Taiwan’s semiconductor {industry} has been beneath the worldwide highlight, given its indispensable strategic significance. Analysts have spilled a substantial amount of ink on the implications of geopolitical wrangling for Taiwan’s chip {industry}, and vice-versa. Nonetheless, the Taiwanese authorities and its chip {industry} face one other important downside – the battle to recruit sufficient chipmakers.
Up to now three years, Taiwan’s chip {industry} has frequently struggled to seek out sufficient engineers from upstream to downstream of the availability chain. In 2021, there have been 27,701 unfulfilled engineer positions within the {industry}, a few 44 p.c enhance in comparison with the second quarter of 2020.
The state of affairs solely worsened in 2022. The job market reported 35,167 unfulfilled positions within the first quarter of 2022, a 40 p.c surge from the identical quarter a 12 months in the past. Though the global market contraction for chips from the third quarter of 2022 to the second quarter of 2023 lowered workforce demand, the expertise scarcity was right here to remain. Taiwan reported 22,820 unfulfilled engineer positions on this interval.
Taiwan’s declining younger expertise pool presents one other critical problem for the chip {industry} to satisfy its workforce demand in opposition to the backdrop of the prevailing labor scarcity. Up to now 20 years, Taiwan has confronted a gradual reduction in STEM graduates throughout each undergraduate and graduate packages. On high of that, Taiwan is coping with the world’s lowest fertility price and an aging inhabitants that can shrink its total expertise pool.
Externally, Taiwan confronts intensified international competitors for semiconductor expertise as important gamers within the {industry}, together with the United States, China, South Korea, Japan, and the European Union, ramp up efforts to domesticate home expertise and entice international professionals. This international coverage sample is pushed by numerous motives, together with dealing with rising expertise shortages within the {industry}, empowering home manufacturing capabilities, adapting to new geopolitical dynamics, and recognizing semiconductor’s strategic worth in immediately’s world.
For Taiwan, the hovering worldwide competitors for chipmakers exacerbates its present expertise shortages as it might trigger an outflow of Taiwanese chip professionals in search of higher alternatives and enhance the issue of drawing in high international expertise.
Furthermore, the latest “AI wave” is predicted to increase the demand for chips, particularly high-end ones utilized in AI purposes, additional underscoring the {industry}’s want for added workforce for increased productiveness. The latest projection of 20 p.c annual income progress by Taiwanese chipmaker TSMC exemplified this rising demand.
Rising Strategic Give attention to Expertise Cultivation
Current international coverage developments show a shift towards extra government-led initiatives in cultivating expertise inside the semiconductor {industry}, and Taiwan isn’t any exception these days.
In June 2020, Taiwan’s Govt Yuan announced the “Main Enterprise Analysis and Growth In-depth Cultivation Plan,” prioritizing core applied sciences comparable to rising semiconductors, new-generation cell networks, and AI. Nonetheless, this technique didn’t prioritize expertise growth like those coming years later. As a substitute, it positioned extra give attention to international funding and revolutionary functionality.
A 12 months later in 2021, the Govt Yuan launched a brand new technique – “Accelerating Future Know-how Analysis and Expertise Planning” – emphasizing the significance of addressing expertise shortages. This technique launched the “National Key Area Industry-Academia Collaboration and Talent Cultivation Innovation Act,” aimed toward boosting industry-academia collaboration in semiconductors and AI.
In contrast to the technique doc in 2020, which largely disregarded the expertise half, the 2021 technique positioned “semiconductor expertise provide” as the primary pillar. The coverage shift mirrored the federal government’s realization of the escalating expertise scarcity resulting from surging market demand from 2020.
Because the laws handed, 9 universities have established new institutes specializing in semiconductors. This technique additionally expanded college packages in vital areas comparable to semiconductors, AI, digital engineering, and materials engineering, leading to a ten p.c enhance in undergraduate packages and a 15 p.c enhance in graduate packages.
