Who Will Make the Chips?
The U.S. is betting billions on its semiconductor push, but it needs more people for the factory floors.
Kai Ze Ee didn’t start out wanting to work in semiconductors. In fact, he spent most of his teens—at a U.S. boarding school—playing golf, with a desire to go pro. But when the pandemic hit, he decided to go back to his native Singapore for two years of mandatory military service and began exploring other career options on the weekends.
Kai Ze Ee didn’t start out wanting to work in semiconductors. In fact, he spent most of his teens—at a U.S. boarding school—playing golf, with a desire to go pro. But when the pandemic hit, he decided to go back to his native Singapore for two years of mandatory military service and began exploring other career options on the weekends.
One of the topics that ended up piquing his interest was renewable energy. Studying a battery technology called thermal photovoltaics led Ee to realize how critical semiconductors were.
“Not only did I see how prevalent semiconductors were in many technological systems, but its future applicability, not just in renewable energy,” he said in an interview.
Ee, 21, an international student at Indiana’s Purdue University, represents precisely who the United States needs more of in its push to regain its status as a chip manufacturing powerhouse. The CHIPS and Science Act, which President Joe Biden signed into law last year, has become a cornerstone of his administration’s strategy to counter China’s technological and manufacturing dominance. The legislation sets aside nearly $53 billion to bring semiconductor factories back to U.S. shores, with a quarter of that sum earmarked for investment in research and job creation.
Assembling a workforce will be critical to the plan’s success. Ee is one of nearly six dozen students who have signed up for the university’s summer semiconductor program, and next year, he wants to work at Purdue’s NanoX Lab, which makes hardware for artificial intelligence—a “super hot topic right now,” in his words.
Semiconductor chips now underpin nearly every facet of our lives, powering devices ranging from smartphones to washing machines to cars. Crucially, they also power advanced weapons systems and artificial intelligence, making them the focal point of Biden’s escalating competition with China and his desire to burnish American technological leadership.
“America invented the semiconductor. And in 1990, we produced nearly 40% of the world’s chips. Now, we produce just 12%,” Commerce Secretary Gina Raimondo, the lead evangelist for the administration’s ambitious semiconductor push, tweeted recently.
“There’s a real call to action,” said John Howarter, the director of Purdue’s undergraduate research office who helps run the summer program in semiconductors. For a lot of engineering students, Howarter said, “there’s a certain amount of pride they have in the work that they’re going to do, and I think they want to feel like they’re contributing to something that’s big and important and is going to help society.”
Companies, too, have answered the clarion call, with more than 50 new semiconductor projects announced across the United States since the CHIPS Act was first introduced, according to data from the Semiconductor Industry Association (SIA). With these projects, the companies plan to create more than 44,000 new jobs.
What the industry is now sweating over is whether the United States has enough skilled workers to fill those jobs. The question now is how create an effective engineering talent pipeline to make the United States a global semiconductor powerhouse.
An aerial view shows the Taiwan Semiconductor Manufacturing Company (TSMC) factory in Nanjing, China, on Aug. 10, 2022.VCG/VCG via Getty Images
It’s impossible to talk about the chip industry without talking about a single company, based in Taiwan: the Taiwan Semiconductor Manufacturing Company, better known by its acronym, TSMC. The company accounts for more than half of the global semiconductor production market and makes 92 percent of the most advanced chips.
Its latest big expansion, announced a few months after the passage of the CHIPS Act, is in Phoenix, Arizona, where it is building a new factory—or fab, in semiconductor parlance—in addition to another one announced in 2020. The Taiwanese company is more than tripling its original investment to $40 billion and says the two facilities will create 4,500 direct jobs.
But hundreds of those jobs will initially be filled by engineers flown in on chartered planes from the company’s Taiwanese factories and U.S. engineers sent to Taiwan for training, highlighting the lack of skilled American talent.
“If you want to bring back manufacturing to the United States … you have to have semiconductor know-how, you have to have people who know how to operate the fabs and who know how to build the fabs, because every fab is very specific to a chip,” said Divyansh Kaushik, associate director for emerging technologies and national security at the Federation of American Scientists. “It’s hard to develop that know-how.”
McKinsey estimates that by 2030, the United States will have 300,000 fewer engineers and 90,000 fewer skilled technicians than it needs across industries. Despite the fact that semiconductors are more important to the world than ever, the share of U.S. students graduating with electrical engineering degrees that are essential for many semiconductor jobs has declined significantly in the past two decades, according to another report last month from the Information Technology and Innovation Foundation (ITIF). Deloitte forecast that the U.S. chip industry specifically faces a looming shortage of 70,000 to 90,000 workers in the coming years.
“You can have all the fancy equipment, the best utensils and kitchen knives or whatever in your kitchen, but ultimately, unless you have the best chefs, people are not going to be able to make use of all the investments that you’ve made,” Kaushik said. “And it’s the best chefs that are in scarce capacity.”
“If we don’t invest in America’s manufacturing workforce, it doesn’t matter how much we spend. We will not succeed,” Raimondo said in a speech at Georgetown University earlier this year. “We need to be both honest with ourselves and creative with solutions if we’re going to address this workforce challenge.”
There has been some progress. Chipmakers such as TSMC, Intel, and Micron are partnering with local community colleges in Arizona and New York—locations where they’re spending tens of billions of dollars to build new fabs that are expected to collectively create close to 20,000 jobs. Those programs are mainly targeted at the biggest portion of the required semiconductor workforce: the technicians who work the factory floor. Training those technicians typically requires shorter timelines, with certificate courses or two-year associate’s degrees providing them enough of a foundation. Companies and industry associations are also working on other initiatives such as re-skilling programs for military veterans.
