Recently, the topic of semiconductor talent has once again attracted attention in the industry, especially in the Asian region. Japan, South Korea, and Southeast Asian countries like Vietnam and India are actively developing or revitalizing their local semiconductor industries. The demand for talent seems to have surpassed that of the United States, Europe, and China.
China’s neighbors, South Korea, and Japan are vigorously developing their semiconductor manufacturing industries, facing a significant talent gap. Particularly in South Korea, the local talent is experiencing an internal and external “split.” On one hand, various regions around the globe are developing their chip manufacturing industries, and South Korea, having an advantage in this area, has become a target for many countries looking to poach talent. On the other hand, many young Koreans are shifting towards industries represented by medicine, resulting in a somewhat insufficient reserve of talent for the semiconductor industry, posing a hidden risk for the sector’s development.
01
South Korea’s Semiconductor Talent Drain: Navigating the Brain Drain Crisis
According to the South Korean Ministry of Education’s 2022 report on the semiconductor industry labor market, by 2031, the country’s semiconductor industry will face a labor shortage of 56,000 people. In 2022, the number was 1,784, indicating a 30-fold increase in the gap over 10 years.
In September 2023, Kyung Kye-hyun, head of the Samsung Electronics Device Solutions Division, spoke about the manpower issue in the chip industry during a lecture at Seoul National University (SNU), saying, “People are the most important resource for a company to sustain its business growth.” Of the 28 natural science and engineering master’s programs at SNU, 16 didn’t have enough students to meet their maximum quotas.
“The large number of students choosing to go into the medical sector is one of the many reasons for the shortage of semiconductor labor,” said a semiconductor industry insider. “It’s quite strange that there is little interest in the semiconductor industry, which has a huge impact on the national economy, compared to our society’s interest in medical schools.“
The South Korean government is expected to announce in February this year an increase of 2,000 students in the total admission quota for medical schools. Semiconductor companies that contracted with engineering schools before and after 2010 may see a decline in applicants after the increase in medical school admissions. Because they are less popular than medical, dental, Korean traditional medicine, pharmaceutical, and veterinary research departments, semiconductor courses have to offer more scholarships and guarantee employment after graduation.
According to an analysis by the university admissions consulting center Jinhak, most students have been weighing their options between medical school, computer science, or electronic engineering departments at other schools. If the quota for medical school admissions increases, semiconductor-related departments might see their candidates also being admitted to medical schools outside Seoul.
Kim, an 18-year-old student at a school in Seoul, considered joining a semiconductor course but eventually applied to it and was admitted to the Electrical Engineering School of Korea University. “Although I was interested in the employment guarantee from Samsung Electronics or SK Hynix, I hesitated because the program was designed to meet industrial manpower needs,” he said. This shows that young people are not very interested in working at wafer fabs, and some are even averse to it.
In South Korea, many foreign companies are competing with local semiconductor firms like Samsung and SK Hynix for talent.
Lam Research, an American semiconductor equipment company, held the “Lam Research Tech Academy” for juniors and seniors in Korea in June 2023. The course was conducted practically, with students learning about semiconductor processes and equipment principles through hands-on experience. The company launched this program to attract talent and has been increasing its recruitment efforts since opening a research center in Yongin, Gyeonggi Province, in April 2022.
Lam Research’s direct involvement in talent cultivation is due to the increasingly fierce competition for talent among global semiconductor companies entering South Korea in recent years. As global semiconductor equipment enterprises increase their investments in South Korea, the demand for labor outstrips supply. Major companies like Applied Materials, ASML, Lam Research, and Tokyo Electron (TEL) are establishing or expanding research centers in South Korea. ASML plans to double the size of its Korean subsidiary in 10 years, which currently has about 2,000 employees.
With a shortage of skilled semiconductor talent, these companies must compete with large South Korean firms like Samsung Electronics and SK Hynix.
02
Vietnam and India: Rising Powerhouses in the Global Arena, Refusing to be Outshone
Vietnam and India, regions lagging in chip manufacturing, have recently encountered developmental opportunities, bringing their industry talent issues to the forefront. Both countries are adopting various measures to address these challenges.
An increasing number of international manufacturers are setting up chip packaging and testing factories and design centers in Vietnam, leading to a growing gap in semiconductor-related talent, especially in highly skilled workers with advanced technology. According to the Vietnam Semiconductor Industry Association, the country has only about 5,000 semiconductor engineers, far from meeting market demands.
Vietnam’s relevant departments have introduced policies to encourage local and international enterprises to invest in laboratories, research institutes, and innovation centers at universities, aiming to form research teams capable of mastering and utilizing core semiconductor technologies. The government is also encouraging domestically technologically advanced enterprises like Viettel, FPT, CMC, and Phenikaa, as well as universities and research institutes, to jointly develop semiconductor products. They aspire to create an ecosystem covering all production stages from design to manufacturing.
