Revenue numbers have been impressive in the nearly two years since President Biden signed into law the Chip and Science Act aimed at reviving the U.S. semiconductor industry. 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 further boost the industry. This has attracted as much as $450 billion in private investment and the development of massive new factories from Ohio to Arizona.
But experts tell wealth As the CHIPS Act enters a new phase and planned projects begin operating, they are facing a major obstacle: The factories don’t have enough qualified workers to staff them.
“Labor is a very, very significant potential bottleneck,” a senior CHIPS Act official told Fortune Magazine, who agreed to be interviewed on the condition that his name not be used directly. “Our country has some of the best talent in the world. But because our footprint in semiconductor manufacturing has been significantly reduced over the past 35 years, we have lost a lot of those skills and we need to reinvigorate them.
After years of outsourcing skilled chip manufacturing labor to Asia, leading semiconductor trade groups estimate that the United States currently has a shortage of about 67,000 skilled workers, accounting for 58% of all new jobs that would be created by 2030 Chip Act investments. Federal officials, nonprofits, and educators are already working to find ways to close that gap and deal with the consequences of America’s long abandonment of manufacturing.
“You can’t run an economy like ours without a solid manufacturing industry,” said Mike Russo, president and CEO of the National Institute of Innovation and Technology (NIIT). wealth. “This is a fundamental component of innovation. If you want to lead, you have to innovate.
At the dawn of the commercial semiconductor era in the 1970s, the United States was the industry’s undisputed global talent hotspot. U.S. companies such as Texas Instruments and Micron are the world’s biggest innovators, attracting top engineering talent and producing many of their own chips domestically.
Over the following decades, however, the industry’s business model changed. Many of the top chip design companies – companies that design the complex circuits of semiconductors, including Nvidia, Intel and AMD – have kept their operations in the United States. But as manufacturing became more complex and specialized, the industry began outsourcing the actual production of advanced chips to Asia. Jobs mainly went to Taiwanese giant TSMC, which currently produces 92% of the world’s cutting-edge chips used in advanced artificial intelligence and computing applications.
Bringing “sexiness” back to manufacturing
As semiconductor manufacturing jobs leave the United States, the U.S. talent base is drying up. This shift has been further accelerated by a decades-long decline in skills-based public education. The domestic economy has shifted from being dominated by the manufacturing industry to being dominated by the service industry.
“In the early days, there were shop courses. When someone signed up for college, [they] You can choose from electrical, mechanical, steel, shop, carpentry…[that was] All parts of regular public education. That’s gone,” said Russo, the former director of government relations for chipmaker GlobalFoundries and a longtime labor advocate in the semiconductor industry. “This results in the erosion of your basic ability to improve your skills – gain [workers] Enter the semiconductor-related industries with a high degree of automation.
Many hardware engineering and manufacturing jobs are also being replaced by an emphasis on advanced STEM degrees.
“For years, semiconductor companies like Intel have relied on community college students to fill the majority of the company’s technical staff positions. [factories]But over the years, the emphasis on training technicians has waned as companies have stepped up investment in science, technology, engineering and mathematics (STEM) education and funding for bachelor’s, master’s and doctoral studies. Intel wrote in a 2023 report on the semiconductor labor shortage.
In recent decades, schools have invested heavily in advanced STEM education and moved students away from the more skills-based technical education required by the semiconductor industry.
“We have to make semiconductor manufacturing sexy,” CHIPS Act officials said.
An entire industry has mobilized to do so: from educators to policy officials to nonprofits. Much depends on the promise that new semiconductor manufacturing jobs will be secure and sustainable, driven by strong government support for the industry. Major manufacturers that receive government subsidies through the CHIPS Act have agreed to broad terms to ensure they will keep U.S. manufacturing plants open long-term and do their part to help train and develop the workforce.
“It’s going to be years of work on the ground — building projects, making connections, building stakeholder groups, getting middle school students excited about semiconductors,” the official said. “That’s what it takes. We’re going to get there. , but this requires a lot of work.
Administration officials insist that the tens of thousands of manufacturing jobs the CHIPS Act will create will be durable and will not be affected by companies outsourcing production overseas to save on labor costs. But in recent history, other industries have received massive government subsidies that were then moved overseas: Industries such as the automotive and electronics industries have lost millions of manufacturing jobs over the past 50 years, burning the U.S. economy and causing massive unemployment , severely weakening the supply chain.
Critics of the CHIPS Act are skeptical: They argue that not all jobs created by semiconductor companies will be suitable for workers without advanced degrees. As the Carnegie Endowment for International Peace points out, the semiconductor industry cannot continue to support job growth without significant technological developments, and increasing levels of automation in the industry could undermine government commitments to provide sufficient chipmaking jobs.
Officials counter that CHIPS Act funds come with strict terms requiring recipient companies to remain in the U.S. long-term, and that semiconductors’ important role in everything from commerce to entertainment to national security will protect manufacturing jobs.
U.S. Commerce Secretary Gina Raimondo said in a speech last year: “CHIPS for America will create hundreds of thousands of good jobs that have the potential to change lives, provide family-sustaining benefits and lead to long-term careers.
new career path
Under Russo’s leadership, NIIT has pioneered a vast network of training and apprenticeship programs to help close the semiconductor workforce gap. Russo said the nonprofit has partnered with more than 80 local and regional apprenticeship programs in 17 states across the country, attracting a total of nearly 5,000 students into paid workforce training programs over the past year and a half. They also work with community colleges and universities to ensure students are encouraged to consider working in the semiconductor industry as a viable career option and receive the right guidance.
Russo noted that many of the workforce skills the semiconductor industry is currently in desperate need of do not require a Ph.D. or even a college degree at all, but only specialized technical education, which many candidates with a high school education and appropriate training can do.
“Part of our strategy is to really bring [students] Build and connect them using the same basic transformation skills you can use in all of these strategies [semiconductor] industrial sector,” Russo said.
Companies that benefited from CHIPS Act funding also stepped up efforts to train workers. For example, Intel’s $8.5 billion allocation includes $50 million earmarked for employee training, as well as the $250 million Intel has invested in bringing on new employees over the past five years.
“If you look at the commitments that some of these companies have made…our money will go directly to the workforce. [development],” the official said. “This is the culmination of all of the above efforts.”