“Veterans are a highly qualified, very dependable workforce,” said Ajit Manocha, CEO of the semiconductor industry association Semiconductor Equipment and Materials International, or SEMI. “That will only solve part of the problem, but it’s a big part of the solution.”
Larger institutions are also making a significant push into developing a talent pipeline. Purdue University appointed a “chief semiconductor officer” earlier this year, Mark Lundstrom, who is pretty certain he’s the only person with such a title in the nation. Purdue’s semiconductor initiatives, which include undergraduate and graduate degrees specifically geared toward the industry, were launched about a year ago, Lundstrom said, “before we actually knew for sure that the CHIPS Act would be passed, but we felt we can’t wait.”
Lundstrom is encouraged by what he’s seen so far in terms of curiosity and interest from students, pointing out that the summer program in which Ee is enrolled received nearly 500 applications. That’s 10 times the university’s expectation and significantly over the program’s capacity.
But there’s an elephant in the clean room, and it’s one of the United States’ most fraught political issues: immigration.
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IBM workers walk in a 12-inch wafer chip fabrication plant in Fishkill, New York, on July 20, 2004. Mario Tama/Getty Images
Building up an entirely domestic workforce is going to take time that Washington may not have as tech competition with China intensifies. While the push to develop U.S. talent to staff chip fabs is in full swing, there’s a near-universal recognition that it’s not enough. The United States not only needs to train new engineers quickly; it also needs to make it easier for the ones who come here, like Ee, to stay.
“We have programs to go down and try to help make sure that students are able to do algebra by seventh grade, because if they can’t succeed in that, they’re probably not on a track to getting into an engineering program,” Lundstrom said. “The pipeline that we’re dealing with is pretty well fixed for the next decade.”
And is that pipeline enough to meet the U.S. semiconductor industry’s needs? “I don’t think so,” he said. “We have to address the immigration challenge—I mean this is a competitive advantage that this country has. Bright people from all over the world want to come here and would like to stay if there are opportunities, and we need to make it easier for them to do that.”
Science, technology, engineering, and mathematics (STEM) education in the United States has been declining since the 1980s, accelerated by the outsourcing of thousands of manufacturing jobs overseas. A report last year by the Center for Strategic and International Studies attributed the U.S. STEM gap to high costs and time for a college degree, lack of access to the requisite high school courses, and a shortage of qualified teachers in those subjects. “While 30% of current job openings are in STEM fields in most large metropolitan areas, on average, only 11% of the U.S. population has a degree in STEM,” the report said.
International students make up the majority of more advanced engineering programs in the United States. (This is not true at the undergraduate level or lower.) According to the ITIF report, the number of bachelor’s and master’s degrees awarded to foreign nationals grew by 110 percent between 1997 and 2020, compared to just 18.2 percent for U.S. citizens.
The engineers with master’s degrees and doctorates that the semiconductor firms need may be smaller in number than the technicians required, but they are absolutely essential to the process and in even shorter supply domestically. “It’s just the opposite at the graduate level—domestic students are in the minority there,” Lundstrom said. “Semiconductors has been one of the fields that has most heavily relied on international talent, so that’s an issue.”
Most foreign students rely on the H-1B visa program, which lets in 65,000 people a year across industries through a lottery system that is disproportionately used by the technology industry. While there have been some efforts to grow that pie, including longer training visas for graduates of STEM programs and additional quotas for advanced degree holders, it’s still only a drop in the bucket, and the pathways to staying in the country beyond the three years allotted by the H-1B through a green card have backlogs that in many cases stretch literally decades.
“What happens with a lot of these companies is they try to hire in the U.S., they strike out with the H-1B two cycles in a row, and then they have the same job but they have to go do it somewhere else,” said Eric Breckenfeld, director of technology policy at the SIA. “It’s just a drain on efficiency. There’s no reason that it needs to happen.”
Several efforts to reform the system over the years have fallen victim to congressional politicking, including a provision in an early version of the CHIPS Act making the green card process easier for master’s and doctoral graduates working in technology or “critical” industries like semiconductors, which was blocked by Iowa Republican Sen. Chuck Grassley.
Raimondo also acknowledged the issue last month during a press briefing announcing a new National Semiconductor Technology Center. “Absent immigration reform, which is badly needed, we are living within the legal constraints that we have,” she said.
The growing U.S. rivalry with China, particularly around semiconductors, has also given the workforce debate a renewed sense of existential urgency. A letter earlier this month addressed to the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party was signed by 70 experts, including dozens of former government officials, urging them to do more to address STEM immigration issues.
The signatories argue that China is “aggressively” growing its own STEM talent pool, much of which is focused on critical technologies such as artificial intelligence and hypersonics.
“China is the most significant technological and geopolitical competitor our country has faced in recent times,” the letter concluded. “With the world’s best STEM talent on our side, it will be very hard for the United States to lose. Without it, it will be very hard for us to win.”
The race for global semiconductor talent is expanding even among U.S. allies and partners, with governments in the European Union, United Kingdom, Japan, South Korea, and India floating their own roadmaps to enhance their role in the global supply chain. Japan positioned itself as a key player in the global chip supply chain when it hosted the G-7 summit last weekend, signing deals with Purdue and Micron as well as a semiconductor partnership with the United Kingdom.
“China doesn’t have to rely on the rest of the world—they have plenty of people on their own team,” Kaushik said. “We need the rest of the world with us.”
Ee still has a few years at Purdue until he has to make big career decisions, but as of now his preference would be to stay in the United States rather than go back to Singapore.
“It’s really just dependent on what types of opportunities I’m provided or what types of jobs I’m able to get,” he said. “I see a bigger opportunity in getting some type of semiconductor-related job here in the U.S.”
Rishi Iyengar is a reporter at Foreign Policy. Twitter: @Iyengarish
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