At its current stage of development, Vietnam is focusing more on chip design, as it accounts for 50-60% of the country’s semiconductor value, and it is still challenging to build large-scale semiconductor manufacturing fabs in the short term.
In India, semiconductor companies like Intel, Samsung, Applied Materials, and Lam Research have set up factories or research labs, hoping India can meet their labor needs. Recently, AMD announced that it would establish its largest R&D base in Asia in Bangalore, requiring more semiconductor talent.
Meanwhile, chip packaging and testing companies are also actively recruiting talent in India.
Despite India producing 1.5 million new engineers each year, only one-sixth of the graduating engineering students are employable, with the majority still unemployable by semiconductor companies. The relevant job positions in companies can only fill about 50% of the vacancies annually. Therefore, India must improve the quality of education in engineering and technical colleges, ensuring that most engineering graduates are employable with the right skills, which is key to meeting the semiconductor talent demand.
In 2023, the All India Council for Technical Education (AICTE) launched two new courses – Integrated Circuit (IC) Manufacturing, and VLSI Design and Technology. Additionally, the Indian Institute of Science (IISc) in collaboration with TalentSprint announced an advanced certification program at the postgraduate level for neuromorphic and quantum technologies in micro-nanoelectronics, providing industry-oriented training to enhance the capabilities of semiconductor professionals.
03
Could the USA Become a ‘Black Hole’ for Global Talent? Emerging Trends to Watch
In 2023, the Semiconductor Industry Association (SIA) of the United States published a report specifically analyzing the shortage of semiconductor talent. By 2030, the domestic semiconductor workforce in the U.S. is expected to increase by about 115,000, from around 345,000 related job positions in 2022 to 460,000 by the end of 2023, a 33% growth. According to the current completion rate of talent cultivation in colleges, it is estimated that about 67,000 of these new job positions, accounting for 58% of the expected new jobs, could face the risk of being unfilled. Among the shortages, 39% are expected to be technical workers, 35% engineers with four-year degrees, and 26% engineers with master’s or doctoral degrees.
To address the talent crisis, SIA proposed three recommendations:
- 1) Strengthen support for regional partnerships and programs aimed at expanding the pipeline of skilled technicians in semiconductor manufacturing and other advanced manufacturing fields. This involves diversifying training institutions and could include high school graduates and veterans in talent development tiers;
- 2) Enhance the cultivation of domestic STEM talent, especially at the master’s and doctoral levels. If the U.S. wants to meet the semiconductor industry’s demand for technical talent by 2030, action must be taken promptly and proactively;
- 3) Adjust related policies to retain and attract more international students with advanced degrees, which means relaxing immigration policies.
A typical case of the shortage of semiconductor talent in the U.S., especially in chip manufacturing, is TSMC’s 4nm process wafer fab under construction in Arizona. At the end of 2023, TSMC indicated that due to a severe shortage of technical workers, which is difficult to resolve domestically in the short term, the production start of this fab, originally scheduled for 2024, has been postponed to 2026.
TSMC’s Arizona wafer fab is expected to employ 4,500 staff by 2026. Not just TSMC, but an increasing number of semiconductor manufacturers are building fabs in Arizona and other states, highlighting the growing issue of talent shortages.
To address this talent gap, collaboration is required between U.S. semiconductor companies, colleges and universities, and the government to develop and implement a series of plans promptly.
Arizona has already started taking action. For example, in 2022, with government support, Maricopa County Community Colleges developed a program, uniting 10 campuses into a college system, launching a Semiconductor Technician Rapid Entry Program aimed at exposing students to semiconductor manufacturing in just 10 days. Students who pass the certification exam can have their tuition refunded, meaning that qualified graduates effectively study for free. In its first year, ending in June 2023, the program enrolled 684 students, 589 of whom earned certificates. The report states that employees from Phoenix-area wafer fabs provided some guidance to students, helping them establish work connections with companies and better understand employment opportunities in the industry.
Similar collaborative programs to the one mentioned above are numerous and increasing in the U.S. However, the SIA and Oxford Economics predict that it will take decades to alleviate the shortage of semiconductor talent in the U.S. by increasing the number of domestic students pursuing advanced degrees in STEM fields. Therefore, solving the shortage of domestic semiconductor talent in the U.S. is not an easy task.
04
Semiconductor Talent Flocks to Germany: Europe’s New Tech Hub?
In Europe, one-third of all chips are produced in Dresden, Saxony, Germany. In recent years, the state has attracted billions of dollars in investment, with new fab projects from companies like Infineon, Bosch, GlobalFoundries, TSMC, and Intel located there.
