How the U.S. Can Reshore the Semiconductor Industry
Through the upskilling and reskilling of talent, and a focus on adjacent skills, the U.S. can achieve a dramatic reshoring of the chip manufacturing sector.
As the nation has outsourced chip manufacturing over the last two decades, the talent pool and necessary expertise has eroded.
But government funding is available to address this challenge, and states are competing for the chance to attract semiconductor business. Large manufacturers are looking for states that provide the best incentives and infrastructure.
What follows is an examination of this challenge and opportunity to reshore the chip-making sector, why it exists, and how it can be solved. This report was produced using data from Eightfold AI’s Talent Intelligence Platform, a deep-learning platform powered by the largest global talent dataset. More information can also be found in the supporting slides: “Reshoring Semiconductor Manufacturing.”
Essential components and a growing industry
Semiconductors are essential components for many critical and growing industries. The share of semiconductors is 32 percent in the PC/computer industry, which includes tables, laptops, and computers. In the communications industry, which includes phones, switches/routers, cable, and optical network infrastructure, the semiconductor market share is 31 percent.
These industries will continue to grow rapidly over the next five years.
Given the strategic importance of semiconductors, much has been said about the need to reduce dependency on extended supply chains and onshore semiconductor manufacturing. Indeed, a disruption in the availability of these services threatens the global economy and national security. Pending legislation would provide funding to aid in developing new chip fabrication facilities in the U.S. to supply critical applications. However, an Eightfold analysis reveals a critical issue that must be addressed: a substantial skills shortage to fill the positions those plants would require.
The U.S. share of semiconductor manufacturing
The current supply chain for semiconductors is spread around the globe. A chip could be designed in the U.S., based on customer requirements. Equipment may be manufactured in the U.S., Europe, or Japan. Silicon may be processed and sliced into wafers in Japan. In Taiwan, manufacturers imprint the wafers with patterns.
The wafers could be sliced and packaged into chips in Malaysia. Then, the chips could be sent to assembly facilities in China. The end product could then be sent back to the U.S. for sale.
Southeast Asia has about 75 percent of the current global wafer fabrication capacity; Taiwan, Korea, China, and Japan together have more than 70 percent of the market. The U.S. share has been decreasing, now at just 12 percent of the global capacity, versus its 37 per share in 1990.
