The semiconductor industry has become an increasingly important part of the U.S. and global economies, with experts projecting it will be a trillion-dollar industry within the next 10 years. In 2022 alone, semiconductors will account for more than $600 billion in sales worldwide—roughly a 16 percent increase from 2021.

Semiconductors in short supply

Semiconductors are “the brains of modern electronics,” helping to power everything from cars and planes, to military technologies and medical devices. They are a bedrock of innovation, but unfortunately for many manufacturers and consumers, currently in short supply.

It wasn’t until the COVID-19 pandemic, when news of the “chip shortage” hit the headlines, that many people even became aware of semiconductors’ outsize role.

Demand for electronics soared as people transitioned to remote work and virtual schooling. Consumers rushed to buy new computers, phones, and smart home devices—all of which rely heavily on semiconductors. Chip manufacturers simply couldn’t keep up.

In response, the semiconductor industry has been proposing solutions that will help ensure a more robust and reliable supply of semiconductors. Countries including the U.S. that have historically relied on chip-making facilities overseas, commonly referred to as fabrication plants or “fabs,” are now pushing for investments in domestic production. But a single fab requires thousands of skilled employees–and the semiconductor industry, like so many others, is already facing a labor shortage.

In July of 2022, the U.S. senate voted to pass a $280 billion bill to fund domestic semiconductor chip manufacturing to boost its competitiveness with China by lowering prices, creating jobs, and decreasing its reliance on imported chips. The package includes:

• $52 billion in funding for U.S. companies to produce computer chips as well as a 25 percent tax credit for companies who invest in the market
• $39 billion for chip manufacturing companies to expand and modernize their technologies
• $11 billion for the Commerce Department for research and development.
• $81 billion for the National Science Foundation

The semiconductor industry directly employed an estimated 277,000 workers in the U.S. in 2020, according to the Semiconductor Industry Association (SIA). To meet the critical workforce needs for anticipated fab expansion, the Wall Street Journal reports that the industry will need to add at least 70,000 to 90,000 workers by 2025.

The semiconductor workforce of today

Today, the semiconductor workforce is represented in 49 states and Washington, D.C., with the highest concentrations of workers in California, Oregon, Arizona, Texas, and Idaho. Production and engineering jobs make up more than half of the domestic semiconductor workforce, but the industry also employs workers in management, business and financial operations, mathematics, sales, administrative support, maintenance, transportation, and more.

Workers in the semiconductor industry are primarily between 35- and 49-years-old, with just 24 percent of the workforce below age 35, according to SIA. The U.S. semiconductor industry also employs a greater share of non-white workers compared to the manufacturing sector as a whole and all other industries nationwide.

Developing the semiconductor workforce of tomorrow

Recognizing the urgency of the workforce shortage, manufacturers, industry associations, universities, and state governments are working together to build and broaden talent pipelines:

• In a recent SIA webinar, one semiconductor manufacturer highlighted its ambassador program, which sends employee volunteers into classrooms to talk about careers in STEM.
• SEMI, the global trade association representing the electronics manufacturing and design supply chain, has an immersive program to teach high schoolers about the high-tech job opportunities available to them.
• Earlier this year, Purdue University in Indiana launched the nation’s first Semiconductor Degrees Program. Students will design, fabricate, and test their own semiconductor chips and have opportunities to participate in internships or co-op experiences.
• The Michigan Economic Development Corporation recently announced a new semiconductor technician apprenticeship program that will focus on “upskilling” the workforce.

Finding and retaining semiconductor workers today

Initiatives to build talent pipelines are critical for the long-term success and sustainability of the semiconductor industry and our global economy. But companies still need workers right now. Retention must be integral to employers’ talent strategies, as there are only so many people with the necessary skills and industry knowledge to do these jobs effectively today.

Many employees have grown partial to their work-from-home arrangements and, even as concerns over COVID-19 have subsided, are still hesitant to return to the office. While not every job and task in the semiconductor industry can be performed offsite, companies must be cognizant of workers’ preferences as they seek to find and retain talent.

Some employers are increasing pay to entice workers to stick around. At the end of 2021, Intel told employees it would boost wages companywide by $1 billion and increase stock compensation by $1.4 billion throughout 2022.

Sustained success in the semiconductor industry

As the semiconductor industry rallies behind federal legislation that would provide $52 billion in funding and open the door to new fabrication plants nationwide, addressing the chip-making talent shortage has never been more dire.

In the short term, employers must focus on retaining the talent they do have and upskilling workers, when possible, to keep them competitive. At the same time, the industry should continue exploring innovative, longer-term partnerships to get students interested and excited in STEM careers while providing hands-on training to the semiconductor workforce of tomorrow.