The U.S. semiconductor industry is projected to face a shortage of 146,000 workers by 2029. Last year, the Semiconductor Industry Association (SIA) estimated a shortfall of 67,000 by 2030, meaning the projected shortage has more than doubled in just one year. The surge in demand for artificial intelligence (AI) semiconductors has prompted major countries, including the U.S., to make massive investments in facilities. However, there is an increased risk of these facilities not being fully operational due to a lack of available talent.
According to the Financial Times on Aug. 13, consulting firm McKinsey’s report released on Aug. 2 projected that an additional 164,000 semiconductor engineers and technicians will be needed in the U.S. from this year until 2029. However, only 18,000 new workers are expected to join the chip industry during this period, resulting in a projected shortage of 146,000 by 2029. The FT reported that there has been a belief that “increasing chip manufacturing capacity was simply a matter of money,” but it turns out cash alone is insufficient for chipmaking. The report also noted that “the jobs-to-workers gap [in the chip sector] is becoming dangerously wide.” The shortage of semiconductor workers is not just a U.S. issue; companies in South Korea and Japan are also struggling to secure talent.
The deepening talent shortage is due to significant investments by major countries, including the U.S., China, and Japan, all vying for semiconductor dominance. There are currently 123 semiconductor production facilities under construction worldwide, with China accounting for 43 and the U.S. for 25.
The U.S. government and private sector plan to invest $250 billion (about 342 trillion won) by 2032 to create over 160,000 new jobs. This workforce needs to be sourced from both the U.S. and international pools, yet the supply is falling short. When the CHIPS Act was announced, which includes substantial subsidies for building semiconductor production facilities in the U.S., the U.S. pledged to invest 18 trillion won to bridge the workforce gap through talent development. However, McKinsey estimates that even if the talent development programs under the CHIPS Act are fully implemented, there will still be a shortage of 59,000 workers by 2029.
Bill Wiseman, a senior partner at McKinsey, added that high turnover rates in the semiconductor industry, driven by factors such as work environment issues, exacerbate the problem. Employees at TSMC’s U.S. facility are reported to be dissatisfied with long working hours and high workloads. The New York Times noted that cultural clashes between Taiwanese managers and American workers contribute to difficulties, with some employees struggling to adapt to TSMC’s demanding culture, leading to higher turnover rates.
The issue extends beyond the U.S. Japan, aiming to reclaim its former semiconductor powerhouse status, established a semiconductor strategy in 2021. The country is attracting large investments from global semiconductor companies like TSMC and Micron and providing 9 trillion won in subsidies to the joint venture Rapidus, formed by Japanese giants such as Toyota and Sony.
However, according to industry sources, the number of job postings for semiconductor engineers on Japanese job sites has increased more than 14 times compared to 10 years ago. Japan Advanced Semiconductor Manufacturing (JASM), a foundry created by Sony and Toyota, launched recruitment activities for South Korean graduate students earlier this year. The Japan Electronics and Information Technology Industries Association forecasts that eight major semiconductor companies in Japan will face a shortage of 40,000 workers over the next decade.
South Korean semiconductor companies are also focusing heavily on retaining talent. South Korea is expected to face a shortage of about 56,000 semiconductor workers by 2031. SK Hynix will host a “Tech Day” event starting on Aug. 20, visiting major domestic universities such as Seoul National University and POSTECH to recruit graduate students in semiconductor-related fields. Unlike in previous years, the company’s CEO will attend the annual event this time. Samsung Electronics’ DS (semiconductor) division has also eased the criteria for experienced hires since February last year to lower the threshold.
