In recent years, multiple industrially developed regions around the world have been facing a shortage of semiconductor talent. Among them, the talent situation in the United States, China, and South Korea is the most urgent, but the reasons and conditions for talent shortages in these three regions are quite different.
The United States used to be a hub for semiconductor talent, but it focused heavily on design. Due to the need to vigorously develop chip manufacturing in recent years, the US has suddenly experienced a shortage of semiconductor manufacturing talent. China is facing a different situation; it lacks talent across various aspects of the semiconductor industry chain, particularly in manufacturing, where the shortage is severe.
South Korea, a strong nation in semiconductor manufacturing, originally did not lack corresponding talent. However, in recent years, the situation has taken a sharp turn. Due to the frantic development of the chip manufacturing industry in other regions, it has not been possible to quickly train the required number of talents, leading to poaching of personnel, making South Korea a major victim. Currently, the shortage of semiconductor talent in South Korea is becoming increasingly severe.
1. Samsung and SK Hynix are the hardest hit
Not only in chip manufacturing, but in the past two years, AI servers have become globally popular. These high-performance computing systems have high requirements for processors and memory (DRAM). Compared with traditional data centers, AI systems require closer integration between processors and memory, placing higher demands on the design, manufacturing, and packaging technologies that combine the two. In this regard, South Korean memory giants have a significant advantage. Based on this, their employees have become primary targets for poaching by major AI chip and system companies.
According to a report by Chosun Ilbo, based on LinkedIn data as of June 18 this year, 515 new employees at Nvidia came from Samsung Electronics, whereas only 278 new employees at Samsung came from Nvidia. Considering the total number of employees at both companies highlights Samsung’s talent drain predicament. Samsung’s semiconductor division has about 74,000 employees, while Nvidia has about 30,000. This means that only 0.4% of Samsung’s semiconductor employees came from Nvidia, while 1.7% of Nvidia’s employees came from Samsung.
However, Samsung successfully poached 1,138 people from Intel, more than the 848 people Intel poached from Samsung. Recently, 195 TSMC employees joined Samsung, while only 24 Samsung employees moved to TSMC.
Recently, 38 SK Hynix employees joined Nvidia, but the former has not managed to poach even one person from Nvidia.
Although SK Hynix’s high-bandwidth memory (HBM) manufacturing technology is ahead of Samsung, it is at a disadvantage in this talent war. In addition to losing talent to Nvidia, 111 employees also joined Micron, while only 8 people were poached from Micron.
Overall, South Korea’s semiconductor talent output is high, while its input is low.
2. Urgency is growing in South Korea
According to a labor market report for the semiconductor industry published by the South Korean Ministry of Education in 2022, by 2031, the country’s semiconductor industry will face a labor shortage of 56,000 people. In 2022, this number was 1,784, meaning the gap will expand 30 times in 10 years.
Industry insiders say that despite efforts by South Korean semiconductor giants to strengthen security measures and bind talent through non-compete agreements, foreign companies’ attempts to recruit professionals and steal advanced technologies from Korean companies are increasing and difficult to curb.
An engineer from SK Hynix joined Micron. This engineer was responsible for chip design work for DRAM and HBM memory at SK Hynix. After retiring from the Korean company, he joined Micron in July 2022. Despite an agreement with SK Hynix not to work for a competitor within two years of his retirement, he still went to Micron.
In August 2023, SK Hynix filed a lawsuit against this engineer to prevent him from working for the competitor. The local court ruled that this former employee could not work for Micron before the non-compete agreement period ended, and if he violated the ruling, he must pay SK Hynix 10 million won (7,637 USD) per day.
However, it took about seven months for the court to make a decision. In the highly competitive HBM market, SK Hynix competes with Samsung and Micron for market dominance, and the technical gap is only a few months.
“The engineer who joined Micron was a key figure in HBM development. Most technical leaks occur during job changes. Although the law cannot solve all problems, it is necessary to emphasize that if semiconductor technology belonging to national industrial secrets is leaked, severe punishment will follow,” said Professor Lee Jong-hwan of the Department of System Semiconductor Engineering at Sungkyunkwan University.
According to data from the Ministry of Trade, Industry and Energy of South Korea, the number of cases involving cross-border leakage of industrial technology increased from 14 in 2019 to 23 in 2023. During the same period, chip-related cases increased from 3 to 15, highlighting the seriousness of technology leaks in the semiconductor industry.
