The Semiconductor Industry Association (SIA) has released the State of the U.S. Semiconductor Industry 2024 report. It identifies key conditions of the U.S. semiconductor industry such as workforce, supply chain, trade and cooperation, technological competitiveness, governments competing to develop strategies and incentives, and current and upcoming challenges to the industry’s continued success.
Semiconductor Innovation and Industry Growth
The rapid pace of semiconductor innovation is making the world smarter, healthier, greener and more connected. Chips are driving the transformative technologies of the future, including artificial intelligence, autonomous and electric vehicles, and advanced wireless networks.
Global sales rebounded in the second half of 2023, reaching $527 billion. With the end of the downturn and high demand for semiconductors, industry analysts expect double-digit annual growth in 2024.
The growing demand is also prompting new industry investments to increase chip production. As of August 2024, companies in the semiconductor ecosystem have announced more than 90 new manufacturing projects, with the investments totaling nearly $450 billion announced across 28 U.S. states. These investments are expected to create tens of thousands of direct jobs in the U.S. economy and support hundreds of thousands of additional jobs.
U.S. Industry Labor Shortage
The semiconductor industry has a considerable economic impact in the United States, with approximately 338k people employed in the industry. This includes chip design, electronic design automation (EDA), semiconductor manufacturing, and device manufacturing. In addition, semiconductors support more than 300 downstream economic sectors, providing jobs for more than 26 million U.S. workers.
As the demand for chips continues to grow and new capacity comes on stream in the coming years, the need for industry talent will also increase. According to a 2023 study by the SIA and the Boston Consulting Group, the United States faces a severe shortage of technicians, computer scientists, and engineers, with the semiconductor industry expected to be short of 67,000 employees by 2030, while the entire U.S. economy will be short of 1.4 million such workers.
To address this challenge and the growing talent gap, SIA recommends a comprehensive public policy approach that includes the following pillars:
1. Train Engineers and Scientists
Invest in an innovative workforce: Increase and maintain fund for federal research and maintain funding for federal search and development programs to build America’s innovative workforce.
High-skilled Global Talent: Adopt critical, targeted STEM immigration reform to ensure the United States attracts and retains the world’s top talent.
2. Improve and simplify training of Skilled Technicians
High-quality workforce training: Expand workforce training programs that meet industry needs, including apprenticeship, vocational and technical training programs, with common and transparent performance indicators.
Standardization and portability of skills: Simplifying the transition between educational institutions and workforce development programs.
3. Cross-workforce challenges: Expanding access and addressing affordability
Expand and upgrade the STEM talent pipeline: Prioritize STEM education for individuals entering or already entering the pipeline, and expand the pool of potential workers, including veterans, women, and underrepresented minorities.
Affordability: Remove barriers to access to semiconductor education and workforce training programs through Pell grant, concessional loans, and other financial incentives.
Conclusion
Strengthening and expanding the chip supply chain in the United States provides tremendous opportunities, but it also brings tremendous challenges. For example, as the U.S. chip business expands in the coming years, so will the need for skilled talent. Overall, the semiconductor industry is well positioned for long-term growth. As innovation continues to grow globally, the demand for semiconductors as the basis for this advancement will also grow.
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