Embracing Solutions: An Overview of the Semiconductor Talent Shortage and How Chip Companies Can Overcome It

Part 2: Tracing the Semiconductor Talent Gap

For the last 25 years, the U.S. semiconductor industry concentrated almost exclusively on chip design.

Naturally, America’s semiconductor talent pipeline followed suit; why study for a career in chip manufacturing when the best money and opportunities were in design?

U.S. chip manufacturing gradually dwindled.

“The U.S. has focused on one segment of the industry at the expense of others,” Miller says, who is a professor of International History at Tufts University. “And I think that has been a challenge that the U.S. faces."

America went from making 37% of the world's semiconductors in the 1990s to 12% by 2019.

Furthermore, none of the world’s most advanced chips are made in the U.S. even though many are designed here.

Perhaps the biggest loss, however, has been the loss of institutional semiconductor manufacturing knowledge; the kind of foundational knowledge gained by working and evolving in an industry or sector every day, over a long period of time.

“Thirty years ago, anyone involved in chip design also understood a fair amount of the manufacturing process because you were generally working at a company that did both the design and the manufacturing, and so you had to have this holistic sense,” Miller said in his interview with Wirjawan. “Today, for most chip designers, you don't need to know anything about chip manufacturing. And indeed, the specialization is such that you end up not knowing much at all.”

Despite shifting away from that holistic approach, U.S. chip companies have continued to own more than 50% of the global semiconductor market since the late 1990s, which is the largest share among all countries by far. South Korea is second with 13.8%.

From that perspective, the ends had seemingly justified the means.

Until the global chip shortage hit.

Part 3: Facing the Semiconductor Talent Gap

The chip shortage laid bare a hard reality: the U.S. — a nation inextricably tied to chip innovation, sales and consumption — was proportionally among the most vulnerable end-users in the semiconductor supply chain.

The vulnerability was such that, in a country divided on many issues, most in the U.S. agreed that America could no longer afford to just design the most advanced chips; it had to start making and packaging them onshore.

Hence the $52.7B CHIPS Act, plus another reportedly four hundred and forty billion-plus dollars in private semiconductor investment.

What’s followed has been announcement after announcement of projects supporting all things chips: R&D, design, microelectronics manufacturing, advanced packaging, metrology, material handling and supply chain, and the list goes on.

The timing of this push coincides with momentous advancements in AI, which will require rapid chip development to satisfy ever-increasing technological and energy demands.

Essentially, there are detailed plans to quickly develop every aspect of U.S. semiconductor production except for one: the talent.

Part 4: Erasing the Semiconductor Talent Gap

To see both a preview and a microcosm of the U.S. semiconductor talent situation, look no further than delayed progress and production at the new TSMC foundries in Arizona.

TSMC ultimately had to bring in its own engineers and technicians from Taiwan to offset a shortage of skilled foundry workers.

Faced with the same challenge, what will other companies do?

Developing the talent pipeline from colleges, universities, technical schools and training programs will obviously be critical. Though, it could take years for curriculums, enrollments and salaries to hit stride with demand.

Looking for talent outside of the U.S. will also continue to be a key strategy. However, until immigration laws are streamlined to efficiently import skilled talent, this avenue may create more challenges than it alleviates.

For arguments sake, let’s say that an abundance of newly graduated mechanical, electrical, material and manufacturing engineering and technical talent hit the labor market overnight; there would still be one more hard reality to bear.

"In the chip industry, the way you develop human capital is by training employees in a fab,” Miller explains further during his interview with Wirjawan. “There's only so much you can learn in a university. You can get your PhD in material science or in physics, but unless you've done the manufacturing yourself, you don't really understand how to do it. You don't have the talent until you build the talent.”

Therein lies the U.S. semiconductor conundrum: companies can’t start making advanced chips without advanced chip-making talent. However, they won’t have advanced chip-making talent until they start making advanced chips. Which comes first?

Short of bringing in or competing for talent from Taiwan and elsewhere, and short of having a fully flowing pipeline of educated and work-trained talent, how can semiconductor companies overcome skilled worker shortages right now?

Part 5: Embracing the Solution, Not the Problem

Fixing the talent shortage is beyond the control of any one company.

“That’s why, at the micro level, it’s so important to focus on solutions that you can control,” Anderson says. “Companies that adopt effective strategies to expand or extend their recruiting, retention and technical capabilities will secure and optimize the best and most of the talent that is out there.”

Such strategies include, but are not limited to:

• Establishing specialized recruiting efforts that scour individual labor markets city-by-city, state-by-state, region by region for qualified candidates
• Offering real time, data-driven salary and benefits packages
• Implementing intensive onboarding, training and upskilling programs
• Having regular, meaningful, transparent conversations about performance, engagement and retention
• Developing partnerships with secondary and higher education institutions to promote and develop talent at local levels
• Collaborating with local, state and federal agencies to ensure funding, laws, services and infrastructure are aligned with strengthening a skilled workforce

Although, this list raises another concern: talent acquisition teams and hiring managers, especially in STEM-heavy industries like semiconductor, are already working at capacity — and feeling it. Do they really have the bandwidth to do more?

“Going it alone,” Anderson says, “it’s getting more difficult for talent acquisition teams and project leaders to source and manage all the highly skilled human capital necessary to keep pace with demand.”

As a result, more companies than ever before are relying on outsourced services and workforce solutions to ease of the burden of adopting critical talent strategies. In anticipation of future needs as semiconductor work matures within their organizations, some companies are proactively hiring to find the talent they need now amidst the tight labor market for the skills they seek.

“Ultimately,” Anderson says, “semiconductor companies are looking for partners that can immediately infuse their organizations with the expertise and capabilities they lack otherwise.”

Having already recruited and retained the hard-to-find talent themselves, firms like Actalent — which already has over 2,500 engineers with semiconductor skill sets on its roster — can provide high-quality outsourced and project-based engineering services to resolve multiple talent-related pain points in one package.

Actalent is also redefining the parameters of strategic recruiting to include sourcing and upskilling qualified talent from non-degreed populations. As Anderson explains, this will be especially critical on the foundry-side of the semiconductor industry.

“A major focus needs to be put on solidifying recruitment streams where non-degreed people can be identified, onboarded and upskilled if necessary to meet demand,” Anderson says. “Actalent recently partnered with a client to pull together diverse teams from traditionally under-represented groups. We upskilled them into a range of technology skill sets so they are ready to deploy across their business. Programs just like this can be replicated across the entire semiconductor market.”