“Recruiting professionals from competitor companies is the best way to quickly close the technology gap. The government needs to work with companies to strengthen the management of these engineers,” said Professor Lee Jong-hwan.
Currently, the South Korean government is actively increasing penalties to prevent the leakage of national core technologies. The National Assembly proposed a bill to increase penalties, and in November 2023, the Trade, Industry and Energy Committee approved an amendment to the Industrial Technology Protection Act, which strengthens the punishment for leaking national core technologies.
Kim Dae-jong, a professor of business administration at Sejong University, stated that South Korean companies need to work hard to improve engineers’ treatment, optimize core employees’ salaries to enhance job satisfaction, and implement systems that can extend career longevity.
In South Korea, many foreign companies are also competing with local semiconductor companies like Samsung and SK Hynix for talent.
In June 2023, the American semiconductor equipment company Lam Research held a “Lam Research Tech Academy” in South Korea for third- and fourth-year university students. The course was practical, teaching students semiconductor processes, equipment principles, and practical exercises. The company initiated this program to attract talent. Since opening a research and development center in Yongin, Gyeonggi Province, in April 2022, Lam Research has been increasing its recruitment of employees.
Lam Research’s direct involvement in talent cultivation is due to the increasingly fierce competition for talent among global semiconductor companies entering South Korea in recent years. As global semiconductor equipment companies increase their investment in South Korea, the demand for human resources exceeds supply. Large companies like Applied Materials, ASML, Lam Research, and Tokyo Electron (TEL) have established or expanded R&D centers in South Korea. ASML plans to double the size of its South Korean subsidiary within ten years, which currently has about 2,000 employees.
In addition to continuous poaching, the domestic situation for cultivating semiconductor talent in South Korea is not optimistic.
“One of the many reasons for the shortage of semiconductor labor is that a large number of students choose to go into the medical field,” said a semiconductor industry insider. “Compared to the interest in medical schools in our society, the lack of interest in the semiconductor industry, which has a significant impact on the national economy, is quite strange.” Because it is not as popular as medicine, dentistry, and pharmacy, semiconductor courses have to offer more scholarships and guarantee employment after graduation.
Kim, an 18-year-old student at a school in Seoul, considered taking semiconductor courses but ultimately applied to and was accepted by the School of Electrical Engineering at Korea University. He said, “Although I am interested in the job security offered by Samsung Electronics or SK Hynix, I hesitated because the program was designed to meet industrial labor needs.” This shows that young people are not very interested in working in wafer fabs, and some are even resistant.
3. The U.S. is looking for ways to grab people
In 2023, the U.S. SIA released a report specifically analyzing the semiconductor talent shortage. By 2030, the number of U.S.-based semiconductor workers will increase by about 115,000, with about 345,000 related jobs in 2022, increasing to 460,000 by the end of 2023, a 33% increase. Based on current college talent completion rates, it is estimated that approximately 67,000 of these new jobs will be at risk of being unavailable, which represents 58% of the projected new jobs. Thirty-nine percent of the shortage will be skilled workers, 35 percent will be engineers with four-year bachelor’s degrees, and 26 percent will be master’s- or doctoral-level engineers.
The typical case of the shortage of semiconductor talent in the United States, especially chip manufacturing talent is TSMC’s 4nm process fab in Arizona under construction. At the end of 2023, TSMC said that because of the severe shortage of skilled workers and the difficulty of solving the problem in the U.S. mainland in the short term, this fab, which was originally scheduled to be mass-produced in 2024, the mass production time has been postponed to 2026.
Not only TSMC, there are more and more semiconductor manufacturers are building semiconductor factories in Arizona or other states, the shortage of talent is becoming more and more prominent.
The surge in hiring in the U.S. during the global chip shortage in 2021 and 2022 coincided with the U.S. government’s passage of the Chip and Science Act in 2022, which encourages companies to invest in semiconductor manufacturing in the U.S. Since early 2023, the shortage of mature process chips has eased significantly, but employment in their manufacturing has not declined.
According to the U.S. Bureau of Labor Statistics (BLS), the median annual wage in semiconductor and other electronic component manufacturing exceeds the median annual wage in manufacturing as a whole and in several other comparable industries, and the median wage for these jobs is nearly double that of retail.
