In recent years, there has been a global shortage of semiconductor talent in many developed industrial regions. Relatively speaking, the situation is most urgent in the United States, China, and South Korea, but the reasons and conditions for the talent shortage in these three major areas are quite different.
The United States was originally a hub for semiconductor talent, but it focused more on design. In recent years, with the vigorous development of chip manufacturing, the United States has suddenly faced a shortage of semiconductor manufacturing talent. China is another case, where there is a shortage of talent in all aspects of the semiconductor industry chain, especially in manufacturing, which is severely lacking.
South Korea is a powerhouse in semiconductor manufacturing and did not originally lack the corresponding talent. However, in recent years, the situation has taken a sharp turn for the worse. Due to the rapid development of the chip manufacturing industry in other parts of the world, the required number of talents cannot be cultivated in the short term, and they can only resort to poaching. At this time, South Korea has become a severely affected area. Currently, the shortage of semiconductor talent in South Korea is becoming increasingly serious.
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Samsung and SK Hynix are severely affected areas
Not only in chip manufacturing, but also in the past two years, AI servers have become popular worldwide. These high-performance computing systems have high requirements for processors and memory (DRAM), and compared with traditional data centers, AI systems require processors and memory to be more closely connected. This has raised higher requirements for the design, manufacturing, and packaging technology and processes that combine the two. In this regard, South Korean memory manufacturers have a significant advantage. Based on this, their employees have become the main targets for poaching by AI chip and system manufacturers.
According to a report in the South Korean Chosun Ilbo, based on data from LinkedIn as of June 18th this year, NVIDIA has 515 new employees who have switched from Samsung Electronics, while Samsung only has 278 new employees from NVIDIA. Considering the total number of employees of both companies, it highlights the embarrassing situation of talent outflow from Samsung. Samsung's semiconductor employee total is about 74,000, while NVIDIA's total is about 30,000. That is to say, only 0.4% of Samsung's semiconductor employees come from NVIDIA, while 1.7% of NVIDIA's employees come from Samsung.
However, Samsung successfully poached 1,138 people from Intel, more than the 848 people Intel poached from Samsung. Recently, 195 TSMC employees switched to Samsung, while only 24 Samsung employees switched to TSMC.
Recently, 38 employees of SK Hynix switched to NVIDIA, but the former did not successfully poach a single person from NVIDIA.Although SK Hynix's high-bandwidth memory (HBM) manufacturing technology leads Samsung, it is at a disadvantage in this talent war. In addition to being poached by NVIDIA, it has also seen 111 employees jump ship to Micron, but has only lured 8 people from Micron.
Overall, South Korea has a net outflow of semiconductor talent.
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A sense of urgency is growing in South Korea
According to a semiconductor industry labor market report released by the 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, and in 10 years, the gap will expand 30 times.
Industry insiders say that despite the efforts of major South Korean semiconductor companies to strengthen security measures and restrict talent through non-compete agreements, the attempts by foreign companies to recruit professionals and poach advanced technologies from South Korean companies continue to increase, and the momentum is difficult to curb.
An engineer from SK Hynix jumped ship to Micron. This engineer was once responsible for chip design of DRAM and HBM memory at SK Hynix. After retiring from this South Korean company, he joined Micron in July 2022. Although he reached an agreement with SK Hynix that he would not work for a competitor within two years after retirement, he still went to Micron.
SK Hynix filed a lawsuit against this engineer in August 2023 to prevent him from working for a competitor. The local court ruled that this former employee could not work for Micron before the non-compete agreement stipulated, and if he violated the ruling, he must pay SK Hynix 10 million won ($7,637) per day.
However, it took the court about 7 months to make a decision. In the fiercely competitive HBM market, SK Hynix is competing with Samsung and Micron for market dominance, and the gap in technological differences is only a few months.
"The engineers who joined Micron are key figures in the development of HBM. Technology leaks mostly occur during the transition process. Although the law cannot solve all problems, it is necessary to emphasize that if semiconductor technology that belongs to the national industrial secrets is leaked, it will be severely punished," said Professor Lee Jong-hwan of the Department of System Semiconductor Engineering at Sunmoon University.According to data from the Ministry of Trade, Industry, and Energy in South Korea, the number of cases involving the cross-border leakage of industrial technology increased from 14 in 2019 to 23 in 2023. During the same period, the number of chip-related cases rose from 3 to 15. This highlights the severity of technology leakage in the semiconductor industry.
