When the history of our time comes to be written, one thing that will amaze historians is how an entire civilisation managed to impale itself on its worship of optimisation and efficiency. This obsession is what underpinned the hubris of globalisation. Apple’s famous slogan “Designed by Apple in California, manufactured in China” became its guiding light. So long as products could be made available to consumers everywhere, it no longer mattered where they were made. Until it did.
We first twigged this when the pandemic struck, and we became suddenly aware of how fragile supply chains built to maximise efficiency could be. Shouldn’t we be optimising for resilience rather than efficiency, people wondered. And maybe our obsession with “offshoring” production to low-wage countries might not be such a good idea after all.
The rise of China and the resulting tensions between it and the United States brought this offshoring question into very sharp focus. For our civilisation (if that’s what it is) now runs on silicon as well as oil, and the really advanced silicon chips on which the future seems to depend are all made in one location – Taiwan – and by one company based there, the Taiwan Semiconductor Manufacturing Company (TSMC). That reality triggered the obvious question: what if Xi Jinping were to move on his oft-stated belief that Taiwan is rightfully part of China, just as Putin believed that Crimea rightfully belonged to Russia?
Cue a stampede to build advanced chip-fabrication plants outside Taiwan – notably in the US, Germany and Japan. With massive subsidies from the Biden administration, TSMC is spending $40bn building two huge factories in Phoenix, Arizona, and in the process is discovering that it’s a bigger challenge than it anticipated. Everyone involved, according to a fascinating study by the Financial Times, is finding themselves on the steepest of learning curves.
This is largely a product of culture shock as a formidably capable Asian company comes to terms with life in the US. TSMC is struggling with the American approach to construction contracting. It’s also finding it difficult to recruit enough skilled labour – not surprising given that advanced chip fabrication is the highest of hi-tech manufacturing and requires formidable skill levels in technicians. There appears to be a serious knowledge gap between American and Taiwanese technicians: at any rate, in June, TSMC had to send 500 additional specialists from Taiwan to help in the installation phase. Retaining local staff is much more difficult in Phoenix than in Taiwan, where TSMC is a coveted employer. The cumulative effect of all this is that the project is running behind schedule: the date for starting chip production has apparently been pushed back from next year to 2025.
The skills issue is critical because TSMC gives its technicians more flexibility and autonomy than western semiconductor companies such as Intel – which paradoxically may be why their yield levels (the proportion of fabricated chips that pass quality tests) – seem to be significantly higher than their competitors’. It also may have something to do with the fact that in Taiwan the fabrication plant is in close contact with the company’s R&D lab, which is only a brief train ride away. The equivalent distance when the Phoenix plant is up and running will be a 20-hour flight.
What’s fascinating about all this is how much of it comes down, not to finance or technology, but to people and what they know. In that sense the FT’s deep dive into TSMC’s travails reminded me of a striking piece of research conducted decades ago by the philosopher of science Harry Collins when he was a PhD student. Collins was interested in how knowledge gets transferred and intrigued by a particular piece of technology, the TEA laser. This was a device that was comprehensively documented in the physics literature but which research laboratories were unable to replicate. What Collins discovered was that “nobody could make the laser work if they hadn’t spent time in a laboratory that already had a working laser. There was very good information in the journals about how to build such a laser. But anybody who tried to put one together using written articles failed. They had something that looked like a laser on their bench, but it wouldn’t lase.”
What people didn’t understand, he realised, “was that the inductance of the leads was important… If you were working from just a circuit diagram, you naturally put this big heavy thing on the bench, and the lead from the capacitor to the top electrode would be too long and have too high an inductance for the laser to work. That is the kind of thing that is involved in the transfer of tacit knowledge.”
It is. It’s the kind of knowledge that is never written down and yet can be crucial, even in the highest of hi-tech enterprises. And you won’t find it in ChatGPT, either.
What I’m reading
Computer bias
Fascinating, depressing and instructive report on the Rest of World website about how generative AI reduces the world to stereotypes.
Deep thought
An interesting interview with an interesting man: Daniel Dennett on thinking and AI.
Conversation killer
A gloomy but perceptive essay by Om Malik on his blog on the death of the social internet.