Factory Physics and Automation blog

I just came back from the 2023 ASMC in Saratoga Springs, which was packed with 15 technical sessions and lots of great presentations. One topic was in the air throughout all the sessions – will the semiconductor industry have enough skilled operators, technicians and engineers ? Almost all keynotes brought this point up and there more I look at it the more I think the industries biggest problem in the next 5-10 years is the lack of skilled people.

Below are a few take outs from the presentations:

keynote Dr. Thomas Morgenstern, Infineon

keynote Thomas Sonderman, SkyWater Technology

panel discussion, Rick Glasmann, The MAX Group

keynote Robert Maire, Semiconductor Advisors

Robert Pearson, RIT

As a matter of fact, Roberts’ presentation sums up the situation perfectly and I got his permission to post it here:

Even the panel participants displayed a mirror image of the workforce situation. 3 out of the 4 panelists were seasoned Equipment Engineering / FAB veterans in contrast to the young AI / data expert. It really seems that the mechanical / electrical hands on work is slowly going extinct.

As one panelist shared with the audience: ” … I do have 3 kids, none of them want to work in the semiconductor industry …” asking about the why: ” … dad, look at you, you are always late back home, your are always stressed, the phone never stops ringing – why do I want to choose a life like this ? …”

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The topic is serious – I think existentially serious. The semiconductor industry is extremely capital intensive and will only survive if the equipment in the FAB is running 24/7. Based on the numbers – showing the needed additional skilled workforce – it seems there will be many, if not all factories facing output and efficiency losses. But how much ?

Most forecasts show a delta of about 200,000 workers over a base of about 300,000 existing workers – that is a 40% gap. Depending on the specific field where the workforce is missing the impact will be different:

• missing operators in manual FABs will have massive direct impact – tools will not be loaded / unloaded in time and therefore there is direct loss in capacity and cycle time
• missing process technicians will have impact on hold lot release and overall process stability and therefore impact yield and reliability
• missing maintenance technicians and engineers will directly lead to less equipment uptime and lower equipment stability, both directly impacting FAB output, yield and reliability
• missing process engineers will lead to reduced process improvement work as well as to less stable manufacturing processes
• the list goes on and on

What will be the economical impact of all this ?

The total US semiconductor industry revenue in 2022 was in the neighborhood of $275 billion. If I just assume that a 40% shortage in skilled workforce will have a 10% overall impact (which I think is a extremely conservative estimate) that would mean, in the next 5 years there will be a loss of 5x $27.5 or

$137.5 billion

Even if my back of the napkin calculation is wrong by a factor of 2 or 3, this number is mind boggling – and it appears “nobody” really seems to take serious action – Why is that ?????

I guess, factors are ” it will affect not my company, since so far it has been not a major problem …” or ” .. if worst comes to worst, we can always raise salaries and get people from across the street …”

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Nevertheless, if some companies might be less impacted, that means others are even more in a shortage. For the overall industry both scenarios are not good. The magic question is how to make jobs in semiconductor attractive again ?

Remember:

” … dad, look at you, you are always late back home, your are always stressed, the phone never stops ringing – why do I want to choose a life like this ? …”

Being myself a long time semiconductor addictive I fully can relate to that. It might be easy to say ” the young folks nowadays don’t like to work hard anymore …” – but false or true that will not change things. The semiconductor industry will be only more attractive for new technicians and engineers, if we change within the industry, what is seen as the problem by the next generations. The companies, which react and change first will have the best chances to again attract people.

Let me throw out a few possibly controversial thoughts here:

you are always late back home

Long hours have been a sign for hard work for way too long. If people need to stay on regular basis long hours, thats a sign for understaffing or bad organized / trained organizations. Unfortunately, reducing headcount numbers is seen as the easiest way to reduce cost. Too often, the quarterly hunt for good numbers – to keep Wall Street happy – leads to cuts, which are counterproductive in the mid and long run. Frequent downsizings – which are not uncommon in the semiconductor industry – are not a strong signal to attract the next generation of technicians and engineers.

–> rethink overall human resource strategies and become much more people centric (vs. pure head count efficiency, short term thinking)

–> incorporate impact of missing or not well trained workforce in all business model calculations to put hard $ numbers behind the effects (vs. assuming, people will be there when needed and set availability to 100%)

your are always stressed

Stress typically is generated, when people feel under pressure, since they can not control their job, but are controlled by overwhelming tasks and timelines. Outside of the general not enough people issue, key reasons are not enough know-how, training and resources to successfully do the job.

–> massively invest in training and standardization, people need to know what and how to do it

the phone never stops ringing

This is another “evil’ of the modern time: Always on, always connected and no clear rules for protecting employees personal time. This might be part of the general understaffing problem, but also not having enough experienced people, who can share the burden of on call and critical problem escalation support. During COVID people realized that there is also a life outside of work. Enjoying time with family becomes more and more important. If employers do not react people will leave or not even join to begin with.

–> how about guaranteed personal time with no contact from work and possibly a general 4 day work week ?
(imagine the company across the street starts to offer 4 day work week to attract people)

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I still think the semiconductor industry can be very exiting to work in: There is plenty of fancy high tech “stuff” to be proud of, to be involved for all levels of education. Salary needs to be at least somewhat competitive. If people get rock solid training and career path, there should be no reason why people do not choose a career in semiconductor. Employment will be almost guaranteed in the next 10-15 years, looking at all the shortages.

I think these are the main levers to make semiconductor industry attractive again:

• massive image campaigns to the greater public and schools
• create opportunities for young people to understand what it means to work in a FAB
• community colleges and universities to offer the needed classes to study what is needed
  – input and funding to come from the semi industry
• seriously care about your people and get rid of the 24/7 grind with rules and appropriate staffing
• define semiconductor industry wide accepted job standards, which describe skills sets needed and certification levels
• training, training, training and clear career path visibility

This all will only happen if driven by the ones who have the problem in the first place – the semiconductor industry and universities that teach semiconductor engineering itself. It is not that the FABs should or can pay for everything themselves, but they need to start driving activities yesterday. Last but not least, programs like the CHIPs Act clearly need to involve workforce development with significant amounts, since else all the new FABs will not run as productive as planned . The result will be, that the attempt to bring semiconductor manufacturing back into the US will fail.

Super curious what you think about all this – please comment !