TSMC under fire after lawsuit alleges huge discrimination against American workers...in the US

Since 2021, TSMC’s Arizona facility has promised to strengthen the US semiconductor supply chain.

UPDATED 5 DAYS AGO

One American worker, speaking anonymously, described unsafe practices he witnessed among the Taiwanese crews.

Phoenix, Arizona: Taiwan Semiconductor Manufacturing Company (TSMC), the global leader in semiconductor production, is under fire after a series of allegations surrounding its North Phoenix facility.

Despite receiving more than $11 billion in federal subsidies to bolster domestic manufacturing and create US jobs, TSMC faces criticism for its treatment of American workers, safety violations, and alleged discriminatory hiring practices.

Without a doubt the industry of the future.

Since breaking ground in 2021, TSMC’s Arizona facility has promised to strengthen the US semiconductor supply chain. The company initially hired thousands of unionized American workers to construct its facility, but operations quickly turned contentious. Workers allege that TSMC management criticized their productivity, labeling them as “lazy” and “stupid", and subsequently brought in busloads of visa workers from Taiwan, displacing US employees.

One American worker, speaking anonymously, described unsafe practices he witnessed among the Taiwanese crews. “They were doing things that were obviously unsafe — standing on ductwork or piping to finish jobs. If we did that, we’d be kicked off the job indefinitely,” he said. The worker also alleged that TSMC managers ignored safety protocols for foreign crews while strictly enforcing them for American workers.

Taiwan's semiconductor industry is a cornerstone of the global technology ecosystem, driven by leading companies like TSMC, UMC, and MediaTek.

These claims mirror allegations made in a class-action lawsuit against TSMC, which accuses the company of creating a hostile work environment for American employees while giving preferential treatment to visa holders from East Asia.

The scrutiny deepened after an incident in May, when a blast from a pressurized waste truck killed a worker at the Arizona site. State regulators fined TSMC for safety violations related to the accident, further intensifying criticism over the company’s alleged neglect of workplace safety. US workers have reported that their safety concerns were routinely dismissed, exacerbating tensions on-site.

While a majority of chips are still made in South Korea, Taiwan and China, there is shift to other markets, primarily the US.

The class-action lawsuit also raises questions about TSMC’s hiring practices, pointing out that half of the 2,200 workers at the Arizona facility were visa holders from Taiwan, despite TSMC’s federal subsidies being tied to job creation for Americans. The lawsuit alleges that American workers were systematically phased out in favor of foreign employees, undermining the promise of domestic job growth.

TSMC has denied any wrongdoing and emphasizing the company’s commitment to meeting safety and labor standards.

TSMC in the US courts

Discrimination Lawsuit (2024): In August 2024, a group of current and former US employees filed a class-action lawsuit against TSMC, alleging discriminatory hiring practices favoring East Asian individuals over others. The plaintiffs claim that TSMC's employment practices include an "intentional pattern and practice of employment discrimination against individuals who are not of East Asian race, not of Taiwanese or Chinese national origin, and who are not citizens of Taiwan or China, including discrimination in hiring, staffing, promotion, and retention/termination decisions."

Patent Infringement Dispute with GlobalFoundries (2019): In August 2019, GlobalFoundries filed lawsuits against TSMC in the US and Germany, alleging that TSMC's 7nm, 10nm, 12nm, 16nm, and 28nm nodes infringed on 16 of its patents. TSMC responded by filing counter-lawsuits in October 2019, accusing GlobalFoundries of infringing 25 of its patents. The dispute was resolved in October 2019 when both companies agreed to a broad cross-license of each other's existing semiconductor patents and new patents filed over the next ten years.

Trade Restriction Violation Investigation (2024): In October 2024, reports emerged that a TSMC-manufactured chip was found in a Huawei AI processor, potentially breaching U.S. trade restrictions. TSMC suspended shipments to the Chinese chip designer Sophgo and initiated an investigation. This incident raised concerns about possible penalties from the US Department of Commerce.