08 Jul 2024 -

US Government Invests in Semiconductor Workforce to Combat Looming Talent Crisis, But Challenges Remain

In an ambitious effort to address a critical labour shortage that threatens to undermine domestic chip production, the Biden administration has launched a new workforce development programme funded by the 2022 CHIPS and Science Act. This initiative aims to train and develop a skilled workforce capable of supporting the burgeoning US semiconductor industry, which is set to receive a massive influx of investment thanks to the act’s incentives.

New Programme to Boost Workforce

The programme, described as a workforce partner alliance, will use some of the US$5 billion in federal funding set aside for a new National Semiconductor Technology Centre (NSTC). The NSTC plans to award grants of up to US$2 million to as many as 10 workforce development projects across the country. These projects will focus on training technicians and other skilled workers essential to the semiconductor industry, particularly those in roles that do not require a bachelor’s degree, which account for roughly 60% of new semiconductor positions, according to McKinsey.

The NSTC will launch additional application processes in the coming months, and officials will determine the total level of spending once all the proposals have been considered. This initiative represents the CHIPS Act’s first workforce-focused funding opportunity, underlining the government’s recognition of the critical role that a skilled workforce plays in realising the goals of the legislation.

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Looming Talent Shortage

This move comes as industry experts warn of a looming talent shortage in the sector. The Semiconductor Industry Association (SIA) predicts a shortfall of 67,000 workers by 2030, a figure that could have a significant impact on the projected 115,000 new jobs the industry is expected to add by then. Some estimates are even more pessimistic, suggesting the gap could be as high as 90,000 technicians by 2030, according to Bloomberg. With the US aiming to produce 20% of the world’s most advanced chips by then, this shortage could severely hamper the country’s semiconductor ambitions.

GlobalFoundries, the third-largest chipmaker globally, is already feeling the pressure. The company is actively seeking to fill hundreds of roles worldwide and hires thousands annually, a pace it expects to continue. “Keeping the same size workforce is not an option for the industry as demand soars,” said Pradheepa Raman, GlobalFoundries’ Chief People Officer.

Education and Upskilling Are Key

“It is imperative that we develop a domestic semiconductor workforce ecosystem that can support the industry’s anticipated growth,” said Michael Barnes, senior manager of workforce development programmes at Natcast, the non-profit operating the NSTC.

The CHIPS Act has already spurred a flurry of activity in the educational sector, with over 50 community colleges announcing new or expanded semiconductor-related programmes. Major chipmakers like Intel, TSMC, Samsung, and Micron have each allocated $40 million to $50 million specifically for workforce development as part of their CHIPS Act awards.

GlobalFoundries, for example, has launched the sector’s first registered apprenticeship program, which is full time and paid with benefits, with training at no cost to the apprentice. It is completed in two years or less, and requires only a high school diploma or equivalent and interest in the mechanical field.

Scale of the Challenge

Despite these efforts, the scale of the challenge remains daunting. Deloitte estimates that the global semiconductor industry will need over one million additional skilled workers by 2030, representing a significant annual recruitment need. This demand extends beyond the US, affecting key players worldwide and threatening to impede the sector’s growth and innovation.

In the US, the challenge is compounded by the fact that fewer than 100,000 graduate students enrol in electrical engineering and computer science each year. Even with substantial investments in education and training, the sector will likely struggle to find enough skilled workers to meet its needs.

Looking Ahead

While the government’s new programme and industry initiatives are steps in the right direction, it is clear that a sustained and multifaceted effort will be needed to bridge the talent gap. This includes not only investing in education and training but also addressing the broader issues affecting the industry’s attractiveness to potential employees, such as career advancement opportunities and workplace flexibility. The future of the US semiconductor industry may well depend on the success of these efforts.

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