US semiconductor boom faces worker shortage amid race with China

A growing shortage of skilled workers could delay construction of new semiconductor facilities across the U.S. and limit future chip production unless industry players pool resources and government funding continues, Bloomberg reported.

The shortage is expected to be seen mostly in the states of Texas, California, Arizona, New York and Ohio, where new chip facilities are being built. The skilled labor shortage could reach as high as 157,000 full-time workers by 2030, according to a joint analysis by McKinsey & Co., industry group SEMI and the National Science Foundation.

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The talent shortage is threatening major investments already underway, including Taiwan Semiconductor Manufacturing Co.’s estimated $265 billion spend on a dozen chip manufacturing and packaging facilities in Arizona, Micron Technology Inc.’s $100 billion memory chip project in New York and Samsung Electronics Co.’s logic chip facility in Texas. The report stated that Intel Corp.’s postponed $28 billion Ohio investment is also expected to face shortages when the production scale increases.

The findings add to a growing list of challenges for U.S. chipmakers trying to expand domestic production and reverse decades of manufacturing moving to Asia. Rising costs of copper, steel and cement are also increasing construction costs for facilities that are at the center of President Donald Trump’s economic agenda.

Even as the chip industry braces for a labor shortage, the broader AI investment boom has contributed to job losses elsewhere in tech; Recruitment firm Challenger, Gray & Christmas has tracked nearly 102,000 AI-related layoffs so far this year.
The report stated that if left unaddressed, the workforce shortage could jeopardize both private investment plans and federal funding under the CHIPS and Science Act of 2022. Sustained government support, expanded semiconductor curricula and earlier career opportunities for students were recommended.Also read: US chip startup SambaNova raises billion-dollar funding round

By 2030, approximately 74% of vacancies in the sector are expected to be in manufacturing and 60% in engineering. According to the survey, almost three-quarters of employers already report difficulty recruiting engineers; This problem is compounded by the fact that only 3% of engineering graduates in the US enter the chip industry, and most are instead heading into higher-paying software and AI roles.

The CHIPS Act appropriates $200 million through 2027 to the National Science Foundation for workforce development conducted through the National Microelectronics Education Network. The report’s authors recommended continuing this funding.