The US Semiconductor Industry Faces Labor Shortage Amidst Booming Production
The US semiconductor industry is experiencing a significant boost in production following the passage of the CHIPS Act. However, this progress may be hindered by a severe labor shortage in the industry. A report by the Semiconductor Industry Association and Oxford Economics predicts that there will be 85,000 new technical jobs in the industry by 2030, but approximately 80% of these jobs are expected to go unfilled. Compounding the issue, one-third of the semiconductor industry workforce is foreign-born, exacerbating the shortage due to immigration hurdles.
Taiwan’s TSMC, which planned to open its first plant in Arizona in 2024, announced a delay of one year due to a shortage of specialist workers. The company’s chairman, Mark Liu, stated that efforts were being made to address the situation by sending experienced technicians from Taiwan to train local skilled workers, but the production schedule for N4 process technology is now pushed out to 2025. In 2021, the US semiconductor industry workforce consisted of 33% foreign-born individuals.
The challenge lies in the limited ability of skilled foreign workers to stay in the US due to current immigration laws. Todd Schulte, president of immigration and criminal justice reform advocacy organization FWD.us, emphasized the importance of reforming immigration laws to build a sustainable semiconductor industry. An analysis by FWD.us revealed that about 5,000 international students will graduate in the next academic year with advanced degrees in semiconductor-related computer science and engineering fields, and a significant portion of them are interested in staying in the US. Without a reformed immigration system, the ability to attract and retain the necessary workforce for building semiconductor fabs may be compromised.
Work authorization is one of the key challenges faced by foreign-born skilled workers. The H-1B visa, which allows qualified individuals to work in the US, has a limited annual cap of around 65,000 slots, with an additional 20,000 for those with master’s degrees. This cap has not been increased since 2006. Other hurdles include slow processing times, regulations, paperwork, and the cost of sponsoring a visa. A report by Envoy Global found that 94% of companies would be willing to sponsor foreign nationals for work visas with fewer challenges, while 80% of companies have relocated employees outside the US due to visa-related issues.
An overhaul of the US immigration system is not only crucial for the semiconductor industry but also for the overall US economy. Immigrants in the US paid over $330.7 billion in federal income taxes and over $492 billion in total taxes in 2019. The US population has been growing over the past decade primarily due to immigration, while many developed countries face population decline and aging populations. Relaxing immigration policies is becoming increasingly necessary to address the labor gap and demographic challenges in the US.
The semiconductor industry, which has seen significant investments following the passage of the CHIPS Act, must also focus on talent retention. Without an updated immigration system, the US may struggle to attract top talent from around the world. Other economic competitors have already modernized their immigration laws to compete with the US. It is crucial for the US to design an immigration system that allows it to lead in education and innovation in fields like artificial intelligence, biomedical research, clean energy, and the decarbonized economy. Building a qualified and diverse workforce is crucial for the country’s future success.
