The global semiconductor industry’s shortage of workers is likely the largest impediment to growth—the latest example coming this week from a fab-construction delay announced by Taiwan Semiconductor Manufacturing Co. (TSMC). Government stimulus programs like the U.S. CHIPS Act that are aimed at building secure regional supply chains are adding to the problem, according to executives and analysts interviewed by EE Times.

Compensation for fab workers has soared, but that’s not helping to increase the supply of qualified workers. As an aging generation of semiconductor engineers prepares to retire, chipmakers are having difficulty finding younger people to replace them.

In the U.S., where the CHIPS Act has spurred more than $200 billion worth of new fab investments in states like Texas and Arizona, positions for more than 100,000 skilled workers remain unfilled, according to global management consultancy McKinsey.

“The shortage of talent across many levels is a problem,” Ondrej Burkacky, co-lead of the McKinsey semiconductors practice, told EE Times. “It starts with construction, and it continues in aggregate.”

TSMC said it would transfer an undisclosed number of people from Taiwan to its new facility near Phoenix, Ariz., to accelerate construction. “We require skilled expertise for specific TSMC Arizona construction activities and are temporarily bringing to Arizona select specialized talent with strong experience,” Nina Kao, a TSMC spokesperson, told EE Times earlier this month.

That construction snag has forced the company to delay the expected start of production in Arizona by as much as a year, to sometime in 2025, the company said this week.

Large-scale fab construction hasn’t occurred in the U.S. for longer than 20 years, and few builders within the country have the experience, capabilities and expertise required to deliver such specialized projects, according to a McKinsey report published this year.

Construction crunch coming

In the meantime, construction is surging. Companies in semiconductors, defense, aerospace, batteries, advanced electronics and automotive are expected to invest about $400 billion in U.S. construction projects, McKinsey said. As much as $260 billion will fund new and expanded chip fabs while the rest will go to factories for batteries, data centers, renewable-energy plants and other critical infrastructure, the report said. The HR shortages extend from construction workers to engineers who run fabs and design chips, according to McKinsey.

By 2030, the rapidly expanding U.S. semiconductor industry will need an estimated 250,000 new workers, including 50,000 engineers and 200,000 technicians, to handle fab operations and equipment maintenance, U.S. chipmaker SkyWater said in prepared remarks in early July.

The U.S. has made national security a priority of the CHIPS Act. Vulnerabilities in the U.S. electronics supply chain range from semiconductors to key materials like rare earths.

Pay ‘blown up’

The introduction of the $52 billion CHIPS Act stimulus package in the U.S. last year and the expectation that demand for personnel will surge during the next five years is fueling a spike in compensation packages, according to Lauren Hart. As a headhunter with MRL Consulting, she’s been placing engineers in the Austin, Tex., area where Samsung, Infineon and NXP run chip fabs.

“In the past two years, we’ve seen a massive increase in these salary packages,” Hart told EE Times.

Pay for an engineer with four years’ experience who was making about $100,000 a few years ago has “blown up,” she said. “I’ve spoken to people with three years’ experience, and they’re looking for $150,000.”

The talent gap is likely to widen soon, she added.

“You’ve got all these incredibly skilled engineers, but they’re going to be retiring soon. You’ve got a whole generation of people who are getting ready to retire, and there’s no one to step into their shoes and fill that gap. You can’t find that sweet spot of engineers with seven to 15 years of experience because they’re just not there.”

Education gap

Last year, Purdue University started what it called the first “comprehensive” degree program in the U.S. in semiconductor engineering to help rebuild the domestic chip industry. The Rochester Institute of Technology in New York is one of a few U.S. academic institutions that’s also offered a semiconductor program.

The supply is falling short.

“We’re graduating engineers at various rates in the U.S.,” iDEAL Semiconductor Chairman Mike Burns told EE Times. “I’ve seen numbers range from 20,000 to 30,000 electrical engineers a year coming out. You have to look at where they go. A lot of fellow electrical engineers who came out [recently] went to Wall Street or consulting.”

Burns estimates that up to 15% of the job openings at iDEAL may remain empty this year.

In addition to Wall Street investment banks, companies like Google and Amazon are often more attractive to electronic engineers because of better pay and greater prestige, sources told EE Times.

Into the breach

While companies like TSMC and Samsung count on electronic engineers with master’s degrees and Ph. D.’s to run their fabs in Asia, chipmakers in the U.S. will likely need to rely on military veterans to fill the breach.

Hart said she works with military veterans who have skills that are transferrable to the semiconductor industry.

Many veterans “worked on nuclear technology,” she said. “A lot of the individuals were doing maintenance of certain electrical equipment. We’re trying to do more as a company to focus on supporting ex-military veterans coming into the industry.”

Burns agreed that military veterans are underutilized but gaining recognition.

“If you look at a typical enlisted member of the Navy, or the Air Force, a lot of them became expert systems operators,” he said. “They understand reliability, and they would all make great fab operations staff.”

Other parts of the world, such as Germany, face similar shortages of semiconductor workers as the E.U. ramps up its version of the CHIPS Act.

Germany will lose about a third of its chip workforce to retirement in the next decade, according to a report from the German Economic Institute. The nation, which is home to fabs run by Infineon and GlobalFoundries, had a shortage of more than 60,000 chip workers between June 2021 to June 2022, according to the report.

Government incentives for the industry will lack impact without sufficient personnel to run the new fabs under construction in the U.S., industry insiders said.

“What is the return on investment from the CHIPS Act?” Burns asked. “It can be far lower if we’re not able to fill these jobs.”

By: DocMemory
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