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The U.S. Semiconductor Industry Resurrection will not come without its challenges

Blog #003

Global semiconductor sales just surpassed the $600 billion mark and it is expected to become a $1 trillion per year industry by the 2030’s. With six or more large fabs going up in the US alone, and with this continued growth around the world, we will also experience many challenges.

One of the top challenges we will face is labor: according to Korn Ferry, labor shortages in the semiconductor industry are currently costing companies over $2 trillion around the globe. And that outlook is not expected to get any better in the short term within the semiconductor industry. With the skilled labor shortages, we will continue to see competition between companies – as well as opportunities for employees to advance their careers for higher-paying jobs or better work-life balance. Today the industry is seeing incredible turnover and a large number of experienced workers leaving the workforce that will be looking to retire in the near future. Currently, the US semiconductor industry is not able to handle this large turnover with such little backfill. The impact of labor shortages will continue to worsen the semiconductor shortages we are already seeing.

Chipmakers and equipment manufacturers currently have two options to fill skilled positions. They can either look for candidates who have been trained and educated through a university and obtained an academic degree, or they can hire candidates who have been trained as tradespeople through many years of hands-on experience. Both are slow processes. With technology advancing at the speed that it does, universities cannot give students hands-on experience with the latest technology since the equipment can cost over $100 million for a single machine.

The second major challenge our industry is facing is related to the supply chain. Today, semiconductor equipment manufacturers have an 18-month waiting list. Some specialized transformers required to build a fab are on a backlog for 30 months. This week, Nanya Tech announced they will delay the build of their new $10.3 billion fab by 6 months due to labor shortages and supply chain issues. The other supply chain issue we may experience further down the line is wafers, will wafer manufacturers be able to keep up with the supply needed for all these new fabs running at full production? Supply chain issues are not a temporary problem, but a larger challenge the industry will need to tackle in the future due to all the infrastructure and resources required to keep a semiconductor manufacturer running at full production.

As we continue to navigate an era of rising global instability and war, additional resources required to keep the semiconductor industry operating smoothly may prove bottlenecks. For example, recently there has been much talk focused on Neon gas. . Currently, Neon mostly comes from war-torn Ukraine, There are a lot of unknowns about whether this supply chain will be sustainable in the future.

According to the CEO of Global Foundries, the chip industry output must double in the next 10 years. In order to support that portion of growth in the US, there are several possible solutions to these issues that challenge the industry. To begin, Congress needs to pass the new Chips Act bill so that we can fund companies like Intel who are going to invest $100 million over the next decade to establish semiconductor manufacturing education and research collaborations with universities, community colleges, and technical educators across the U.S.

To further help resolve labor shortages, the US government can open the doors on immigration policies so highly skilled and educated workers from other countries can apply for open positions and university scholarships that are not being filled.

To make this industry growth in the US successful, we must collaborate with private corporations so they can build a sustainable industry together. Corporations and governments partnering and funding universities will be necessary for the future of this industry.

Moov matches idle or surplus equipment with buyers who seek high quality equipment at a deep discount and reduced lead-time. The platform also integrates offerings such as payments, logistics, asset management, and other add-on services.
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© 2022 Moov Technologies Inc. All rights reserved.
*Subject to our terms and conditions.
Moov matches idle or surplus equipment with buyers who seek high quality equipment at a deep discount and reduced lead-time. The platform also integrates offerings such as payments, logistics, asset management, and other add-on services.
We'd love to meet with you!
548 Market Street, San Francisco, CA 94105
© 2022 Moov Technologies Inc. All rights reserved.
*Subject to our terms and conditions.