Looking ahead, hiring for U.S.-based semiconductor manufacturing talent will continue to be strong. The Chip and Science Act provides $39 billion in direct incentives for domestic semiconductor manufacturing investment, with federal incentives designed to support investment across the semiconductor ecosystem. Since 2022, the industry has announced more than $200 billion for chip manufacturing, with investments in categories ranging from analog chips and cutting-edge logic chips to semiconductor materials such as specialty chemicals and silicon wafers upstream in the chain.
As U.S. federal dollars flow to semiconductor manufacturers, the Chip and Science Act will drive more private sector investment, which will drive continued growth in advanced semiconductor manufacturing jobs.
In order to obtain and attract more semiconductor manufacturing talent from abroad, the U.S. is also considering changes to immigration laws.
The H-1B visa system is the main way to bring in international talent to the U.S. semiconductor industry, however, this company-sponsored visa is valid for three years and can be extended for up to six years, which is a challenge for workers from populous countries such as India and China due to the 7% cap on each country’s visa quota, which is allocated through a lottery system.
Upon expiration of the visa, the foreign worker is required to obtain a green card for permanent residence, and while it is possible to stay indefinitely while waiting to obtain a green card through an i-140 petition, this situation leaves many skilled workers in a state of uncertainty, without the rights conferred by a green card or citizenship, and may discourage potential talent from considering the U.S. as a long-term career destination.
It is evident that the H-1B visa system is not conducive to the introduction and retention of talented semiconductor workers, and therefore the U.S. chip industry is calling on the government to revise the system.
The U.S. semiconductor industry and the Economic Innovation Group (EIG) have proposed a new type of visa specifically for the semiconductor industry – the chipmaker visa. The proposal aims to provide a streamlined process for recruiting talent for specific industries.
If the U.S. government follows the EIG’s proposal, it would issue 2,500 visas per quarter, totaling 10,000 per year.
One advantage of the chipmaker visas is that they can be renewed once, for five years for foreign workers, and then renewed for another five years, so that by the time those 10 years are up, there may be more domestic talent available. the EIG says that this “longer term” gives U.S. semiconductor companies time to expand.
In the United States, a large proportion of engineering graduate students from abroad, once graduated, due to visa issues, it is not easy to stay in the United States, which will exacerbate the shortage of skilled workers in the industry.
To address these issues, give H-1B visa holders more time to find a job (right now they have 60 days to find a job or leave) and make it easier for U.S. college graduates to stay and work.
In November 2023, Senators Hickenlooper and Cramer introduced the EAGLE Act, which would raise the 7 percent visa cap per country to 15 percent and make other changes to allow more talent into the United States.
4. China needs more semiconductor talent
In recent years, with the rapid development of China’s IC industry, the talent pool has been growing from 400,000 in 2017 to 602,000 in 2022. However, the proportion of junior personnel is the largest, accounting for 44.41%, intermediate personnel account for 36.48%, senior personnel account for 16.01%, and special personnel account for 3.1%.
The survey shows that in 2020, the Chinese mainland semiconductor employees about 541,000 people, the scale of demand in 2023 is about 766,500 people, even if the annual university graduates of semiconductor-related majors, 30,000 people into the industry employment, the talent gap is still more than 100,000 people.
Mainland China’s semiconductor talent shortage is all-encompassing, from the upstream of the industry chain of semiconductor materials, equipment, EDA tools, IP, to the middle and lower reaches of the chip design and manufacturing, there is a shortage of people, and the greatest demand is the chip manufacturing industry.
There are only two ways to get talents: cultivate yourself and external poaching. Own training is a long-term measure, short-term is difficult to see the effect, and high salary poaching is the solution to the immediate problem of no choice.
In recent years, mainland China has been recruiting senior engineers and skilled workers from other countries and regions at high salaries.
However, high-pay digging still can not completely solve the problem of semiconductor manufacturing, because it is a very complex systems engineering, just the general process has 400 procedures, a 12-inch fab at every turn will require nearly 2,000 engineers, even from the world’s most advanced fab digging away from 50 engineers, that has been a remarkable thing, but this is for the 2,000 engineers. However, this is still a drop in the bucket for 2,000 engineers. Therefore, to take various effective measures to adhere to the long-term training of local engineers and skilled workers is the king.
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