TSMC has not officially announced anything, but Taiwan's semiconductor facility engineering supply chain is already rushing to Texas after reports that the company is discussing a collaboration with Elon Musk's "Terafab" plan. DYC chairman Chung-Ping Hsieh said his company only received the news last week and has already begun mapping out a Texas strategy, while some faster-moving Taiwan contractors have even set up local offices.
Although a final agreement and formal engineering awards are still far off, and the project timetable remains unclear, the semiconductor facility supply chain has already started assessing Texas bases, manpower, engineering licenses, and partner companies.
Hsieh said that once information is obtained, planning must start immediately. Waiting until orders are signed can mean missing the entry window.
He said TSMC's reported consideration of Texas at this moment could involve politics, as well as market conditions, power, water resources, and customer demand.
On whether Terafab could ultimately surpass TSMC's Arizona buildout in scale, he said that given Musk's chip demand, the project will not be small.
TSMC's Arizona project currently has seven contractors involved in related work, including two Taiwan firms and five US local firms. DYC currently holds the largest share of the engineering work and is also involved in advanced packaging-related construction.
Hsieh said that if Terafab develops advanced wafer manufacturing at the same time, key advanced packaging steps will also have to follow. After wafer dicing, chips still need to be stacked, and processes such as CoWoS already carry high barriers to entry.
Secondary systems must be prefabricated in advance
Hsieh said DYC is still in the planning stage in Texas, but it is already preparing earlier than many peers, with some firms having gone directly to establish offices there. For semiconductor facility contractors, the reason to "move first and win first" differs from that of ordinary equipment suppliers.
DYC mainly handles secondary hook-up work. The actual site entry comes after large mechanical and electrical work is completed and around the point when the fab formally moves into cleanroom control. Once a customer confirms the equipment installation schedule, secondary hook-up contractors do not wait for the machines to arrive before starting. They must prefabricate in advance and then connect immediately after the equipment enters the plant.
This is especially true because TSMC has strict requirements for equipment power-on timing. After tools arrive, power must be connected within a limited number of days, so suppliers must secure information early and complete prefabrication ahead of time. Although secondary hook-up vendors are not the earliest construction teams to enter a wafer fab, site bases, personnel, licenses and partners must all be in place before real work begins.
Hsieh said this is particularly true in the US, where the first step is to have a local base, then send staff, apply for qualifications, and understand local construction rules.
DYC formally went to Arizona in 2022. Hsieh said the company had only recently been established at the time, but judged that it had to develop in the US and aggressively sought opportunities. Arizona P1 is now complete and in mass production, with engineering demand moving into later stages such as P2, and DYC continues to participate.
As a result, even if Terafab has not yet reached formal bidding, the supply chain must still complete early planning for sites and manpower.
States have different rules; manpower remains toughest issue
Hsieh said one major upfront task is to re-learn local regulations. US engineering rules are not a single nationwide system; requirements differ on issues such as what permits are needed to energize equipment and what certifications are required to install piping or open electrical panels.
To take on related work, contractors must have professionals who meet the requirements of the specific state, and TSMC does not currently accept contractors simply "renting" licenses. People with the relevant credentials must be formally hired by the company before it is qualified to take the job.
Hsieh said DYC has begun looking for Taiwan-based partner firms, but many of the teams willing to go to the US in the past have already moved to Arizona. If Texas triggers another wave of large semiconductor fab construction, a new batch of workers will be needed. DYC plans to use its US base to allocate manpower in tiers, sending younger engineers with some capability to Arizona and moving Arizona staff with US fab experience to Texas.
Texas already has semiconductor players such as Samsung Electronics, and if Terafab and TSMC expand investment further, they will inevitably join the competition for local engineering talent.
Hsieh believes poaching between companies will be hard to avoid. TSMC has brand strength and scale, while Musk has deep pockets, so competition in the local labor market will only intensify.
TSMC wants to quickly replicate Taiwan's mature fab-building model in the US, and many projects have gradually taken on a more modular assembly approach. But on the ground, the work culture of US labor differs from Taiwan's. Challenges include schedule control, team coordination, and cost. Price is another major factor.
He also stated that "the US lacks workers, and Taiwan lacks workers too." Younger generations are less willing to enter related engineering jobs because the work is hard and stressful, and labor shortages are becoming more serious. About two months ago, TSMC also began loosening some engineering labor policies for the first time, telling suppliers that secondary hook-up work could start bringing in foreign workers, something that had not been allowed before. DYC has also started applying for foreign workers, initially focusing on Vietnamese labor.
Article translated by Charlene Chen and edited by Jack Wu
