A new report highlights that the shortage of highly-skilled workers in the United States is intensifying, a problem that could hinder the construction progress of semiconductor plants representing hundreds of billions in national investment and constrain future chip production capacity. Unless industry collaboration strengthens and government funding continues, the US plan to revitalize domestic chip manufacturing will face significant challenges.

This new study, conducted jointly by McKinsey & Co., the semiconductor industry association SEMI, and the National Science Foundation, which includes surveys of employers, indicates that Texas, California, Arizona, New York, and Ohio will see the most pronounced talent gaps. These states are precisely where the new wave of US semiconductor manufacturing projects is most concentrated. The report projects that by 2030, the US semiconductor industry could face a shortfall of up to 157,000 full-time high-skilled positions.

The labor shortage is the latest obstacle for chipmakers seeking to expand their US manufacturing footprint and reverse a decades-long trend of production capacity shifting to Asia. Concurrently, rising costs for raw materials like copper, steel, and cement are also increasing the expense of building new facilities. These facilities are a key component of the current economic agenda.

While the semiconductor sector grapples with this employment gap, the artificial intelligence boom and increased corporate investment in AI are, conversely, believed to be triggering layoffs in other industries, particularly in the tech sector. Data from the firm Challenger, Gray & Christmas, which tracks corporate layoff announcements, shows that nearly 102,000 job cuts announced so far this year have been attributed to artificial intelligence.

The report warns that if the talent gap is not addressed promptly, not only could the planned hundreds of billions in corporate investment be impacted, but the federal subsidies established by the 2022 CHIPS and Science Act to boost US domestic chipmaking capacity may also fail to achieve their intended effects. The report recommends sustained increases in government funding, improving semiconductor-related curriculum systems, and exposing students earlier to career pathways within the chip industry.

Taylor Roundtree, a McKinsey partner involved in the study, stated, "The industry's talent pipeline has long been insufficient to meet demand. More and more people are realizing the potential gap is so large that a collective effort is required."

The report estimates that by 2030, 74% of the semiconductor industry's vacant positions will be in manufacturing, with 60% of the shortfall in engineering roles. While talent development programs enabled by the CHIPS Act have improved the pipeline for technical operators needed for new fabs, they fall far short of meeting the enormous demand for manufacturing engineers and hardware engineers.

The survey shows that nearly three-quarters of semiconductor companies report that hiring engineers has become a major challenge. The root of the problem lies in the fact that only about 3% of US engineering graduates ultimately enter the semiconductor industry, with most preferring to enter higher-paying software fields, such as artificial intelligence.

The CHIPS Act has allocated $200 million to the National Science Foundation to support workforce development programs through 2027, utilizing initiatives like the National Network for Microelectronics Education for student education and training new industry entrants. The report advises maintaining this level of funding support but does not further discuss whether these programs should be extended or expanded.

To attract more young people to the semiconductor industry, various new outreach methods are being tried across the US. For example, in Arizona, elementary school students can touch semiconductor manufacturing equipment and try on the white, full-body "bunny suits" that fab workers must wear, which protect against microscopic particles contaminating the delicate chipmaking process.

Roundtree noted, "The US hasn't seen semiconductor manufacturing expansion on this scale in decades. For many, from high school career counselors to university professors, this still isn't a career path they naturally recommend to students."