"Hiring professionals from competing companies is the best way to quickly bridge the technological gap. The government needs to cooperate 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 core national technologies. The parliament has proposed a bill to intensify penalties. In November 2023, the Trade, Industry, and Energy Committee approved an amendment to the Industrial Technology Protection Act, which strengthens the punishment for the leakage of core national technologies.
Kim Dae-jong, a professor of business administration at Sejong University, said that South Korean companies need to work hard to improve the treatment of engineers. Companies should optimize the compensation of core employees to increase job satisfaction and implement systems that can extend professional lifespans.
In South Korea, several foreign companies are also competing for talent with local semiconductor companies such as Samsung and SK Hynix.
The American semiconductor equipment company Lam Research (Panlin Group) held the "Lam Research Tech Academy" for junior and senior students in South Korea in June 2023. The course was conducted in a practical manner, where students learned the principles of semiconductor processes and equipment and practiced them. The company's purpose in carrying out this plan is to attract talent. Since opening an R&D center in Yongin, Gyeonggi Province, in April 2022, Panlin Group has been increasing employee recruitment.
The reason why Panlin Group is directly involved in talent cultivation is that the talent competition among global semiconductor companies entering South Korea in recent years has become increasingly fierce. As global semiconductor equipment companies increase their investment in South Korea, human resources are in short supply. Major companies such as Applied Materials, ASML, Panlin Group, and Tokyo Electron (TEL) have all established or expanded R&D centers in South Korea. ASML plans to double the size of its South Korean subsidiary within 10 years, currently employing about 2,000 people.
In addition to the continuous poaching of talent, the situation of cultivating semiconductor talent in South Korea is not optimistic.
"A large number of students choosing to go to the medical department is one of the many reasons for the shortage of semiconductor labor," said a semiconductor industry insider: "Compared with our society's interest in medical schools, it is quite strange that the semiconductor industry, which has a huge impact on the national economy, is not interested." Due to the lack of popularity compared to medicine, dentistry, and pharmacy, semiconductor courses have to offer more scholarships and guarantee employment after graduation.
Kim, an 18-year-old student from a school in Seoul, considered attending a semiconductor course but ultimately applied and was admitted to the School of Electrical Engineering at Korea University. He said, "Although I am interested in the job security of Samsung Electronics or SK Hynix, I hesitated because the program was established to meet the needs of industrial manpower." It can be seen that young people are not very interested in the work of wafer factories and even have some resistance.The United States is doing everything it can to attract talent.
In 2023, the U.S. SIA released a report specifically analyzing the shortage of semiconductor talent. By 2030, the number of semiconductor professionals in the United States is expected to increase by about 115,000. In 2022, there were approximately 345,000 related jobs, and by the end of 2023, this number is expected to increase to 460,000, a growth of 33%. Based on the current completion rate of talent training in colleges and universities, it is estimated that about 67,000 of these new jobs will face the risk of being vacant, accounting for 58% of the expected new jobs. Among the shortage of personnel, 39% will be technical workers, 35% will be engineers with a bachelor's degree, and 26% will be engineers with a master's or doctoral degree.
A typical case of the shortage of U.S. semiconductor talent, especially chip manufacturing talent, is TSMC's under-construction 4nm process wafer factory in Arizona. At the end of 2023, TSMC stated that due to a severe shortage of technical workers, which is difficult to solve in the short term in the United States, the mass production time of this wafer factory, originally scheduled for 2024, has been postponed to 2026.
It's not just TSMC; more and more semiconductor manufacturers are building semiconductor factories in Arizona or other states, and the talent shortage issue is becoming more prominent.
During the global chip shortage in 2021 and 2022, the number of recruitments in the United States surged, coinciding with the U.S. government's passage of the CHIPS and Science Act in 2022. This act encourages companies to invest in semiconductor manufacturing in the United States. Since the beginning of 2023, the shortage of mature process chips has been significantly alleviated, but the number of people employed in its manufacturing industry has not decreased.
