06 Jun 2024 -

The CHIPS Act’s $39 billion challenge: building Fabs is easy, finding talent is not

global electronics

The CHIPS and Science Act, a cornerstone of the Biden administration’s industrial policy, aims to revitalise the American semiconductor industry by injecting $39 billion in federal subsidies to bolster domestic chip manufacturing. This ambitious initiative has attracted over $300 billion in private investment, with projections indicating a potential tripling of US fab capacity by 2032. However, the industry’s resurgence is facing a significant hurdle: a critical shortage of skilled workers.

According to McKinsey & Company, the construction and operation of new and upgraded Fabs will necessitate an additional 48,000 technicians and engineers by 2030. However, current workforce projections indicate a shortfall of 4,500 skilled professionals. This alarming trend is echoed by the Semiconductor Industry Association (SIA) and Oxford Economics, which predict an even wider gap of 67,000 unfilled technical and engineering roles within the US semiconductor sector by the end of the decade.

“The industry is facing a significant workforce challenge,” said John Neuffer, President and CEO of SIA. “We need to attract and train tens of thousands of new workers to meet the growing demand for chips and ensure U.S. leadership in this critical technology.”

The workforce shortage extends beyond mere numbers, encompassing a need for specialised skills in construction, cleanroom protocols, and industry-specific safety standards. Taylor Roundtree, an associate partner at McKinsey, emphasises the diverse skill sets required, stating, “Each of those come from very distinct labour pools. All of them are feeling shortages, but the extent of the shortages are very different, and the causes of those shortages are very different.”

This talent crunch is not unique to the United States. A global shortage of semiconductor professionals is looming, with Taiwan and South Korea also grappling with a lack of engineering graduates. The competition for skilled workers is fierce, with other industries like biotech and aerospace vying for the same talent pool.

While the CHIPS Act has allocated funds for workforce development programs, including scholarships, apprenticeships, and retraining initiatives, the scale of the challenge necessitates a more comprehensive approach. Companies like Intel, which aims to produce at least 50% of the world’s advanced semiconductors in the West by 2030, are actively seeking solutions.

“The workforce challenge is a critical issue for our industry,” said Intel CEO Pat Gelsinger. “We need to invest in education and training programs to ensure we have the talent we need to build and operate these new fabs.”

The Biden administration’s recent announcement of a preliminary agreement with TSMC to expand its investment in Arizona, adding a second fab to produce advanced chips, further highlights the urgency of addressing the workforce shortage. This expansion is expected to create an additional 10,000 high-paying jobs, including 4,500 direct TSMC jobs. However, without a concerted effort to attract and retain skilled talent, these ambitions may remain unfulfilled.

The future of the US semiconductor industry hinges on its ability to overcome this workforce crisis. Addressing the talent shortage will require a multi-faceted approach, involving collaboration between industry, government, and educational institutions. Only then can the US realise its vision of a thriving domestic semiconductor sector and secure its position in the global technology landscape.

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