Group calls for cross-region action to address semiconductor labor shortages

For the United States to achieve greater security in chip manufacturing, the critical sector requires a much larger, better trained workforce. Between 2020 and 2022, annual postings for semiconductor jobs tripled from about 8,000 to almost 25,000, according to a new report, “The challenge of building a regional semiconductor workforce pipeline: What regions can learn from Austin, Texas and an agenda for cross-regional learning” from the Institute for Networked Communities (INC). As noted in the report, analysts expect that between 2023 and 2030, the industry will grow 33%, an increase of 115,000 jobs. At current degree completion rates, approximately 67,000 jobs would go unfilled.

The INC report illustrates what it takes to build an industry-driven workforce system in the semiconductor industry based on the experience of Austin, Texas. The co-authors Francie Genz, Ryan Donahue, and Erin Sparks delve into what other regions can learn from Austin and why a cross-regional learning and action network is needed.

“The stakes for getting regional workforce strategy right in the semiconductor space couldn’t be higher,” said Francie Genz, CEO of INC, in an email. “This is complex, systems-level work—and it’s urgent. We knew that Austin had many of the right ingredients and a story others can learn from. But we also know that the model that Austin developed is not the right model for every region. That's why now is the time for groups of regions to go deeper in sharing what's working, what's not, and what it really takes to build a workforce strategy that delivers, for both people and for industry.” 

The rollout of announcements for major new semiconductor hubs, be they manufacturing facilities or research investments, has been on a rapid pace during the past two years. In December 2023, SSTI published a story about New York Gov. Kathy Hochul’s announcement of the state's commitment to establishing a next-generation semiconductor research and development center and the U.S. Department of Commerce announcement that the department and BAE Systems Electronic Systems had signed an agreement to modernize the company's Microelectronics Center in Nashua, New Hampshire. Following those announcements, SSTI reported on investments in the semiconductor industry in Illinois and in Arizona and Texas. Commerce also announced investments in Arizona, New Mexico, Ohio, and Oregon, Minnesota, and Florida, to name a few. (To access press releases about all semiconductor investments under the CHIPS and Science Act, click here and search “semiconductor industry.”)

With so many states committed to creating a semiconductor hub in their region, it is no surprise that the semiconductor workforce shortage will be reaching a critical stage as new plants come online. 

There have been semiconductor companies in Austin, Texas, since the 1970s. The industry established a firm foothold in the city in 1988 with the establishment of the Sematech consortium, a collaboration of semiconductor manufacturers focused on strengthening the industry's competitiveness. The efforts to strengthen the workforce pipeline in Austin started over a decade ago, according to the INC paper. 

The regions that have just received a significant influx of investment do not have the luxury of time that Austin enjoyed. “(Other regions) will not be able to easily test and refine workforce development models along the way; they need to get it right the first time, often without much input from firms that are to begin hiring in the next one to three years,” note the authors in the report. 

Genz, Donahue and Sparks lay out five critical elements that have led to successful efforts to build the semiconductor workforce, which are listed below.

Innovative community college leadership and staff with deep industry experience who can challenge traditional college approaches and institutional silos, designing for-credit and non-credit programs that support industry and students holistically.

State funding for training that allows for experimentation while also requiring accountability and outcomes reporting from participating companies.

A strategic shift within the community college away from a static, workforce-program-driven orientation to a dynamic, demand-driven relationship with industry.

A bridge between the credit and non-credit sides of the community college to build multiple programs that create easy-to-navigate pathways.

A credible, effective industry association that convenes companies to scale training across multiple companies.

These five elements were developed during an iterative process over the past decade, the authors explain, and the workforce recruitment and training elements are still works in progress. The authors call out three aspects of the Austin model that still need improvement: 1) engagement strategies for raising the awareness of K-12 to a level that sufficiently expands the pool of students pursuing semiconductor careers; 2) internships and work-based learning opportunities for students not yet working in the industry; and 3) a robust data tracking system to measure placement, retention, and wage outcomes,

With the expansion of the semiconductor industry to more locations across the country, the authors recommend establishment of a cross-regional network pairing a learning agenda with an action agenda, "which includes a commitment to shared problem-solving and a willingness to jointly tackle deeper, strategic issues across regions." This network could include industry, community colleges, universities, K-12 partners, workforce development boards, community-based training providers, economic development organizations, and state partners. 

Such a network seems feasible, based on research conducted to prepare the report; the authors note that "interviews with key players in the regions with a major semiconductor industry presence reveal a readiness to collaborate across regions to engage the semiconductor industry more deeply and effectively."