4500 Fab Jobs Could Go Unfilled in U.S. by 2030

In 2022, the CHIPS Act pledged $39 billion of U.S. federal government subsidies to build semiconductor manufacturing facilities. Not all the funding has been allocated, but the Act has already catalyzed at least $300 billion in private investment.

As a result, U.S. fab capacity could triple between 2022 and 2032. If this relatively rapid buildup pans out, it will mark U.S. semiconductor manufacturing’s first meaningful expansion since the 1980s — and place considerable strain on a workforce that is already suffering attrition.

According to a recently published report by the consultancy, McKinsey & Company, new and improved fabs alone will require 48,000 new technician and engineering jobs by 2030. But as the workforce is progressing now, only 43,500 of those will be filled.

McKinsey is not alone in raising the alarm. A 2023 report from the Semiconductor Industry Association and economic forecasting agency Oxford Economics anticipated that the U.S. semiconductor industry—both in fabs and on the design side—will fail to fill 67,000 technical or engineering jobs by 2030.

Workforce development

Building fabs needs specialized knowledge of construction, cleanrooms, and industry-specific safety standards. Semiconductor manufacturer workers come in three major categories, according to McKinsey. Constructing a fab in the first place relies on skilled craft laborers: welders, electricians, carpenters, pipefitters and the like. Operating a completed fab needs both trained technicians and qualified engineers.

“Each of those come from very distinct labor pools,” says Taylor Roundtree, an associate partner at McKinsey. “All of them are feeling shortages, but the extent of the shortages are very different, and the causes of those shortages are very different.”

In 2023, 53 percent of semiconductor employees were at least somewhat likely to resign their posts in the following half year

Semiconductor firms must attract craft laborers from a common pool of tradespeople. Today, those tradespeople are in high demand—not just from semiconductor fabs but from a host of other construction projects boosted by U.S. government stimulus spending over the past few years.

TSMC’s facility in Arizona, which has experienced delays thanks to a litany of problems ranging from union disputes to culture clashes, is a microcosm of this tradesperson bottleneck. Not only must TSMC compete for welders and pipefitters with a nearby Intel facility, it must also compete with at least a dozen other major projects all attempting to build new factories in and around Phoenix.

As fabs like TSMC’s reach completion, they will need to hire technicians and engineers. Finding enough of both will not be easy. The industry must compete for technicians with other cleanroom-oriented industries: biotech, for example, or aerospace. Engineers may have more fab-specific knowledge, but minting new engineers—who typically need a bachelors degree, if not more—takes the longest of all three categories.

Furthermore, there is reason to believe that the technical and engineering workforces are experiencing growing attrition. A 2023 McKinsey survey found that 53 percent of “semiconductor employees” were at least somewhat likely to resign their posts in the following half year — up from 40 percent in 2021.

The CHIPS Act era fabs are still under construction, but some of their operators have begun to simulate what running them will look like with the current workforce—and they don’t always like what they find. “I think there’s this view that now is the time to be paranoid, a bit, on our execution capability,” says Wade Toller, a senior advisor at McKinsey.To make the most of the new fabs, then, the U.S. semiconductor workforce must grow.

A global shortage

Some analysts believe that loosening U.S. immigration barriers for, say, overseas engineers who complete degrees at U.S. universities may be one solution to the shortage. But the semiconductor worker bottleneck is a global one: Taiwan and South Korea both face a dearth of semiconductor-related engineering graduates, another McKinsey report from earlier this year found technician and engineering shortfalls in both Europe and the Asia-Pacific region.

“It’s not as if there is a huge surplus of semiconductor engineering talent in certain regions that the U.S. just needs to import,” Roundtree says.

The industry and its government funders are aware of the problem. On top of its direct subsidies, the CHIPS Act contains support for numerous public-private partnerships and training programs: scholarships, apprenticeships, community college technician training, professional retraining schemes, and more.

But Toller believes that even more effort on the part of both industry and the public sector is necessary to make semiconductor manufacturers more attractive employers for craft laborers, technicians, and engineers alike. “I think we have to, as an industry, push for an even higher level of readiness,” he says.