The war for talent in the semiconductor industry

Publish Date

19 OCT 2022


Kai Beckmann


The semiconductor industry has grown at a breathtaking pace in recent years. As the demand for semiconductors rises rapidly, so does the need for skilled professionals, further intensifying competition for talent with key skills.

Global revenues will be nearly 50% higher in 2022 than in 2019, according to Deloitte estimates. “Traditional” application areas such as computers, data centers and smartphones are continuing to grow. At the same time, advances with the Internet of Things, automated systems and artificial intelligence are giving rise to ever more new applications. As the demand for semiconductors rises rapidly, so does the need for skilled professionals, further intensifying competition for talent with key skills.

Even in the technology centers of the United States and Southeast Asia, the classic strongholds of the semiconductor industry, competition for talent is fierce. McKinsey, for example, expects additional demand for 300,000 engineers in the United States alone by 2030.

The reasons for the shortage of skilled workers are many. The qualifications required have evolved as new fields of application continue to emerge in the semiconductor industry. Data analytics specialists are now among the most urgently needed occupational groups, whom companies are fiercely competing for. And established high-tech companies with strong consumer brands such as Apple, Amazon and Facebook are fishing in the same talent pool as our industry is and have been positioning themselves as highly attractive employers for some time now. McKinsey surveyed chip industry executives on this issue, and 60% of respondents believe that semiconductor companies suffer from weaker brand perception compared with other technology companies.

The semiconductor industry trade association, SEMI, is concerned that far too few young professionals are aware of the attractive high-tech jobs the semiconductor industry has to offer. According to SEMI, the image of the industry is still characterized too strongly by manufacturing and not by the complex, demanding development requirements that drive this industry.

To address the acute labor shortage, we need concerted action by all stakeholders at all levels. Three fields of action must be tackled with determination:

  1. Increase the perception of the semiconductor industry as an attractive employer to recruit more young talent.
  2. Motivate employees to stay at the companies in the industry by offering attractive working conditions.
  3. Lastly, the talent pool as a whole must be enlarged and more talented young people must be attracted to technical professions.

How can this be done specifically?

The semiconductor industry is on board with all the relevant issues of our time – but does anyone know this?

Industry 4.0, smart mobility, energy efficiency, and sustainability are just a few keywords here. After all, many young high-tech professionals today are no longer motivated solely by salary and career prospects, but also by a determination to make a difference and shape the future sustainably. In addition, the topics of equity, diversity and inclusion in the profession and in the choice of employer are also playing an increasingly important role.

As employers, we cannot expect young people to approach us on their own. We have to go where the talent is and become much more visible – whether through campaigns promoting the image of the industry or intensive collaboration between companies and universities, research institutions, educational initiatives, and tech festivals. A few examples from the United States and Asia can serve to illustrate what this could look like.

Going local, engaging in dialogue, getting close - that's what we're trying to do at EMD Electronics, for example, with a wide range of activities related to our purpose of advancing digital living. Among other things, we offer summer internships for students in the United States in collaboration with renowned universities. We successfully supplemented these with digital and hybrid formats when physical presence was restricted during the pandemic.

Likewise, we need to be present on digital platforms. In addition to our own career website, for example, we support the SEMI careers website, which serves as an online gateway for potential employees in the United States to the industry and all the opportunities it offers. But we're also working with new, innovative formats. Using social media to reach young talent is a matter of course today. But the ways of addressing them can evolve beyond the classic post to more innovative formats.

For example, we worked with influencers in Taiwan and offered young university graduates the chance to meet colleagues already in the workforce on Facebook. A video entitled "Kaohsiung site director for a day", which we published and promoted on two Facebook fan pages together with the Taiwanese online medium UDN, generated 940,000 views and a wealth of positive comments within a week.

Those who join should stay: Retaining personnel through attractive working conditions

Just as important as stepping up efforts to attract the best skilled workers to our industry is retaining them for the long term. The catchphrase "Great Resignation", coined by Anthony Klotz of University College London, describes the massive exodus of employees, which has become a challenge for many industries. Among employees in the North American semiconductor industry alone, 40% are open to changing jobs in the coming months, according to the aforementioned McKinsey survey conducted in August 2021.

Higher personnel turnover and a greater willingness to change jobs within and also between industries are not only related to the effects of the Covid-19 pandemic and the changes in the world of work that it triggered. Klotz has shown that this reflects longer-term changes in society as a whole. They mean that for more and more people, the classic career path of the full-time employee is just one option among others. More flexible models that include part-time and freelance work and leave more room for self-determination, free time or family care are gaining massively in importance.

Flexible, team- and dialogue-oriented work models with flat hierarchies, diverse teams and inclusive frameworks are the future. They are what will prompt talented people, for whom these criteria are increasingly influencing their choice of job, to choose a career in the industry and remain loyal to it.

We have also, for example, made virtual, decentralized working common practice long before the Covid-19 pandemic with our "mywork" model. The pure physical presence culture of yesterday is a thing of the past. Diversity, i.e. the promotion of all demographic groups, regardless of gender, age or ethnic background, is also a high priority for us. In the United States, for example, we have committed to increasing the number of employees from underrepresented ethnic groups from 21% to 30% by 2030. Overall, our diverse initiatives are paying off: the resignation rate of our employees in the United States is consistently well below the industry average.

Starting from an early age: promoting digital education and STEM subjects

In addition to the specific efforts of the chip industry, there is also a need for action at the level of society as a whole to counter the shortage of skilled workers in the industry. More young people need to be qualified in order to increase the pool of suitable skilled workers overall - a challenge that is specific to Germany and Europe in particular.

It is a matter of aligning the education system and the content taught with future requirements. Young people must be exposed to and learn about technical-scientific topics as early as possible so as to spark their interest in them.

Women must also be proactively addressed. The fact that they now make up more than 30% of those studying STEM subjects at university compared with only 15% of women working in a STEM profession is an encouraging development. But more can be done here, too. Scholarships, action days and networks for women can help promote their interest in technical professions.

Competition for top talent has long become global. Only through decisive action at all levels can we address the shortage of qualified workers. This in turn is a precondition for the semiconductor sector to be able to serve its overall economic mission as a key industry.

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