According to a new report by McKinsey & Company, United States investment in the semiconductor industry is expected to increase to more than $250 billion by 2032, which will create more than 160,000 new engineering and technical support jobs for the industry. However, the labor force in United States' domestic semiconductor manufacturing has fallen by 43 percent since 2000, suggesting that filling these positions will be a daunting task because it takes time to train and develop skilled workers.
According to the report, if the current rate continues, the shortage of engineers and technicians could reach 146,000 by 2029. McKinsey stressed that the semiconductor industry needs to undergo major changes to support domestic production and reduce dependence on foreign products, while effectively competing with manufacturers in Taiwan and Korea, which still hold the majority of the market share. The United States is also trying to prevent rival countries from acquiring advanced chips in order to maintain technological superiority.
Labor shortages are particularly critical to the evolution of AI, as the rapid development of AI requires higher computing power, and innovation in semiconductor technology is the key to meeting this demand. Beatriz Valle, a senior analyst at GlobalData, noted that the lack of skilled workers will affect wafer production, as skilled workers are essential for the complex processes of chip manufacturing. Delays in production schedules could lead to supply chain disruptions and chip shortages.
Figure: The United States chip industry may face labor shortages
In fact, GlobalData's research shows that there is already a shortage of semiconductors capable of running generative AI models in hyperscale computing scenarios, forcing cloud service providers like Amazon and Google to build their own technology to meet the growing demand for processors. Valle warned that AI could face similar challenges, with a shortage of microprocessors likely to slow the development and deployment of new AI technologies, delaying innovation.
Workforce challenges are not limited to skilled workers and extend to the construction of chip manufacturing facilities. Gaurav Gupta, a VP analyst at Gartner, believes that despite the warnings of the McKinsey report, the labor shortage problem is not as serious as some experts predicted. He noted that finding construction workers to build new manufacturing facilities could be a bigger challenge, which could delay plans to expand domestic chip production and increase costs.
To address this challenge, the United States has begun to take steps to help the labor market grow rapidly to fill the gap for skilled workers in semiconductors. TSMC, for example, is ramping up chip production in Arizona, but due to a lack of skilled workers, the company has delayed the start of production of its factories and sent experienced technicians from Taiwan to train United States workers. However, Valle stressed that solving this problem requires long-term investment in education, and this is not a problem that can be improvised to solve.
The Biden administration signed the CHIPS Act in 2022 to boost semiconductor manufacturing in the United States. One of the key measures of the bill is the creation of a coalition of workforce partners focused on closing the skills gap for researchers, engineers, and technicians in semiconductor design, manufacturing, and production to avoid a semiconductor workforce crisis.
