The United States, which has led global semiconductor design, is delaying factory investment schedules worth hundreds of trillions of won because it cannot find enough people to actually make the chips.
On the 7th (local time), an analysis involving McKinsey, the Semiconductor Equipment and Materials International (SEMI), and the National Science Foundation (NSF) said the U.S. semiconductor industry could be short up to 157,000 skilled workers by 2030. About three-quarters of semiconductor corporations that responded to the survey said they are having trouble hiring engineers. The United States earns more than half of global semiconductor revenue, led by Nvidia, AMD, and Qualcomm, but much of its ability to mass-produce those chips at domestic factories has disappeared over the past 30 years.
McKinsey estimated that 104,300 engineers are needed to manage semiconductor processes and equipment, but only 16,300 new workers can be supplied, leaving about 88,000 positions unfilled. It also said 72,400 technicians are needed to operate and inspect equipment on production lines, but the available supply stands at 8,900. McKinsey projected that by 2030, about 74% of unfilled jobs in the semiconductor industry will be in manufacturing, and 60% will be in engineering.
To make matters worse, a series of massive new plants backed by astronomical sums are now waiting to come online. TSMC plans to invest up to $265 billion (about 401 trillion won), including 12 semiconductor and packaging facilities in Arizona. Micron plans to spend up to $100 billion (about 151 trillion won) to build memory production facilities in New York. Samsung Electronics is building a logic chip plant in Texas. Intel's $28 billion (about 42 trillion won) plant under construction in Ohio is also expected to face a labor crunch once production ramps up. McKinsey said labor shortages in the semiconductor industry will be particularly severe in regions with clusters of new plants, such as Texas, California, Arizona, New York, and Ohio. New factory construction is considered a core project in President Donald Trump's economic policy. But Bloomberg said, "Rising prices for copper, steel, and cement are further increasing construction costs."
At the root of the severe labor shortage in the U.S. semiconductor industry is a restructuring of the industrial landscape that has unfolded over decades. U.S. corporations have focused on profitable design and software over the past 30 years instead of production, which requires massive capital expenditures and carries cyclical risks. Nvidia and AMD have grown under a "fabless (semiconductor corporations without factories)" model that outsources manufacturing to TSMC in Taiwan rather than making chips themselves. It is a choice that reduces capital burdens for individual corporations and boosts margins. As a result, as major U.S. semiconductor corporations all chose similar paths, the overall domestic production base shrank. According to the Semiconductor Industry Association (SIA), the U.S. share of global semiconductor production capacity plunged by 27 percentage points, from 37% in 1990 to 10% in 2022.
On top of that, avoidance of STEM manufacturing jobs among young people in the United States has aggravated hiring woes. According to Bloomberg, only about 3% of U.S. engineering graduates enter the semiconductor industry. Many graduates choose artificial intelligence (AI) and software corporations, which pay more and offer freer work styles than semiconductor manufacturing that requires factory work. Taylor Roundtree, a McKinsey partner who took part in the analysis, said, "Semiconductors are an industry that has not seen large-scale capacity additions in the United States for decades," adding, "For high school counselors or university professors, semiconductor manufacturing is not a career they naturally recommend to students."
With the clock ticking, the U.S. government and industry rushed to craft countermeasures, but the situation remains tough. The CHIPS Act, enacted in 2022, allocates federal funds to train semiconductor workers. Under the law, the U.S. government is investing $200 million (about 300 billion won) in the NSF by 2027 to run student education and new worker training programs. Experts said the programs have somewhat increased the supply of production technicians, but have done little to ease shortages of manufacturing and hardware engineers. In Arizona, where TSMC facilities will be located, even hands-on programs have appeared in which elementary school students handle semiconductor equipment and try on cleanroom suits. Citing experts, Bloomberg said, "If the labor shortage is left unaddressed, it could undermine not only the investments corporations have planned but also the impact of federal subsidies under the CHIPS Act." The industry has proposed continued government funding and expansion of semiconductor curricula to expose students to the industry earlier as a solution.
Even if workers are hired with difficulty, there are many hurdles to clear before mass-producing quality chips. To mass-produce semiconductors, it is not enough to have personnel, buildings, and equipment. Manufacturing engineers who tune process conditions to reduce defect rates and technicians who repair equipment must be in place, along with suppliers of high-purity gases, chemicals, wafers, and photomasks, and facilities for ultrapure water and waste treatment clustered around the plant. Such partner ecosystems have taken shape over decades in Hsinchu, Taiwan, and in Hwaseong, Pyeongtaek, and Icheon in Korea. But new manufacturing plants in the United States must rebuild supplier networks from scratch.
Experts said that while design blueprints and advanced equipment can be assembled with investment, on-the-ground experience and manufacturing know-how to stabilize Production yield (the share of chips on a wafer that operate normally) are hard to build in a short time. Some also noted that it takes years for new graduates to grow into skilled workers who can take responsibility for real processes. Roundtree told Bloomberg, "Across the entire semiconductor market, there simply aren't enough people for the industry to share," adding, "The potential gap is so large that the industry ultimately has to solve it together."