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Chip Experts See Talent Shortage as Main Growth Hurdle

— Part of this EE Times series: A Vulnerable U.S. Electronics Supply Chain . Other articles in the series include: Experts: U.S. Military Chip Supply Is Dangerously Low , Reshoring Chip Industry Risks Failure With Just More Fabs , U.S. Crawls Toward Rebuilding Frail PCB Industry , USA Rare Earth Aims to Break China’s Grip, GF, Lockheed Martin Pair Up to Improve National Security, 3 Governments Investing in New Fabs Pledge Cooperation and PCB Association Presses Washington for Lifeline . 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. Partner Content View All By Michael White, David Abercrombie, and John Ferguson 07.18.2023 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. From left: Lauren Hart, Saiqa Farhat, Lenore McLaughlin and Michelle Mapp-Cooper gather at MRL Consulting Group’s Women in Semiconductors event in Austin 2023 event. (Source: MRL) “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 […]

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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