• Blogs
  • >
  • The Future of the Semiconductor Industry

Why is the semiconductor industry viewed as a national issue?

Artificial intelligence, 5G, the IoT, electric vehicles, and cloud services - all essential parts of everyday life - require quantum computing and ongoing innovation. Once a player in the field, the United States semiconductor industry is experiencing drastic loss in market share and an unprecedented talent shortage. As production continues to move off-shore, our on-shore talent pool is shrinking significantly.

This offshoring has not only had ramifications in the labor space, but also raises national security issues. Essential to the U.S. economy, the impacts of crippled supply chains and offshore semiconductor manufacturing has created a dependency on other nations that leaves America vulnerable.

This vulnerability, illustrated by the fact that the U.S. share of global semiconductor capacity has decreased to just 12%, versus 37% in 1990, has not gone unaddressed. Multiple pieces of legislation have been written to correct course. The Bi-Partisan Infrastructure Bill, the National Defense Authorization Act (NDAA), including CHIPS for America Act, and the America COMPETES Act are all aimed, at least in part, at funding to aid in developing new chip fabrication facilities in the U.S. Their goal is to supply critical applications and the recruiting efforts needed to staff these fabs.

Read on for a look at the legislation that promises to address this national security crisis, where the industry is headed, and where American chip makers should be looking for new talent.

Impact of Bipartisan Infrastructure Bill

Agreed upon last summer, the Bi-Partisan Infrastructure Bill represents an investment in our nation’s infrastructure and competitiveness. It promises to rebuild America’s infrastructure, expand access to clean drinking water, ensure high-speed internet access, tackle the climate crisis, advance environmental justice, and strengthen supply chains by making improvements to our nation’s ports, airports, rail, and roads.

John Neuffer, President and CEO of the Semiconductor Industry Association (SIA) released this statement in response to the passing of the bill: “The bipartisan infrastructure deal announced yesterday would modernize U.S. infrastructure and strengthen the U.S. economy, while also driving domestic demand for semiconductors through investments in key industries enabled by semiconductor technology, such as power generation and transmission, broadband, and electric vehicle infrastructure. We look forward to working with Congress and the administration to advance bipartisan infrastructure legislation.”

As Neuffer points out, most of the infrastructure enumerated in the bill requires semiconductors, which will prompt the reshoring and revitalization of America’s semiconductor industry.

Impact of the CHIPS for America Act

Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act was enacted as part of the FY 2021 National Defense Authorization Act (NDAA) and establishes a grant program at the U.S. Department of Commerce to drive investment and support for increased U.S. semiconductor manufacturing, prototyping, and design. As part of the Act, income tax credits are available for new investments in semiconductor capital equipment or manufacturing facilities through 2026.

Additional complementary legislation was recently introduced in March 2022 called the Facilitating American-Built Semiconductors (FABS) Act. Representative Mike Kelly (D-PA) said of the Act, "This is a matter of national security…Building semiconductor chips here in America strengthens the U.S. supply chain, lessens our reliance on foreign products and creates more jobs here at home…This pro-growth legislation is a win-win and will help to ensure that can continue for the next century to come."

Impact of the America COMPETES Act

The America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (America COMPETES) Act of 2022 promises to “accelerate U.S. production of critical semiconductor chips, strengthen the supply chain to make more goods in America, turbocharge our research capacity to lead the technologies of the future, and advance our global competitiveness, while supporting strong labor standards and human rights, among other key provisions.” Specifically, the Act Includes its own version of the CHIPS for America Act which will incentivize private-sector investments and continued American leadership in semiconductor fabrication.

How is China's rise in skilled manufacturing impacting the semiconductor industry?

According to the Center for Strategic and International Studies, “Beyond the dislocation for U.S. producers and consumers, policymakers have increasingly recognized the geopolitical and economic risks of the growing concentration of chip fabrication overseas—primarily in Taiwan and Korea. Numerous strategic technologies such as quantum computing and artificial intelligence rely on advanced semiconductors.

Reflecting this reality, the People’s Republic of China has declared self-sufficiency in semiconductor production a national priority. In short, many U.S. policymakers and lawmakers increasingly believe that American economic and strategic competitiveness requires a secure and significant domestic chip fabrication capacity.”

An FP Insider Report explains that semiconductors are the linchpin for U.S. and China’s mutually dependent technological ambitions and a vulnerability for both. However, the report adds that despite massive investment, China is highly unlikely to achieve independent semiconductor manufacturing capabilities in the next five to 10 years because of limited access to semiconductor manufacturing equipment (SME) and software, and their overall lack of industry knowledge.

What is the future of the Semconductor industry?

The future of the semiconductor industry lies in the successful reshoring of manufacturing and innovation and the revitalization of the talent here at home. To meet the capacity needs for only critical semiconductor applications, the U.S. would need to add 18 to 20 fabs, and about 70-90,000 total fabs jobs. This would require a 50% increase in the American semiconductor workforce.

With the legislation listed above, semiconductor companies are poised to regain their competitiveness. They need only look at the talented men and women of the armed forces to help fill the talent gap that has proliferated over the past few decades. Orion Talent CEO Sarah Peiker explains, "By leveraging their wide range of both hard and soft skills at scale and opening the doors wide to veterans with leadership, project management, logistics, and technical training, we can reshore and revitalize semiconductor, cybersecurity, and other critical infrastructure fields.”

Sarah explains that this talent can be deployed quickly and at scale to fill critical skills gaps. And, if they are not already trained in critical infrastructure or other STEM fields, upskilling and reskilling partnerships offer solid access to military talent unencumbered by NDAs and non-competes.

Reshoring and Revitalizing

The United States has long stood at the forefront of technological innovation. But this dominance is eroding as we find ourselves increasingly more reliant on foreign producers of semiconductors and less able to access top technical talent at home. By bringing the production home, America can compete with other powerful nations in skilled manufacturing, semiconductor manufacturing, cybersecurity and other critical infrastructure fields.

If you are part of this revitalization, Orion Talent offers several ways to connect you with highly skilled talent to power your fabs. Be sure to check out our Semiconductor Recuitment Process Outsourcing Recruiting solutions, Military Search solutions, and HireSkills™ SkillBridge Consulting through which we can help you leverage government partnership programs to upskill military talent.

Featured Blogs

[WEBINAR] Recruiting Rules to Break - Register Today
Read more ➔
The Future of the Data Center Industry: Trends & Analytics for 2022 & Beyond
Read more ➔
RPO Recruiting as a Career Path: How to Become an RPO Recruiter
Read more ➔
Why JDog Franchisees Are Thriving As Small Business Owners
Read more ➔
Exciting Careers with Companies that Offer Inclusive Workplaces
Read more ➔
Careers with Thomson Reuters
Read more ➔