Announcing New Blog Series: Workforce Development & SRC


Who Owns the World?

Key points of Blog 1: 

  • Semiconductors are a very education-intensive business, with 56% of the employees at semiconductor companies holding either a bachelor’s or graduate degree 

  • The industry also requires a wealth of STEM talent who do not have university degrees.

  • To sustain growth, companies need many more engineers and scientists than the number of ‘semiconductor’ students who are expected to graduate from U.S. universities in the coming years. We must act, now!

  • Universities alone are not enough. Other scalable talent development mechanisms need to be added to the educational ecosystems.

  • SRC programs prepare 20% of all semiconductor Ph.D. in the United States as a result of a proven collaborative approach.

“Who owns information, owns the world!” – Nathan Mayer Rothschild, 1815

We propose an update to this famous quote to better fit the 2030 workforce crisis: “Who owns semiconductors, owns the world!”  So, what does it take for the U.S. and like-minded nations to own the world?

We are living in a pivotal time when breakthroughs in semiconductor manufacturing define the future of the U.S. and its place in our world - from economic well-being to national security. Fortunately, the United States has recognized this existential moment and is investing billions into semiconductors through the CHIPS and Science Act of 2022, as well as other initiatives. While this is a very positive step in the right direction, money (funding) isn’t everything

One of the very first articles of 2023 from the New York Times explains why: “A severe shortage in skills may undercut the [semiconductor manufacturing] boom, as the complex factories need many more engineers than the number of students who are graduating from U.S. colleges and universities.”(U.S. Pours Money Into Chips, but Even Soaring Spending Has Limits, Jan. 2023)  

Universities alone are not enough

The key to semiconductor growth is the flow of diverse new talent. Herein lies the problem: we are facing a severe talent shortage. The U.S. semiconductor industry currently employs approximately 300,000 people, and by 2030, will need 600,000 skilled workers (NIST Industrial Advisory Committee Report, Dec. 2022), thanks, in part, to a series of significant new U.S. manufacturing investments (SIA Blog, Dec 2022).  However, with the existing workforce development (WFD) ecosystem and pipeline, the data indicate a jobs shortfall of 165K jobs (28%) out of the projected 600K jobs for the U.S. semiconductor industry by 2030.

According to the Semiconductor Industry Association (SIA), the semiconductor industry employs the largest share of workers with college degrees than any other sector, with 56% of the employees at semiconductor companies holding either a bachelor’s or graduate degree (SIA Oxford Economics Report, May 2021).  However, this also highlights the need for non-college-educated students in the industry. The semiconductor industry needs both: it is an education-intensive business and requires STEM talent who do not have university degrees but who have some semiconductor training. This includes individuals with technical skills and aptitude gained through vocational training, apprenticeships, or on-the-job experience.

WFD is an existential issue for the U.S. semiconductor industry. Its executives, board of directors, and investors need to take multiple actions, including real talent development leveraging the very best resources in corporate know-how.

The simple solution would be for universities to scale up the production of semiconductor graduates. However, it is not that simple for a number of reasons:

  • First, the educational cycle is long: typically four years for a bachelor’s degree, another two years to achieve a master’s, and typically four more years for a doctorate, for a total of ten or more years from starting the bachelor's degree to earning a Ph.D. 

  • In addition, retention rates among students studying engineering are among the lowest of all majors. Around 60% of students that study engineering will either drop out or change majors, with 40% doing so in the first year (5 Reasons Why Engineering Students Drop Out).

  • To complicate matters even further, the semiconductor industry needs employees with very sophisticated, constantly changing Knowledge, Skills, and Abilities (KSA), grounded in experience and an understanding of emerging technologies, and the current system of higher education is not well adapted to these rapid changes. 

  • Last but not least, as the capital expenditure associated with newer semiconductor technology grows, widening the industry-academia gap and driving industry-level consolidation, the industry is realizing that deferring the entire workforce development mission to the education system is out of the question and that it cannot be reduced to funding for academia. 

To summarize: universities alone are not enough. Other scalable talent factories need to be added to the educational ecosystems, and the semiconductor industry has to be directly involved in winning the hearts and minds of future innovators in order for the U.S. to remain a global leader in the semiconductor industry.

What’s a Talent Factory?

An example of a scalable talent factory is Semiconductor Research Corporation (SRC): a special entity created by the semiconductor industry for planning and execution of research and workforce development. The “father” of modern semiconductors and founder of SRC, Robert Noyce, recognized the need for a talent factory in 1982, saying, “We need to channel more funds to research and add to the supply and quality of degreed professional people.” 

Today, SRC members include global titans in the semiconductor industry for whom SRC serves as a ‘talent factory,’ supplying hundreds of well-trained graduates each year to equipment and material suppliers, semiconductor fabs, foundries, fabless design and chip makers. Fostering cooperation between industry, academia, and government, SRC directs funding from companies and the U.S. government to universities, earmarked for industry-relevant research and education. In particular, SRC facilitates students’ involvement in SRC-funded projects, and aids at the interface between students and industry (e.g., enabling internships and hires). A multi-disciplinary,  goal-driven approach, like that used in SRC programs, helps to provide education that enriches and prepares each student in ways that the traditional EE/ECE degree does not.

Making an Impact

SRC was involved in the preparation of nearly 20% of all semiconductor-related Ph.D. degrees in 2021 – and this level of support is scalable. While there are more than 1,500 students ranging from undergraduates to graduates in the SRC community, this represents only around 5% of the ideas and people we receive and are able to fund. Unfortunately, without the funding direct to students that want to study semiconductors, these students eventually decide to study other scientific and engineering vectors, such as medicine, biotech, and energy. At this point in time, the U.S. cannot afford to lose semiconductor-related talent. Our industry-led boards have certified that we can increase the number of students SRC supports by 5x or more without any decrease in the merit or industrial relevance to the future of the semiconductor industry and tech innovation in the U.S.

The message of a workforce shortage and the reality of companies laying off large portions of their workforce can be difficult to reconcile, but it is important to remember that every industry goes through downturn cycles and the semiconductor industry is no exception. The near-term outlook for the semiconductor industry is promising, as the demand for semiconductors is expected to continue growing into the future. The global semiconductor market is projected to grow from $573.44 billion in 2022 to $1,380.79 billion by 2029, at a CAGR of 12.2% in the forecast period, 2022-2029 (read more). The U.S. Secretary of Commerce, Gina Raimondo, has emphasized the importance of a "bold domestic investment agenda in strategic and critical sectors" for economic competitiveness and national security. Investing in the development of a skilled workforce in the semiconductor industry is crucial to ensure that the U.S. and other like-minded nations remain competitive in this strategic and critical sector. ( Nov. 2022)

Stay tuned for the rest of the blogs in this six-part series - we’ll describe in detail how SRC is helping the U.S. own semiconductors, and own the world.


Note: When this article was published, our analysis concluded that SRC programs prepare 20% of all semiconductor EE/ECE Ph.D. in the United States. A more comprehensive analysis has since been conducted and as of April 2024, we now know that SRC prepares nearly 20% the semiconductor PhD workforce nationwide including all relevant disciplines (not only EE/ECE). This original story has been updated to reflect the new information. 

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