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The US semiconductor industry is said to be struggling to hire as well as retain staff as the country cranks up its chipmaking capacity to reduce its reliance on foreign supplies.
Labor is proving to be a challenge for revitalizing the nation’s semiconductor landscape, the consultants at McKinsey say in their latest report on the sector. Chipmaking companies are struggling not only to fill jobs, but to keep their current employees from leaving, with over a third of staff surveyed seriously thinking about ejecting from their current employer, we’re told.
The expansion of the semiconductor industry in the US, fueled by $52 billion in government subsidies from the CHIPS Act, naturally means more workers are needed for building and operating chip fabrication and packaging plants. Earlier this week a study from the Semiconductor Industry Association predicted that 28 percent of all advanced chips might be made in America by 2032, up from what is essentially nil, something that will only be possible with thousands more workers.
It’s getting increasingly hard to fill open positions, which grew from 7,900 in 2020 to 24,700 in 2022. Job postings are staying open for longer than normal, too; in 2022, the average time spent open for engineering jobs was 26 days, and for technician jobs it was 28 days.
High average lifespans for job openings weren’t unknown before the CHIPS Act, as they’ve been averaging 20 days or more almost every year since 2014. Considering there have been far more job openings from 2021 onward than ever before, the average time open for a position doesn’t seem too bad.
The bigger issue may be the increasing number of semiconductor employees that are thinking about quitting. McKinsey found in a March 2023 survey that 53 percent of employees were at least a little likely to quit their jobs, while in 2021 only 40 percent thought about resigning.
The breakdown of these employees doesn’t look great either; 16 percent are only somewhat likely to leave their jobs, and the remaining 37 percent are roughly divided evenly between likely, very likely, and almost certainly.
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Lack of career advancement, lack of workplace flexibility, and lack of support being three of the most common motivations for moving on. Plenty also complained about not being paid enough, being worked too hard, or even their workplaces being unsafe. There have certainly been in-depth reports of, for instance, TSMC’s USA plants working people hard, with staff running into cultural and professional barriers.
Even if firms can hire staff to replace quitting employees there’s no guarantee there won’t be a hit to the quality of work, as veteran employees take their years of experience with them, the report warns.
Even with programs running on CHIPS Act cash, filling the gaps will be hard
The McKinsey authors point out that investment in a variety of development programs can help get fresh talent into the industry. The CHIPS Act already sets aside money for this purpose, focusing especially on technician roles and jobs that don’t require a bachelor’s degree, which represent 60 percent of new semiconductor positions.
The report suggests education-centric solutions, such as setting up certification programs at community colleges and trade schools and creating partnerships with educational institutions. Reaching out to middle and high school students is also cited as a good tactic, with Samsung Austin Semiconductor noted for arranging summer internships for 24 high school students.
None of this is particularly new from McKinsey though, as the White House’s National Strategy on Microelectronics Research brings up many of these points, which are already being tackled in some cases.
But even with all of those investments, the report predicts there will still be a labor shortage in the long term. “The semiconductor industry clearly has pressing talent issues to address to fully realize the aims of historic investment and massive capital expenditures,” it states. “A much broader range of collaborative initiatives will need to be deployed.”
One potential solution might be to hire workers from abroad, which is what TSMC tried with its Arizona fab when the domestic workforce ran dry. However, the use of Taiwanese workers greatly irritated American employees, forcing TSMC to back down and only use foreign talent if they had necessary and special experience.
There doesn’t seem to be a single good solution for tackling the America’s semiconductor labor shortage, and that may well jeopardize the nation’s chipmaking ambitions, McKinsey concludes. ®
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