January 4, 2022

The Semiconductor Industry in 2022

As reported in the Wall Street Journal January 2, the U.S. semiconductor industry faces a number of challenges. Chip shortages exacerbated by the ongoing pandemic have disrupted production for American auto manufacturers and left vehicle owners waiting weeks or months for repairs. Eroding market share in semiconductor manufacturing means that many U.S. companies have had no choice but to ride out supply-chain problems and other hurdles with overseas manufacturers.

These disruptions have spurred businesses across the nation to reinvest in domestic semiconductor manufacturing. Doing so, however, poses its own challenges.

To rebuild U.S. semiconductor plants, companies will need to understand the roles and skills that future semiconductor manufacturing will require. They’ll need to invest in hiring for skills and for learning potential.

Moving Semiconductor Manufacturing Back to the U.S.

The United States once led the world in semiconductor manufacturing capacity. Over the past few decades, however, U.S. companies have increasingly relied on overseas manufacturing of American-designed chips.

In 1990, the U.S. and Europe together produced over 75 percent of semiconductors worldwide. Today, the U.S. and Europe together produce less than 25 percent, while China is en route to become the world’s largest producer by 2030, write Asa Fitch and Luis Santiago in The Wall Street Journal.

Building new fabrication plants, or “fabs,” comes with a number of challenges. The expense of a new plant is high, and cannot be done in a vacuum. “These new fabs rely on connection to the global [integrated circuit] ecosystem, a highly effective collaborative knowledge network that has taken 50 years to build,” says Jim Koonmen, executive vice president of applications at ASML.

In light of the need to support the building of new manufacturing plants within the context of the semiconductor industry’s specialized knowledge, Intel recently announced the creation of Intel Foundry Services, which provides manufacturing capacity for semiconductors within the United States and Europe. “We need enough new, global semiconductor manufacturing capacity to avoid depending on any single country or company for these crucial products,” Intel CEO Pat Gelsinger writes about the decision.

Building fabs is only the first step to bolstering semiconductor manufacturing capacity in the United States, as their counterparts in other countries have already discovered. “Part of [Taiwan’s and South Korea’s] success over the last 20 years is due to supportive government policies and access to skilled labour forces,” says Neil Campling, head of technology, media, and telecoms research at Mirabaud Securities.

Various government policies, including promised funding in the Build Back Better Act and the CHIPS for America Act, are already being considered by Congress, writes George Calhoun, executive director of the Hanlon Financial Systems Research Center at Stevens Institute of Technology. Building a skilled and reskillable workforce lies in the hands of semiconductor manufacturers.

cargo ship in the ocean; semiconductor industry concept

Confronting Disruption in Job Roles

Creating new semiconductor manufacturing capacity in the United States would be challenging enough if the work were limited to building new plants. Yet semiconductor companies also face disruption of the work itself, as changes wrought by innovation and automation create higher demand for certain skills and roles while pushing others toward obsolescence.

In a recent analysis, Eightfold found that three main role groups are necessary to run a fabrication plant successfully:

  • Logistics and Support: Accounting for only about 15 percent of plant staff, these workers nonetheless face outsized challenges as they procure materials, maintain facilities, and liaise with corporate and business services.
  • Production Engineering: Tasks performed by this group include designing, running, testing, and upgrading systems and processes. About 20 to 25 percent of fab workers fall in this category.
  • Production Operations: Currently the largest of the three groups, workers here run, monitor, and troubleshoot production equipment. They account for 60 to 65 percent of workers in most fabs.

The populations of these categories are already in flux. New innovations in manufacturing, including increased automation, are decreasing the number of production operation workers required in some fabrication plants, while placing increased pressure on workers to learn and use the skills required in production engineering and logistics.

Within each of these three categories, changes are occurring as well. The rise of new forms of design and manufacturing software, for example, are pushing workers to learn new systems and to retire skills related to older systems, software, and programming languages.

