Tech Worker Crisis Looms In Semiconductor Industry

By John Oncea, Editor

The CHIPS and Science Act of 2022 is set to boost the position of the U.S. in the global semiconductor industry. But, with an anticipated increase in demand for workers in the field, a looming talent shortage challenge could muck things up.

Jack and Nick shared a common love of baseball. One day, Jack died, leaving Nick inconsolable. A few weeks later, Nick heard someone calling his name. He looked up and standing on a cloud was his old pal.

“Nick,” Jack called down, “I have good news and bad news. The good news is there’s baseball in heaven!"

“Great!” said Nick. “What’s the bad news?”

“You’re pitching Friday.”

The semiconductor industry has something in common with our friends Jack and Nick; good news and bad news.

Good News, Bad News For Semiconductors

The good news is the global semiconductor market is projected to grow from $573.44 billion in 2022 to $1,380.79 billion in 2029, with a compound annual growth rate (CAGR) of 12.2%, according to Fortune Business Insights.

“With demand surpassing 1.14 trillion chips per year or 128 per person, businesses and governments alike are looking to capitalize on this lucrative opportunity by investing billions into their domestic markets to become self-sufficient,” adds Edge Investment.

Edge Investment lists three reasons to be bullish on semiconductor stocks:

• Semiconductors are deflationary by nature as the cost to produce them halves every two years, while the number of transistors/computing power doubles in that same time (Moore’s Law).
• Demand for high-tech semiconductor chips is growing, and of increasing importance, as society trends toward greater digital dependence; for example, the average American will spend approximately 44 days on their phone in 2022.
• Governments are increasing investment in this area, with the U.S. leading the way by granting over $52 billion in subsidies to semiconductor firms.

So, what’s the bad news? The semiconductor industry is facing a shortage of technical workers, with an estimated 67,000 jobs for technicians, computer scientists, and engineers — and 1.4 million such jobs across the U.S. economy — projected to go unfilled by 2030, according to a Semiconductor Industry Association (SIA)/Oxford Economics study.

The report, “Chipping Away: Assessing and Addressing the Labor Market Gap Facing the U.S. Semiconductor Industry,” offers suggestions for policies that can assist in closing the talent gap in the U.S. semiconductor industry. These recommendations aim to complement the workforce development initiatives that are already being undertaken by semiconductor companies throughout the country.

To address the talent gap, the SIA-Oxford Economics study presents three core recommendations to strengthen the U.S. technical workforce, according to an SIA press release. These recommendations are:

• Strengthen support for regional partnerships and programs aimed at growing the pipeline for skilled technicians for semiconductor manufacturing and other advanced manufacturing sectors.
• Growing the domestic STEM pipeline for engineers and computer scientists is vital to the semiconductor industry and other sectors that are critical to the future economy.
• Retain and attract more international advanced degree students within the U.S. economy.

“Our analysis showcases the critical high-skilled roles across the semiconductor sector and the likely skill shortages the industry will face if proactive talent development measures are not taken,” said Dan Martin, senior economist and lead researcher at Oxford Economics. “The CHIPS Act set the stage for U.S. long-run investment and increased global competitiveness in semiconductor design and production. Moving forward, tens of thousands of new post-secondary-trained workers will need to fill the roles created as the industry increases their productive capacity in the U.S.”

Back To School

National Defense notes the SIA/Oxford Economics study projects a gap of 26,400 technicians by 2030 and, for more than three-quarters of technicians, “Credentials can take between six to 24 months to acquire, which is leading semiconductor companies to develop and expand programs that will recruit and teach skills to new workers.”

“Expanding certification boot camps, apprenticeships and other training programs at community and technical colleges located near new and expanding semiconductor fabs would, therefore, be an effective means to help close the workforce gap for technicians. Curricula and education solutions tailored to the semiconductor industry will ensure students are prepared for future employment,” the report stated.

The report suggests that to meet the demand for engineers and computer scientists in the semiconductor industry and boost the U.S. economy, there needs to be a wider push to expand the science, technology, engineering, and mathematics pipeline. These postsecondary education programs usually take between four to 10 years to complete.

“Closing these gaps requires a comprehensive STEM strategy, starting with boosting student interest in STEM opportunities at the K–12 level,” the report stated. “At the college level, these students should be encouraged to work in a STEM profession, as well as to be made aware of job opportunities in the semiconductor industry.”

Tech Worker Shortage Impacts More That The Semiconductor Industry

The shortage of technical workers is expected to affect industries beyond semiconductors. According to the study, medical technology, clean energy, AI, and advanced manufacturing are among the sectors that are likely to experience the effects of the talent gap.

Tech Brew writes, “Approximately 3.85 million new technical jobs will be created across the U.S. economy in the next seven years, but 1.4 million may go unfilled. According to SIA, we’ll need a multipronged approach to address the impending shortage.”

Recommendations offered by Tech Brew include “investing in partnerships and initiatives to grow the technician pipeline, like boot camps, apprenticeships, and community college training programs, ideally located near semiconductor fabrication plants.” Another suggestion would be to increase the number of students pursuing STEM fields and hire more STEM graduates, with a focus on industries such as the semiconductor industry and other vital sectors for the future economy. This would help to expand the engineering pipeline.

One other possible fix, according to the study, would be to “provide easier pathways to permanent U.S. residency” as that “has the potential to provide an immediate boost to the domestic talent pool available to the semiconductor industry and other technology industries of strategic importance.”

“Reforms to high-skilled immigration policy that lower the barriers to U.S. firms seeking to recruit and retain international students with advanced degrees can help to meet near-term skills gaps facing the semiconductor and other key technology industries,” the report concluded.

No Simple Fix

For many years, the U.S. semiconductor industry has been actively working to recruit, train, and employ a diverse and skilled workforce. Chip companies all over the country have established partnerships with community colleges, technical schools, apprenticeship programs, universities, laboratories, and regional education networks to expand their workforce development programs.

With the industry expanding rapidly to meet the increasing demand from CHIPS investments, these companies are also expanding their workforce development efforts. However, the U.S. government needs to collaborate with industry and academic institutions to prioritize solutions that will address the skills gap affecting not only the semiconductor industry but also the broader economy.