Wafer shortages have been affecting industries worldwide. To counter this, countries like the USA, South Korea, and even the EU as a whole are making big investments in silicon and float zone wafer fabs, with the goal of increasing production, developing localized supply chains, and reducing their dependence on others.
However, their plans have a weak link: failing to allocate enough resources to reduce the talent gap. Along with new factories, semiconductor manufacturers need a considerable increase in qualified employees to meet the world’s ever-growing demands.
We created this article to help you understand this issue. In it, we’ll explore the talent that the American semiconductor industry requires to achieve its wafer manufacturing goals and how it will change its approach to cultivating, sourcing, and retaining talent.
The CHIPS and Science Act investment aims to boost wafer manufacturing in the United States and reduce the country's reliance on foreign markets. The bill's multibillion-dollar funds began to be distributed in 2023, contributing to a 5% increase in the wafer manufacturing workforce, or approximately 18,000 jobs.
Private investments also facilitate the fast growth of the semiconductor industry in the United States. It is anticipated that these investments will result in over 160,000 new positions in engineering and technician support by 2032, in addition to positions in related construction occupations.
The projected talent gaps are significant, and many are likely to persist, albeit to a lesser extent, despite the fact that numerous initiatives are planned or currently underway to build these vital talent pipelines.
Since 2000, when it peaked, the US domestic semiconductor manufacturing workforce has been declining. Only 3% of the 52% of engineering graduates who take jobs in engineering join the semiconductor industry annually, or about 1,500 engineers.
The situation appears dire when you contrast these figures with the anticipated industry demand for talent. By 2029, McKinsey projects that 88,000 new semiconductor engineers will be required, a significant shortage given what the market can currently supply.
Similar talent statistics apply to semiconductor technicians. The annual increase in demand is expected to reach 75,000, with only about 1,000 new technicians entering the field.
There are now eighteen states where large-scale semiconductor fabrication operations are planned or where already-existing operations will grow. Increasing the number of talent pools for semiconductor engineering and technicians is the goal of public programs run at the local, state, and federal levels in many of those states.
The private sector has also launched a number of workforce development initiatives in an effort to close the widening talent gap. However, it is unlikely that these initiatives will create talent pipelines large enough to satisfy demand from all three of the main talent pools.
The proposed capacity expansion's primary target is severely short-supplied wafers, such as float-zone wafers. Superior float zone (FZ) silicon wafers are essential, albeit little-known, to the production of high-performance chips that power the AI revolution.
Unprecedented computing power, efficiency, and artificial intelligence capabilities can be unlocked by this special material, which is also why float zone wafers have grown to be one of the most sought-after semiconductors globally.
Depending on current growth rates and projected demand, the semiconductor industry may have a talent gap of between 59,000 and 146,000 workers by 2029. The need for talent far outweighs the supply of labor, even if the various initiatives aimed at closing the skills gap succeed in their declared goals.
The need for technicians is the only significant exception; should CHIPS Act programming meet its goals, a long-term talent shortage in technicians would be avoided. However, the implementation of technician training programs by 2024 would be necessary to achieve this outcome—a goal that was not entirely met in the first half of the year.
On the other hand, the industry's lack of engineers will continue to worsen until about 2028, when planned programs start to seriously increase supply and new demand growth starts to slow down.
To increase the US talent pipeline, semiconductor companies are collaborating with public, academic, and private entities nowadays, particularly in states where they have declared plans to expand or add new fabrication operations.
The biggest problem lies in cultivating engineering talent, which requires a greater investment of time and money than developing technician talent does.
Among their tactics are lowering attrition, raising recruitment rates from academic institutions and other sectors, and implementing other creative ideas to lower the demand for labor, which is likely to remain scarce.
Given these factors, one approach semiconductor companies can take to help bridge certain engineering talent gaps is upskilling and expanding technicians’ roles, either permanently or temporarily.
Furthermore, there will soon be a surge in demand for construction craft workers. Although the number of apprenticeships in construction has increased significantly in the US in recent years, less than 35 percent of them are completed.
This implies that semiconductor firms must contribute more money to workforce development initiatives in this vital field.
As demand for wafers and chips increases, both the public and private sectors are making investments to meet the world’s needs. However, most of the projects have been focused on developing and strengthening fabs, while they’ve relegated talent acquisition to second place.
This is worrisome, as the growth of the semiconductor industry in the US depends on the increase of the available workforce, including engineers, technicians, and specialized construction craft workers who can help develop the needed structures in an optimized manner.
On the other hand, the increase in the popularity of the IA industry could bring engineers and technicians who have shifted to other industries back and attract younger talents looking to grow in this area. Whatever happens here at Wafer World, we’ll be attentive. If you’re interested in learning more about semiconductors and wafer fabs, give us a call! We’re more than happy to help you with any questions you have.