According to data from the U.S. Bureau of Labor Statistics, the median annual wage for the semiconductor and other electronic component manufacturing industry exceeds the median annual wage for the entire manufacturing industry and several comparable industries. The median wage for these jobs is almost twice that of the retail industry.
Looking ahead, the recruitment of semiconductor manufacturing talent in the United States will continue to be strong. The CHIPS and Science Act stipulates $39 billion in direct incentives for domestic semiconductor manufacturing investment, and federal incentive measures aim to support investment in the entire semiconductor ecosystem. Since 2022, the industry has announced more than $200 billion for chip manufacturing, including investment categories such as analog chips, cutting-edge logic chips, and upstream semiconductor materials such as specialty chemicals and silicon wafers in the industry chain.
As federal funds flow to semiconductor manufacturers, the CHIPS and Science Act will drive more private sector investment, which will continue to increase advanced semiconductor manufacturing jobs.In order to attract more semiconductor manufacturing talent from abroad, the United States is considering amending immigration laws.
The H-1B visa system is the primary means for the U.S. semiconductor industry to recruit international talent. However, this company-sponsored visa is valid for three years and can be extended up to six years. Due to the visa quota limit of 7% for each country, allocated through a lottery system, this poses a challenge for workers from populous countries such as India and China.
After the visa expires, foreign employees need to obtain a permanent residence green card. Although they can stay indefinitely while waiting for the I-140 application to be approved for the green card, this situation leaves many technical workers in an uncertain state, without the rights granted by a green card or citizenship, and may deter potential talent from considering the United States as a long-term career destination.
It is evident that the H-1B visa system is not conducive to attracting and retaining outstanding semiconductor talent, hence the U.S. chip industry is calling on the government to modify the relevant 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 Chip Manufacturer Visa. The proposal aims to provide a simplified process for talent recruitment in specific industries.
If the U.S. government follows EIG's proposal, it will issue 2,500 visas per quarter, totaling 10,000 per year.
One advantage of the Chip Manufacturer Visa is that it can be renewed once, allowing foreign workers to use it for five years, and then renew for another five years. After these ten years, there may be more domestic talent available. EIG stated that this "longer term" gives U.S. semiconductor companies time to scale up.
In the United States, a large proportion of engineering graduate students come from abroad. Once they graduate, it is not easy to stay in the United States due to visa issues, which exacerbates the shortage of technical workers in the industry.
To address these issues, more time should be given for H-1B visa holders to find jobs (currently they have 60 days to find a job or leave), and it should be easier for U.S. university graduates to stay and work.
In November 2023, Senators Hickenlooper and Cramer introduced the EAGLE Act, which would raise the 7% visa cap per country to 15% and make other changes to allow more talent to enter the United States.China Needs More Semiconductor Talent
In recent years, with the rapid development of China's integrated circuit industry, the talent pool has been continuously expanding, increasing from 400,000 people in 2017 to 602,000 people in 2022. However, the majority of these are entry-level personnel, accounting for 44.41%, followed by intermediate personnel at 36.48%, senior personnel at 16.01%, and top-tier personnel at 3.1%.
Surveys indicate that in 2020, there were approximately 541,000 semiconductor industry workers in mainland China, and the demand is projected to reach about 766,500 people by 2023. Even if 30,000 university graduates from semiconductor-related majors enter the industry each year, the talent gap still exceeds 100,000 people.
The shortage of semiconductor talent in mainland China is comprehensive, ranging from upstream semiconductor materials, equipment, EDA tools, and IPs, to downstream chip design and manufacturing, with the greatest demand being in the chip manufacturing sector.
There are only two ways to acquire talent: self-cultivation and external recruitment. Self-cultivation is a long-term measure that is difficult to see results in the short term, while high-salary recruitment is the best choice to solve the immediate problem.
In recent years, mainland China has been recruiting senior engineers and skilled workers from other countries and regions with high salaries.
However, high-salary recruitment still cannot completely solve the semiconductor manufacturing problem, as it is a very complex system engineering task. There are as many as 400 general processes, and a 12-inch wafer factory requires nearly 2,000 engineers. Even if 50 engineers are recruited from the world's most advanced wafer factories, it is already a significant event, but it is still a drop in the bucket compared to the need for 2,000 engineers. Therefore, taking various effective measures and adhering to the long-term cultivation of local engineers and skilled workers is the best approach.
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