Chip Industry’s Looming Talent Crisis Threatens Growth

A Million Workers Short by 2030

The semiconductor industry faces a critical shortage of skilled workers, with projections estimating a global deficit of one million professionals by 2030. In the US, the Semiconductor Industry Association forecasts a shortfall of 67,000 workers, while Europe could lack over 100,000 engineers, and the Asia-Pacific region may need more than 200,000. This gap threatens to stall the industry’s rapid growth, driven by a 19.1% sales surge to $627.6 billion in 2024, fueled by AI advancements, 5G networks, and automotive demand.

Academic Pipeline Dries Up

The root of the crisis lies in declining enrollment in semiconductor-related fields. In Germany, STEM student numbers dropped 6.5% in 2021, with only 82,000 electrical engineering students enrolled in 2018. The US awarded just 13,767 electrical engineering bachelor’s degrees that year, while Ireland saw a mere 742 new students in the field in 2017. An aging workforce exacerbates the issue, with one-third of US and German semiconductor professionals nearing retirement. Meanwhile, demand shifts toward AI and machine learning expertise, outpacing traditional circuit design skills.

Fierce Competition and Turnover

Competition for talent is intense, with 92% of tech executives reporting hiring challenges. Turnover is climbing, with 53% of workers expected to leave in 2024, citing limited career growth and flexibility. Global production is concentrated—Taiwan leads with 65% of chip manufacturing—making it hard to relocate talent. Companies are responding by prioritizing skills over degrees and recruiting from adjacent sectors.

Can the Industry Adapt?

Governments are stepping in, with the EU’s €43 billion Chips Act and the US’s $52.7 billion CHIPS Act aiming to boost local production. Yet, initiatives like the US Workforce Partner Alliance, funded with $5 billion, may not fill the gap fast enough. Retention strategies, better pay, and diversity efforts—women hold only 17% of technical roles—are critical. Without bold action, the chip industry risks stalling its own momentum.