Over 76,000 people are employed in Saxony’s chip industry, and this number is expected to rise to 100,000 by 2030. By that year, the European Union aims to produce 20% of the world’s chips (up from the current 10%), and a shortage of talent could be an obstacle to achieving this goal, as the demand for engineers and technical workers in fabs exceeds the output of the region’s educational and training systems.
According to IW Koeln, in Germany’s chip industry, about 28% of electrical engineers and 33% of engineering managers will reach retirement age within the next 10-12 years. A spokesperson for the German Ministry of Labor stated that from June 2021 to June 2022, the country’s chip industry was short of 62,000 employees. As the population ages and fewer Germans enter the labor market, the country’s chip talent crisis is becoming apparent.
With a shortage of local talent, the focus has shifted to recruiting from abroad. Infineon’s fourth fab in Dresden has employees from over 50 countries, and GlobalFoundries’ Dresden factory has staff from more than 40 countries. Last year, many of the 65 students in the chip manufacturing course at the Dresden University of Technology came from China and Iran, with Indians making up the largest group at 57% of the class.
Another challenge, besides attracting technical workers to Germany, is convincing them to stay. The country launched a program linking skilled professionals from India with jobs in Saxony, and industry groups help them adapt to life in the region. Dresden is not as international as some of Germany’s larger cities, but since 2014, the proportion of foreigners in the capital of Saxony has more than doubled.
In October 2023, the German government announced a strategy to “squeeze out” more labor for the chip industry through increased educational investment, enhanced skills training, improved labor participation, and better work culture. The country is also reforming its immigration laws to make it easier for foreign technical workers to come to Germany.
In April 2023, European negotiators agreed on the final version of the “European Chips Act,” committing €43 billion to support the EU’s semiconductor industry. In addition to allocating subsidies for research and new fabs, the EU also funded projects like the European Chips Skills 2030 Academy, to train 500,000 microelectronics experts and engineers over the next decade.
05
Diverse Talent Demand in China’s Semiconductor Industry: Who’s Needed Most?
In 2020, there were approximately 541,000 semiconductor industry workers in mainland China, with the demand projected to reach 766,500 by 2023. Even if 30,000 graduates from semiconductor-related majors enter the industry each year, the talent gap would still exceed 100,000.
The shortage of semiconductor talent in mainland China is comprehensive, spanning from the upstream sectors of semiconductor materials, equipment, EDA tools, and IP, to the midstream and downstream areas of chip design and manufacturing, with the greatest demand in chip design and manufacturing.
In chip design, the most acute shortage is in R&D engineers, followed by R&D managers and R&D directors. The most urgently needed R&D engineers include analog design engineers, RF design engineers, CPU architects, and signal integrity engineers. In terms of chip manufacturing, the most significant shortages are in process supervisors and production supervisors, followed by production directors, production managers, process directors, and process managers. Compared to other roles in the supply chain, positions in chip manufacturing place a higher emphasis on experience, with the aforementioned critical positions requiring an average of at least six years of work experience.
The Chinese government has implemented various policies to address this issue, particularly by elevating integrated circuit majors to a primary discipline in several universities, aiming to cultivate more industry talent.
06
Taiwan’s Semiconductor Talent Boom Cools Down: What’s Next for the Industry?
The 2023 “Semiconductor Talent White Paper” published by Taiwan’s 104 Job Bank reveals that the semiconductor industry experienced explosive growth beginning in 2021. However, signs of a decline in talent demand emerged in the third quarter of 2022. In 2023, amid a continued slump in the global chip market and negative factors like excessive inventory levels in the supply chain, the demand for semiconductor industry talent continued to decline. In the second quarter of 2023, the average monthly demand for semiconductor industry personnel fell to 23,000, a year-on-year decrease of 37.5%, the lowest since the second quarter of 2020 (19,000).
Despite the cooling demand for talent, the supply-demand ratio in the semiconductor industry in the second quarter of 2023 was 2.3, still higher than the overall market average of 1.8 during the same period, indicating that the semiconductor talent gap remains higher than the overall job market.
In terms of salaries, in Taiwan, the average monthly salary in the semiconductor industry in 2023 was 56,256 New Taiwan Dollars. From 2010 to 2023, there was a 35% increase over nearly 14 years, the highest growth among the top five high-paying industries in Taiwan.
To address the talent cultivation issue, the Taiwan has implemented measures like industry-academia cooperation and enacted talent cultivation regulations, allowing universities to establish semiconductor institutes with province government and private funding. In 2021, four universities – Taiwan University, Tsing Hua University, Chiao Tung University, and Cheng Kung University – established semiconductor institutes. The province government contributed 9.6 billion New Taiwan Dollars, with private contributions amounting to 19.2 billion. In 2022, Sun Yat-sen University and Taipei University of Technology joined, and official information indicates that these six universities can collectively train over 700 semiconductor talents annually.
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