The technological boom and globalization have allowed millions of consumers to be interconnected to one another, and the connecting dot that allowed it to happen is through tech devices like phones and computers.
Semiconductor chips play a major part in its functionality and in making the entire product come alive. However, to meet the high demand of consumerism, more chips are required, but there’s a hurdle to it.
Deloitte, in 2022, predicted through in-depth analysis that the semiconductor industry needs to hire one million skilled workers by 2030 to meet the high demand for chip production. To reach the mark of one million skilled workers, the global industry needs to add around 100,000 skilled per annum. However, in 2024, the prediction still holds, as there aren’t enough skilled workers to meet the goal by 2023. The lack of qualified workers has become concerning because the industry is projecting $1 trillion in revenue growth by 2030, according to the Deloitte report.
The researchers pointed out that the furiousness in the unprecedented increase in chip demand is largely due to Generative AI. Since the domain of GenAI requires highly skilled workers who have mastered their craft, there aren’t many. But what makes the findings of reports so intriguing is the fact that the US is now considering limiting the sales of AMD and Nvidia AI chips abroad to match the national demand.
A major reason for the shortage of skilled workers is cyclical chips, which have now gone through their seventh downturn since the 1990s. The revenue for the cyclical chips is to decline to $520 billion in 2023 by 9%, and due to this, the development of a new skilled workforce is extended. At the same time, to avoid these crises and prevent further decline in revenue, short-term talent is required for the cyclical chip industry rescue, thus resulting in immediate short-term need for workers.
Generative AI Pushing the Frontiers of Advanced Skilled Labor
Among the chip manufacturing industry, Generative AI chips are at the highest peak of intellectual capacity and skills required to produce them on a large scale. In the generative AI for Semi concoctors survey by Deloitte’s 2023 Smart Manufacturing report, about 72% of the industry-leading figures say that the semiconductor industry will be highly transformative because of GenAI’s impact.
Workforce Challenges in the Semiconductor Industry
After seeing the surging demand and realizing how much revenue the chip industry can make, the semiconductor industry is finally realizing that attracting new talent is more important than ever. However, it still forms a great challenge for companies, especially in terms of diversity in the workforce. Currently, in the U.S. semiconductor industry, one-third of the world force includes females and less than 6% are African Americans.
For the US, the employee age in the semiconductor industry is towards the higher end as 55% of the industry workforce is 45 or older, and the employees under the age of 31 are only 25%. Whereas in Europe, only 20% of the employees in the entire industry are 55 or older, with Germany being the only exception as the workforce that is going to retire in the next decade is 30%.
The Global shortage
It’s not just the U.S. that is facing a shortage of workers for the semiconductor industry; the lack of workers is on a global stage. The biggest problem is that the industry can’t use the current and limited workforce to expand the industry with more advancing technological shifts.
In the U.S. alone, the yearly graduates with master’s in semiconductor and engineering fields are not natives, and out of those foreigners, 80% don’t stand in the US after their graduation.
Even India is facing a major deficit of skilled labor as it is predicted that the Indian semiconductor industry will lose from 250,000 to 300,00 professionals. For Europe to sustain its industry and achieve its revenue growth goal by 2023, it needs to add 400,000 more workers.
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