Semiconductors, a particularly strategic market for 2024
A vital component for many industries
Semiconductors are materials able by turn to act as insulators or conductors of electricity. They are integrated into all electronic devices that we use on a daily basis from smartphones to computers, refrigerators to coffee makers and cars.
They also play an essential role in what is called “Industry 4.0″ as the digital transformation of production lines is accompanied by new applications such as data management systems, intelligent sensors and IoT devices, the vast majority of which contain semiconductors.
Many industries have become dependent on semiconductors, and vulnerable to disruptions that affect their production. In 2021, for example, the Covid response led to the temporary closure of several large semiconductor foundries which, via a ripple effect, paralyzed a multitude of industrial plants, particularly in the automotive sector. According to Capital, manufacturers lost more than 200 billion in turnover as a result of this shortage.
Semiconductor production: the crucial geo-economic issues
Semiconductor production is highly polarized. Taiwan has historically been the global epicenter of the manufacture of these materials. According to data fromTrendForce, TSMC (Taiwan Semiconductor Manufacturing Company Limited), the largest Taiwanese manufacturer, represents alone a global market share of around 58%.
Tense geopolitical relations between Taiwan and China have recently been covering the region with a veil of uncertainty, endangering the stability of the whole global semiconductor supply chain.
It is therefore imperative, and urgent, for the industry to explore alternatives and diversify the geographical locations of semiconductor production on globally, in order to guarantee a stable supply.
The race for skills in the world of semiconductors
A pressing quest for skills in Europe and the United States
Although many leaders in the semiconductor sector such as Qualcomm, Applied Materials and Lam Research are located in the West, in particular in America, their production infrastructures, and in particular their foundries, are primarily located in Asia. Specialized talent in this domain is therefore rare in Europe or the United States.
Meanwhile the need for such expertise is increasingly pressing for the Western powers: the United States and Europe both passed “Chips Acts”, ambitious investment plans to guarantee the security of their supplies and to strengthen their semiconductor production capacities. These policies reinforce the need for highly specialized skills.
A particularly critical shortage of talent
According to a study by Oxford Economics, of the 115,000 jobs likely to be created in semiconductors in the United States by 2030, as many as 67,000 may remain unfilled,. Among the profiles sought are technicians and IT experts, but above all engineers. A TSMC factory is currently under construction in Arizona, and its opening, initially planned for 2023, has been postponed to 2024, due to a lack of qualified labor to operate it.
In France, the creation of new production plants in Isère by the companies STMicroelectronics and Soitec among others, will create around a thousand jobs in the Grenoble area. But as French newspaper La Tribune explains, the question as to whether there will be enough candidates to fill the available positions remains unresolved.
The United States and Europe are trying to focus on training, but it is unlikely that this will be sufficient to meet the need for skills in the short and medium term. Companies in the industry generally agree that the immediate answer has to be found in Asia.
Semiconductors: new pools of essential talent in Asia
India and Vietnam, well placed in the skills race
Asia currently has a head-start in the technology race in the semiconductor industry. Beyond Taiwan, India has developed its own semiconductor production industry with an ambitious subsidy policy. The country is emerging as the second global electronics production hub, behind China, and is currently home to nearly 20% of the world’s integrated circuit design engineers, according to Usine Nouvelle.
As a result the United States and then the European Union concluded agreements with India in March and November respectively to deepen cooperation in semiconductors. The American group Applied Materials has also started to invest in the country for the packaging and assembly of its semiconductors.
Vietnam is emerging as a valuable talent pool, and could become one of the world’s most important centers for chip and semiconductor manufacturing. According to the Courrier du Vietnam, the country has no less than eleven training establishments offering academic programs closely linked to the semiconductor and electronic chip industry. More than 40% of graduates from colleges and universities in Vietnam specialize in science and engineering.
Vietnam is home to Intel’s largest chip assembly plant and is also a major production hub for the South Korean giants Samsung and LG. According to Reuters, the Dutch chip manufacturer ASM has already announced future investments in the country.
Finding the right partner to source specialized skills internationally
Faced with the scarcity of specialized skills in Europe and the United States, the semiconductor industry is increasingly turning to Asia to fulfill its needs. This trend concerns both the recruitment of internal talent and the use of external service providers, a solution frequently favored by the companies involved.
However, sourcing external service providers abroad can be complex, and requires in-depth knowledge of local markets. The best solution is therefore often to turn to a specialized partner, like LittleBig Connection.
With its “Global Connect” offer, LittleBig Connection offers personalized support to identify and hire the best experts in the semiconductor industry around the world to strengthen your teams with specialized skills.
We have teams dedicated to skills sourcing in India and Vietnam: get in touch with Lena Radjibaly (lena.radjibaly@littlebigconnection.com) for India, and Julie Beaune (julie.beaune@littlebigconnection.com), for Vietnam, to obtain more information about our services!
