The Semiconductor Talent Gap: How Companies Can Bridge the Divide

Introduction: The High-Stakes Race for Semiconductor Talent

The semiconductor industry is experiencing unprecedented growth, fueled by the increasing importance of chips in innovation and technology. With nearly $1 trillion in investments expected between 2023 and 2030, companies worldwide are building new factories to meet the rising demand. However, manufacturing capacity is only one piece of the puzzle. Talent is emerging as a critical bottleneck. Semiconductor companies must attract, develop, and retain a skilled workforce to operate these new facilities at full capacity. The convergence of an aging workforce, a limited number of graduates, and a less-than-stellar industry perception creates a significant talent shortfall. This article explores the challenges and provides actionable strategies for semiconductor companies to overcome the talent gap.

Sizing the Talent Challenge in Semiconductors

The demand for qualified candidates in the semiconductor industry has surged, with job postings for technical roles in the EU and US growing at a CAGR of over 75% from 2018 to 2022. Without significant improvements in talent attraction, the projected talent gap for engineers will be massive, exceeding 100,000 in both the US and Europe and potentially surpassing 200,000 in the Asia-Pacific region (excluding China). While some countries, like India, may be net exporters of engineering talent, others, such as Japan and South Korea, face severe shortages. This talent challenge extends across the entire semiconductor value chain, affecting equipment designers, manufacturers, and component suppliers.

Key Drivers of Increased Demand

• New Construction Siting: Building new fabs in regions far from existing talent pools requires rapid onboarding of various roles, including manufacturing, facilities, quality, and industrial engineering. This creates a daunting task for companies, as they need to develop their own semiconductor ecosystems to attract and retain talent.
• Shifting Skill Requirements: Advances in materials, packaging, and embedded software have changed the talent profile for semiconductor companies. AI and machine learning skills are becoming increasingly critical, surpassing systems architecture in importance. Knowledge of applications and new materials is also more relevant.
• Persistent Attraction and Attrition Issues: Demographic trends, subpar branding, and employee attrition further exacerbate the talent shortage. An aging workforce, weak brand image, and lack of employee satisfaction contribute to the industry's challenges in attracting and retaining top talent.

The Impact of an Aging Workforce

One-third of semiconductor employees in the United States are aged 55 or older, while the European Union also has a significant proportion of its workforce nearing retirement. The shortage of STEM graduates to replace these retirees could result in a substantial labor gap.

The Branding Problem

The semiconductor industry struggles with its brand image compared to other high-profile tech companies. Surveys indicate a lack of enthusiasm for semiconductor brands among both employers and college students, who often perceive consumer-oriented tech companies as offering more exciting jobs, higher compensation, and better development prospects.

The Attrition Rate

An increasing number of employees in advanced electronics and semiconductors are likely to leave their jobs, primarily due to a lack of career development, advancement opportunities, and workplace flexibility. Many of these employees leave the industry altogether, further compounding the talent shortage.

Key Actions to Attract and Retain Semiconductor Talent

Tackle Reasons for Current Attrition

Prioritize fundamental workplace expectations to meet employee needs and reduce attrition.

• Reinforce Nontraditional Career Trajectories: Create expert paths for individual contributors to advance without becoming managers.
• Empower Middle Management: Provide middle managers with the resources and authority to effectively manage their teams.
• Improve Workplace Flexibility: Embrace hybrid work models that balance remote work with the need for collaboration and company culture.

Identify and Access Untapped Talent Pools

Expand the talent pool by targeting often-overlooked groups:

• Women: Attract and retain women by focusing on work-life balance, flexibility, and inclusivity.
• Retirees: Create pathways for experienced retirees to re-enter the workforce in specialized roles.
• Skills-Based Hiring: Focus on skills rather than credentials to broaden the pool of qualified candidates.
• Generative AI: Utilize generative AI to identify skills in unstructured data and find candidates from adjacent industries.

Enhance Storytelling Related to Semiconductors

Improve the industry's perception through branding and highlighting the impact of semiconductors on the world:

• Upskilling and Continuous Learning: Make continuous learning a part of the company culture.
• Rebrand the Industry: Shift the focus from "semiconductors" to "micro- and nanoelectronics" to improve perception.
• Connect with Universities: Facilitate contacts between universities, semiconductor companies, and research centers.
• Highlight Meaningful Work: Connect individual roles to the significant impact the company and semiconductors have on the world.

Reimagine Workforce Productivity

Enhance productivity through tailored learning journeys and AI-driven tools:

• Tailored Learning Journeys: Focus on experiences and apprenticeships rather than generic courses.
• Tech-Enabled Onboarding: Use technology to enhance knowledge management and skill development.
• Generative AI for Productivity: Expedite repetitive tasks, automate code documentation, and simplify platform usability.

Draw on Outsourced Labor to Manage Shortages

Utilize outsourced labor for roles that are not needed on a long-term basis, such as construction, equipment installation, and specialized maintenance.

Conclusion: The Imperative of People Strategies

The semiconductor industry faces a critical talent shortfall that requires immediate and strategic action. By tackling attrition, tapping into new talent pools, enhancing the industry's image, and reimagining workforce productivity, semiconductor companies can bridge the talent gap and ensure their continued success. Organizations must prioritize their people strategies as seriously as their business strategies to thrive in this high-stakes environment. The growth of the semiconductor market and new fab builds will continue to boost the demand for talent, and those who adapt and innovate their talent strategies will be the winners in this evolving industry.