V almost two years since President Biden signed the CHIPS and Science Act into law. with the goal of revitalizing the US semiconductor industry, revenue performance was impressive. So far, the Commerce Department has announced nearly $30 billion in grants and an additional $25 billion in loans to leading chipmakers, as well as generous tax breaks to give the sector an additional boost. This attracted a staggering $450 billion in private investmentand the development of large new plants from Ohio to Arizona.
But experts say Luck that as the CHIPS Act enters a new phase and planned projects begin to come online, they are bracing for a major obstacle: the factories don’t have enough skilled workers to staff them.
“Labor is a really important potential bottleneck,” a senior CHIPS Act official, who agreed to an interview on the condition that they not be directly named, told Fortune. “This country is home to some of the greatest talent in the world. But as we have sharply reduced our presence in semiconductor manufacturing over the last 35 years, we have lost many of these skills and we need to revive them.”
Following a decades-long trend of outsourcing skilled labor for chip manufacturing to Asia, A leading semiconductor trade group estimates that the U.S. currently has a shortage of approximately 67,000 skilled workers.— or 58% of all new jobs created by CHIPS Act investments by 2030. Federal officials, nonprofits and educators are already working hard to figure out how to close this gap and counter the effects of long-term manufacturing abandonment.
“It’s impossible to run an economy like ours without a strong manufacturing sector,” said Mike Russo, president and CEO of the National Institute of Innovation and Technology (NIIT). Luck. “This is a fundamental component of innovation. If you want to be a leader, you need innovation.”
At the dawn of the commercial semiconductor era in the 1970s, the US was the undisputed global center of talent in the industry. American companies, including Texas Instruments and Micron, were the world’s biggest innovators, attracting top-level engineering talent and producing many of their own chips domestically.
However, in subsequent decades, the industry’s business model changed. Many leading chip designers—companies that design complex semiconductor circuits, including Nvidia, Intel and AMD—have maintained operations in the United States. But as manufacturing became more complex and specialized, the industry began to outsource the actual physical production of advanced chips to Asia. Jobs first turned to Taiwanese giant TSMC, which currently produces 92% of the world’s advanced chips used for advanced artificial intelligence and computing applications.
Bringing “sexy” back into production
As semiconductor manufacturing jobs have left the country, the American talent base has dried up. This shift was only accelerated by a broader, decades-long decline in the field of vocational technical public education. The domestic economy has moved from being primarily dependent on manufacturing to being more service-oriented.
“There used to be shopping courses. When someone enrolled in college, [they] one could do electrical, mechanical, iron, shop, carpentry…[that was] it’s all part of your regular public education. It’s gone,” said Russo, a former director of government relations for chipmaker GlobalFoundries and a longtime advocate for labor in the semiconductor industry. “This has led to the erosion of the core talent that you would have had available to improve your skills – to get [workers] into more automation and semiconductor industries.”
Many hardware design and manufacturing jobs have also been replaced by an emphasis on pursuing advanced STEM degrees.
“For years, semiconductor companies like Intel have relied on community college students to fill the majority of technical jobs in [factories]Over the years, however, the emphasis on training technical professionals has waned as companies have invested more in science, technology, engineering and mathematics (STEM) education and in funding research for bachelors, masters and PhDs. program,” Intel wrote in 2023 Semiconductor Industry Labor Shortage Report.
In recent decades, schools have poured money into advanced STEM education and pushed students away from the more skills-based technical education needed in the semiconductor sector.
“We need to make semiconductor manufacturing attractive,” said a CHIPS Act official.
And the entire industry is already mobilizing to do just that, from educators to policymakers to nonprofits. Much hinges on promises that new semiconductor manufacturing jobs will be secure and sustainable, supported by strong government support for the sector. All major manufacturers that received government subsidies under the CHIPS Act agreed to extensive terms that ensure they keep American manufacturing sites open long-term and contribute to workforce training and development.
“It will be years of hard work on the ground—building programs, making connections, creating stakeholder groups, getting schoolchildren interested in semiconductors,” the official said. “Here’s what it takes. And we will achieve this, but it will take a lot of work.”
Government officials insist that the tens of thousands of manufacturing jobs the CHIPS Act will create will be durable and will be protected from companies outsourcing production overseas to save on labor costs. But in recent history, other industries received large government handouts and then moved offshore: The loss of millions of manufacturing jobs over the past 50 years in sectors such as the auto and electronics industries has burned the American economy., causing mass unemployment And severe weakening of supply chains.
Critics of the CHIPS Act are skeptical, arguing that not all the jobs created by semiconductor companies will be available to workers without advanced degrees. There is no promise that the semiconductor industry can continue to support job growth without significant technological development, and increasing automation in the sector threatens to undermine government promises to create large numbers of chip manufacturing jobs as This was stated by the Carnegie Endowment for International Peace.
Officials counter that the CHIPS Act money comes with strict conditions that require recipient companies to remain in the U.S. for the long term, and that manufacturing jobs will be protected by the vital role of semiconductors in everything from trade to entertainment to national security .
“CHIPS for America… is going to create hundreds of thousands of good jobs that can change lives, offer family-sustaining benefits and lead to long-term careers,” Commerce Secretary Gina Raimondo. said in a speech last year.
New career path
Under Russo’s leadership, NIIT has spearheaded an extensive network of training and internship programs to help close the semiconductor talent gap. The nonprofit has partnered with more than 80 local and regional internship programs in 17 states across the country, which have collectively placed nearly 5,000 students in paid workforce training programs over the past year and a half, Russo said. They also work with local colleges and universities to ensure that students consider working in the semiconductor industry as a viable career option and receive the right training.
Russo noted that many of the workforce skills that the semiconductor industry now desperately needs do not require a doctorate or even a college degree—just specialized technical education that many candidates with a high school education and relevant training are capable of. mastering.
“Part of our strategy is really about attracting [students] and connect them with the same fundamental translation skills that you can use in all of these strategic [semiconductor] industry sectors,” Russo said.
Companies that receive CHIPS Act funding also participate in worker training. For example, Intel’s $8.5 billion grant includes $50 million earmarked specifically for workforce training and adds to the $250 million Intel has already spent on hiring new workers over the past five years.
“If you look at what some of these companies have taken on… Our money goes directly to the workforce. [development]”,” the official said. “These are all the efforts listed above.”