaint alleges that non-East Asian, non-Taiwanese and non-Chinese employees are often yelled at and reprimanded by the Taiwanese management, including calling them lazy and stupid in front of their colleagues, simply because they are Americans. TSMC is using the funding subsidies provided by the Biden administration, but does not hire American citizens first, and the priority for local recruitment is Taiwanese, Chinese and East Asians, most of whom are employees who have come to the US to work through TSMC work visas.

In response to inquiries from The Washington Post, TSMC said it has about 2,200 employees in the US, half of whom are from Taiwan, and the current number of employees has approached 3,000, most of whom are Americans.

The plaintiffs in the TSMC lawsuit have expanded to nearly 30, 16 of whom reside in Arizona and self-identify as white, Latino, African American and other Asian ethnicities, including Koreans and Iranians.

The plaintiffs filed another motion last month to amend the original complaint and add new allegations, including prostitution, drug use, sexual acts and improper handling of chemicals. TSMC responded by requesting the court to seal these new allegations from the public record, calling them "hearsay", "rumors" and "scandals". TSMC's representative lawyers refuted in the documents that the new allegations are full of dirty little stories containing sex, drugs and all kinds of sensational stories, and denied them all.

On February 27 this year, a federal judge approved part of TSMC's motion to seal the plaintiffs' amended complaint, which contained a large number of allegations of anonymous sexual assaults, only listing the names of non-litigants as suspects, and due to the sealing of the case, no further details are available to the public.

In recent years, Taiwan has repeatedly reported incidents of sexual harassment and workplace bullying, not only in small and medium-sized enterprises, but also in the high-tech industry, with news of employees being exploited and insulted in the workplace. In the US, the annual salary of a mid-to-senior engineer is around $300,000, which is the norm. In order to compete for high-tech talent, US tech giants not only offer high salaries, but also provide a relatively friendly work environment for engineers to retain talent. In contrast, the compensation and work environment for senior engineers in Taiwan are far lower than in countries like Japan, South Korea and the US, and Taiwanese companies like to see employees work overtime, which has led to the strange phenomenon where some truly capable people can complete all their work in an hour but are still scolded, while the slackers who just hang around the office are praised for working overtime. YouTuber Zhiqi Qiqi also often criticizes Taiwan's bizarre workplace culture, and in the tech industry, results are more important than anything else, not simply using "work hours" to affirm work performance and attitude.

Most full-time engineers in the US are on a responsibility-based system rather than an hourly wage system. According to the US Department of Labor, employees earning more than $2,000 per week are not subject to labor laws, and the salaries of most engineers exceed the Department of Labor's standards, and they do not report overtime pay. This lawsuit is not really about money, but rather that TSMC, as the world's largest foundry, is setting up factories in the US, but is causing a huge cultural shock to the local people and senior engineers, while these bizarre treatments are commonplace in many traditional workplaces in Taiwan.

TSMC's expansion of its business to the US is an honor for Taiwan, but TSMC has encountered strong workplace cultural shocks in the US, facing racial discrimination and anti-American labor allegations, which could lead to TSMC being marginalized by American society, unable to establish a good reputation as an excellent company, and forming a negative perception of Asian companies among Americans. Before the verdict, all are presumed innocent.