The US plan to build semiconductors has a manpower problem: China and the BRICS have all the engineers
Bullets:
Semiconductor manufacturers are gobbling up US government subsidies to build new fabrication facilities in the United States, with promises to invest billions more of their own capital.
But the semiconductor industry is critically short of scientists, technicians, and researchers to meet the demand today.
The Semiconductor Industry Association itself admits that they will fall short by tens of thousands of engineers by 2030. The Master's and PhD graduate students that will be needed in five years are not enrolled in US universities at all.
The US and Europe are far behind the BRICS bloc, in the number and quality of STEM grads, and that gap is widening each year.
The grads that are so urgently needed by the US semiconductor industry are also in high demand across all technical fields.
China is the world's largest producer and consumer of semiconductors, and enjoys enormous cost and manpower advantages across all engineering disciplines, not just in computer science fields.
For US and European chip and chipmaking companies, China is by far the biggest market, consuming more than the rest of the world combined. And our companies are investing in new facilities across China, and are successfully hiring tens of thousands of Chinese engineers every year.
Report:
Good morning.
STEM is Science, Technology, Engineering and Math. This table is the number of STEM grads by country in the year 2020. There were 820,000 graduates from STEM programs in the United States, which is misleading and we’ll get back to why in a minute. China, India, Russia, Indonesia, Brazil, and Iran are BRICS countries, the emerging economic and trading bloc of natural resources economies that mine everything and build everything.
This chart shows the percentage of college graduates from STEM fields, same year, 2020. 41% of China’s graduates are in STEM, Russia and 37%, and so on. The US at 20%.
Those are the numbers. Other countries graduate many more engineers and scientists than Western countries do, and students in those countries study engineering and the hard sciences at much higher rates. In other words, every year the pipeline for top engineering talent grows everywhere but at home.
This analysis comes from the Semiconductor Industry Association, and this forecast in particular is not hard to make. The size of the semiconductor industry in the United States today is 345,000, that’s how many people work designing and building semiconductors. The industry will need 460,000 engineers and technicians by 2030. And there won’t be nearly that many, we’ll be short at least 27,000 engineers.
The association sees a shortage of 12,300 master’s degree level scientists and engineers, and over 5,000 PhD’s. Those are scientists who need to be in university, right now, and who are not. 2030 is five years away, so engineers who will be completing graduate-school level work need to be in class, today, somewhere. But they’re not.
And the comparatively small number of US grads are going to be in high demand by all industries, and the Semiconductor Industry is just one of them. We have engineering talent shortages everywhere—clean energy—and petroleum engineering also, medicine and biotech, AI, telecom, aerospace, manufacturing. The shortage of skilled STEM workers is a problem for the whole economy, not just computer chips.
Economywide, across just the computer science industries, the shortage is 1.4 million people.
Back to why the first chart is much worse than it appears. These are graduates of American universities, but many of them aren’t Americans. Over half of the master’s-level graduates in engineering are foreigners. For PhD’s, it’s 60%. 80% of the foreign master’s degree engineers and a quarter of the doctorates leave after graduation. That’s a total of 16,000 master’s and doctorate-level engineers leaving the United States every year.
The chip companies have plans to take these billions of dollars the federal government is handing out to build plants. But nobody in the industry thinks the people are going to be there to work in them. $39 billion is being used to build new semiconductor plants or expand old ones, and companies are lining up for the money, and pledging to spend another $210 billion more. But the labor market is tight right now, they can’t find the workers for the plants they have today—too few students know about the industry at all, so they’re not signing up for university classes. Then again the problem that a lot of the ones that are in our universities are going back to their home countries as soon as they get their diploma.
In China, these shortages of top engineering talent are much more manageable, because there are just a lot more of them, and a lot more on the way. This is an astounding data point, that 44% of China’s engineers are under the age of 30, compared to one fifth in the US. So compensation packages for Chinese scientists and engineers is one eighth. A company can hire 80 Chinese scientists, or 10 American ones, for the same money.
Semiconductor companies know that the talent pools are in China, right now, and worry that they may never show up in the US or in Europe. But they have another problem, because China is the biggest market for semiconductor chips. Most of the computer chips in the world are built here, and they are used here.
Intel is an American company, and has 12,000 employees in China, and China is 27% of Intel’s revenue. Intel has announced plans to expand their chip packaging and testing facility in Chengdu, spending $300 million. And $300 million goes a lot farther in Chengdu than in Chicago, and they can hire 8 times as many people. Intel has equity stakes in 43 Chinese companies
ASML is a Dutch company, with China sales of over 10 billion dollars. China is 36% of their sales, and they are building a new maintenance facility in Beijing.
These are cold realities, that semiconductor companies are happy to claim billions of dollars in federal money to lay concrete in Arizona and a few other places, while they’re telling themselves that nobody has a clue who’s going to be working there. But it’s free federal money, so what’s not to like. Then they make “pledges” to put in another 10 billion, or another hundred billion, years down the road. Meanwhile, down the road from here, they’re building and hiring, having no problem staffing out their engineering teams in their biggest customer market.
And here’s another reality. The United States at 820,000 STEM graduates, but if we back out the ones who are going to the airport the day after graduation, the US number is closer to five hundred thousand. Russia is ahead of us too. And that puts this into better perspective—there are roughly eight times as many Chinese engineers and scientists graduating, every year, than American ones.
We need to stop being dismissive of the BRICS countries. Those are the countries that run massive trade surpluses in energy, raw materials, food, manufactured products. They send us products, we send them money. Those are the countries that mine everything, those are the countries that make everything. And those are the countries where their kids are learning how to make everything.
Resources and links:
US chip-making dream awakes to labor crisis reality
https://asiatimes.com/2025/03/us-chip-making-dream-awakes-to-labor-crisis-reality/#
Chipping Away: Assessing and Addressing the Labor Market Gap Facing the U.S. Semiconductor Industry
ASSESSING AND ADDRESSING THE LABOR MARKET GAP FACING THE U.S. SEMICONDUCTOR INDUSTRY
https://www.semiconductors.org/wp-content/uploads/2023/07/SIA_July2023_ChippingAway_website.pdf
America’s Semiconductor Boom Faces a Challenge: Not Enough Workers
https://www.nytimes.com/2023/05/19/us/politics/semiconductor-worker-shortage.html
Intel Capital has a stake in 43 Chinese technology companies – report
Intel to invest $300m in China chip packaging and testing facility expansion
ASML will open Beijing facility despite US sanctions on China
https://www.theregister.com/2025/03/10/asml_to_open_beijing_facility/
ASML to build reuse-and-repair centre in Beijing despite US-China tech tensions
The Global Distribution of STEM Graduates: Which Countries Lead the Way?
China’s ‘Engineer Dividend’ Is Paying Off Big Time
Expanded BRICS to dominate global energy markets – data
https://www.rt.com/business/581804-brics-dominance-energy-market/
The World's Biggest Miners
https://www.statista.com/chart/32366/largest-extractors-of-domestic-materials/
BRICS country map
https://www.geo-ref.net/en/t-brics.htm
Will China Dominate the Global Semiconductor Market?
https://www.cigionline.org/articles/will-china-dominate-the-global-semiconductor-market/
Great to see you back mate! Been a while, hope you are all okay. Excellent analysis of the essential role of what is termed 'human capital", but is fundamentally about people before profit.
And they build the fabs in the absolute worst places to live. Who the fuck wants to move to shit hole Arizona in the sweltering heat and no water?