Finding the Necessary Skill Sets

Companies that committed early to building new semiconductor manufacturing capacity in the U.S. are already looking for talent. Taiwan Semiconductor Manufacturing Company (TSMC) recently announced plans to build a new U.S. plant in Arizona. In anticipation of the plant’s completion, TSMC has also announced plans to hire over 600 engineers and executives to staff the new plant, says TSMC Chairman Mark Liu.

TSMC’s hiring encompasses R&D engineers, process engineers, and other positions, according to the company’s website. The company plans to focus its recruiting efforts on recent graduates in relevant fields as well. Yet demand for these workers and their skills is already outpacing supply, and the shortage is likely to increase as more companies focus on U.S.-based fabrication plants.

The semiconductor industry currently employs workers with a wide range of skills and educational experiences. Twenty percent of semiconductor industry workers currently have no college experience, according to a Semiconductor Industry Association report. As demand for skills increases, so will pressure to look past educational attainment to the skills required for success in today’s roles and the ability to grow into future roles.

Confronting Disruption at the Employee Level

As job roles in semiconductor manufacturing fluctuate, workers’ daily tasks demand more flexibility. A White House report on U.S. semiconductor supply chains notes that “resilient production requires quick problem-solving, driven by the knowledge, leadership, and full engagement of people on the factory floor.”

The report further notes that investment in employee compensation will be vital to building a robust semiconductor manufacturing workforce. Building a fabrication plant itself is an expensive endeavor: One fab may cost $12 to $15 billion and take two years to complete, writes Randy Brown, CIO of Sun Life. Companies seeking to both build and staff new fabs will thus find themselves facing several significant costs.

Semiconductors are essential to the operation of computing technologies, including artificial intelligence. Using AI to understand disruption in job roles, map adjacent skills, and hire for potential may be a way to apply semiconductors themselves to solving the challenges posed by expanding their manufacture.

Stacked containers on ship; semiconductor industry concept

Mapping Adjacent Skills and Hiring for Potential

One way to employ AI for better hiring is to use it to understand the relationships between various job roles and skill sets. Mapping roles and skills to understand their commonalities and interrelation provides new insights to hiring managers, who can then focus on candidates with the capacity to learn quickly and grow into a necessary role.

In our analysis, we found that several roles in today’s semiconductor fabrication plants are declining due to increased automation and innovation. Many of these roles are in operations. Yet we also found that these declining roles shared essential skills with roles that are steady or increasing, such as:

  • Manufacturing technicians share various skills with process engineers and reliability engineers.
  • Equipment technicians may transition easily to equipment specialists or instrumentation and controls engineers, given the similarity of skills required.
  • Electronic technicians have several skills in common with electrical maintenance and embedded systems engineers.

Specific skills within each role also have adjacent skills. Proficiency in an adjacent skill provides a worker with the familiarity and background required to learn a new target skill quickly. Workers who possess the context provided by adjacent skills also have the ability to think through problems from a new perspective, increasing their ability to think creatively and flexibly.

A handful of skills in growing demand for semiconductor fabrication and their adjacencies include:

  • Process automation: Skill in process automation is closely related to skills in process control and process engineering.
  • Continuous improvement: Workers with skill in lean manufacturing, 5s, and Six Sigma possess adjacent skills to continuous improvement.
  • Python: Skill with Python is adjacent to skill using C++ and Java, as well as skills in designing algorithms.

Mapping adjacent roles and skills provides two essential opportunities to semiconductor manufacturers seeking to staff fabrication plants. First, it allows them to reskill and upskill employees, creating career growth opportunities by guiding workers’ existing skill sets into new, but related, domains. Second, it allows employers to broaden their talent search by including candidates whose adjacent skills will enable them to learn quickly and to offer more diverse perspectives on the work at hand.

Expanding U.S. semiconductor manufacturing capacity poses several challenges. Yet it also creates opportunities to build skills, adapt to innovation, and forge career paths. Using AI to hire for skills and potential can give the semiconductor industry the talent it needs.

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