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.
Find in this white paper:
- Why this challenge was created
- How the U.S. can reshore chip-making
- How skills needs are changing in the industry
- The use of “adjacent skills” to address the semiconductor skills shortage
Why the US Should Reshore the Semiconductor Industry by Upskilling and Reskilling Talent
Semiconductors are essential, and part of multiple growing industries.
The market share of semiconductors in the PC/computer industry, which includes tables, laptops, and computers, is 32 percent. In the communications industry, which includes phones, switches/routers, cable, and optical network infrastructure, the semiconductor market share is 31 percent. And 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, there is a substantial skills shortage to fill the positions those plants would require, making upskilling and reskilling talent a viable solution.
To-date, the US share of semiconductor manufacturing has steadily decreased, presenting a significant and necessary opportunity.
The current supply chain for semiconductors is spread around the globe, making it fragile. 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.
As far as market breakdown, 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.
The US can successfully increase its market share with a multi-faceted approach.
To meet the capacity needs for critical semiconductor applications, the U.S. needs to add about 5.5 percent of the global production. This equates to about 18 to 20 fabs, and about 70-90,000 total fabs jobs. Rising to meet this opportunity would require the U.S. to increase its current workforce by about 50 percent. If the U.S. were to not just handle critical needs but become self-sufficient, almost 20 percent of the global production would need to be added. That would mean 74-80 fabs required and 300,000 total fabs jobs.
The U.S. should focus on critical needs first, with self-sufficiency as a second phase. This can be done successfully through a multi-pronged approach, including:
1. Policy interventions such as land subsidies to incent manufacturers and speed up the development and operationalization of fab plants.
2. Fabrication plants designed and built with the future in mind, not only to become self-reliant and sufficient but also to reinvent those plants.
3. Talent investments to run the newly built plants.
How Upskilling Talent, Reskilling Talent, and Talent Management will Make Reshoring the Semiconductor Industry Successful
Three major talent groups are needed to run a fabrication plant:
1. Production Engineering: Designs, runs, tests, and upgrades systems and processes. Key roles include Process Engineers, Integration Engineers, Yield Engineers, and Quality Engineers.
2. Logistics and Support: Procures material, maintains facilities, and supports corporate services. Key roles include Procurement Specialist, Category Supply Manager, and Logistics Specialist.
3. Production Operations: Runs, monitors, and troubleshoots production equipment. Key roles include Manufacturing Technician, Equipment Technician, and Manufacturing Supervisor.
There is an increasing need for new skills and capabilities. The majority of the Production Engineering roles are gaining in prevalence. Meanwhile, about 60 percent of the top Production Operations roles, such as technician roles, manufacturing, equipment, and electronic technicians, are declining, likely due to automation.
Similarly, most of the Production Operations skills (not just roles) are declining in prevalence. Troubleshooting skills are decreasing sharply in prevalence, and Failure Analysis, Statistical Process Control, Lean Manufacturing, Metrology, and Six Sigma are declining, as well.
Even the skill mix of some of the rising and stable roles is changing. Reliability Engineers, for example, are not declining in relevance. But the skills that comprise that role are changing. In 2010, skills such as Scanning Electron Microscopy and ANSYS were among the rising skills not at the top of the relevance list a decade later. In 2020, Python is among the rising skills not as high on the 2010 list.
Upskilling Talent and Reskilling Talent is part of the equation to solving the skill decline.
Within each set of roles (e.g. Production Engineering), the process of upskilling and reskilling talent begins by identifying said skills. From there, adjacent skills are identified and used to upskill people with the declining skills and arm them with rising skills. Consider individuals, for example, with Production Operations roles, who have Lean Manufacturing skills. Such skills are adjacent to Continuous Improvement, which is a strong rising skill in Production Operations. These individuals could be upskilled/reskilled.
Upskilling also helps link the career paths of declining and rising roles. This begins with identifying the alternative career paths that declining roles can transition into by evaluating the extent of skills adjacencies. Then, we can transition the workforce from these roles into alternate career paths.
Take, for example, Manufacturing Technicians, which is a declining role. These technicians could transition into Reliability Engineer roles, as there is a high degree of skills overlap. Some skills, such as Six Sigma, are prevalent in both the Manufacturing Technician and Reliability Engineer roles. Other skills are related, such as Lean Manufacturing, a skill common in the declining Manufacturing Technician role, and Continuous Improvement, a skill common in the rising Reliability Engineer role.
By examining adjacent skills, and seeing how people can be upskilled and reskilled into new but similar roles, we can enable hiring for potential. This results in a much larger talent pool. There may, for example, be only two million individuals with supply chain management skills, but 6.5 million with the potential to learn such skills. Only 1.2 million may have Matlab skills, but another 1.3 million have the potential to learn the skills.
The Semiconductor Industry Can Be Successfully Reshored
We must not ignore the talent needed to make various policy changes come to fruition. By upskilling talent and reskilling talent, we identify individuals with the potential to move from declining roles to rising roles. This can dramatically increase the pool of potential semiconductor talent, and help reshore the industry. Learn more about how this talent infusion and transformation can be accomplished by reaching out to the team of experts at Eightfold AI.