Chip industry could face labor shortage on back of fast-paced US growth

The semiconductor industry could be facing a major labor shortage as industry growth has outpaced the availability of skilled workers in the US. This potential crisis could delay the deployment of artificial intelligence (AI), which depends on chip innovation to thrive fully, new research suggests.

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“The lack of specialized personnel can really impact silicon production, since skilled workers are essential for the intricate processes involved in chip manufacturing,” noted Beatriz Valle, senior analyst, enterprise technology & services, at GlobalData. “A lack of qualified personnel can lead to delays in production schedules in what already are extremely long production lifecycles, affecting the supply chain and leading to shortages of chips.”

Indeed, that various OEMs are planning in the US. This could delay ambitious plans to expand domestic production of chips and thus create a different sort of issue for the industry.

“This could lead to higher costs of building fabs in the US, which is already a big concern,” Gupta noted.

Measures already in place to dodge labor shortage

The US currently has some measures in place to help the US labor market ramp up quickly to fill in gaps of skilled workers in the semiconductor space, Valle noted.

TSMC, for example, which is increasing chip production significantly in Arizona, already has delayed the start of production at a planned factory there from this year to next due to a shortage of skilled workers. It’s currently sending experienced technicians from Taiwan to train US workers as “a temporary measure to help bridge the skills gap,” she said.

However, there is no silver bullet to solving the issue, “since what is required is educating workers in long-term investment drives, which is something that can not be improvised,” Valle said.

For its part, the Biden administration signed into law the CHIPS Act in 2022 to boost semiconductor manufacturing in the US. One key aspect of the act is to set up a Workforce Partner Alliance with a focus on closing the skills gap for researchers, engineers, and technicians across semiconductor design, manufacturing, and production in the hopes of dodging a semiconductor labor crisis altogether.