To advance this technique, the Nationwide Science and Know-how Council (NSTC) allotted 35 billion Taiwanese {dollars} ($1.1 billion) for the “2025 Prime-Down Semiconductor Plan” to ascertain a number of packages to help semiconductor expertise from 2021. These packages have generated 848 grasp’s and 241 PhD-level college students, based on the legislative briefing in 2023. Moreover, the NSTC-owned Taiwan Semiconductor Analysis Institute supports 2,100 high-level semiconductor abilities yearly.
Following these initiatives, the Taiwanese authorities doubled down on its funding to help semiconductor expertise. In November 2023, the Govt Yuan unveiled the “Chip-based Industrial Innovation Program (CBI).” The plan is predicted to offer NT$300 billion ($10 billion) within the subsequent 10 years to mix generative AI and chip applied sciences for industrial innovation, refine the atmosphere for worldwide expertise, speed up industrial innovation, and entice international funding.
The persisting expertise scarcity in semiconductors has undoubtedly prompted the federal government to make leaps in supporting the atmosphere to foster extra expertise for the semiconductor {industry}. Whereas these insurance policies are largely constructive, they don’t seem to be complete sufficient to additional deal with the rising expertise want out there, as they overlook a number of important elements to unlock extra expertise sources. As such, listed here are some coverage suggestions that the incoming Lai administration ought to ponder.
Adopting a Nuanced Method
First, the federal government ought to enhance funding in pre-college training on semiconductors to boost college students’ understanding and foster their curiosity. This might embody providing elective programs, visiting lectures, seminars, and academic visits relating to the chip {industry}. This method may assist college students develop an curiosity within the discipline and the potential to decide on an space of research in faculty associated to semiconductors.
There have been some preliminary efforts on this space. The Ministry of Training final 12 months introduced experimental semiconductor programs in 5 vocational colleges. Whereas strengthening efforts to advertise chip-related programs is essential, the federal government should strike a tremendous steadiness by providing a various vary of elective programs to make sure the curriculum caters to college students’ different pursuits.
Second, the federal government, chipmakers, and educational establishments should collaborate to domesticate feminine expertise for the semiconductor {industry}, an underexplored workforce. In Taiwan, feminine enrollment in engineering packages stays disproportionately low in comparison with males, one of many the explanation why there are fewer feminine staff within the semiconductor {industry}. As an example, feminine workers constituted solely about one-third of TSMC’s complete workforce in 2022.
To encourage extra feminine staff within the {industry}, initiatives comparable to offering complete details about the semiconductor {industry} to feminine highschool and faculty college students can encourage their participation in associated engineering packages on the college stage and probably encourage them to decide on a profession in semiconductors. As an example, main chip companies like MediaTek and TSMC initiated such efforts in collaboration with educational establishments to draw extra feminine expertise final 12 months.
Authorities, academia, and the non-public sector ought to collaborate to additional encourage feminine expertise to pursue careers in semiconductors by providing devoted scholarships, offering post-graduate hiring ensures, and enhancing the involvement of feminine college students within the discipline.
Third, the federal government ought to set up semiconductor departments in vocational excessive colleges in Taiwan to facilitate direct entry into the semiconductor {industry} post-high faculty training and domesticate a expertise pool with sturdy semiconductor fundamentals for additional training on the faculty stage. That is one other underdeveloped space for potential semiconductor expertise the place the federal government has but to speculate.
Past higher using its youthful abilities, Taiwan also needs to spend money on upskilling and profession transition alternatives for its present workforce. For instance, the Taiwanese authorities ought to create extra well-organized chip-training establishments with potential hiring alternatives, focusing on people who’re in search of profession modifications or at the moment unemployed. This technique can faucet right into a helpful section of the labor market by offering avenues for employment in semiconductors.
Lastly, Taiwan should broaden the expertise pool past its nationwide borders. At present, Taiwan’s chip {industry} largely depends on home expertise, an method that can not be sustained as a result of diminishing start price. To that finish, Taiwan ought to actively revisit and revise its immigration insurance policies to extend entry to international expertise and meet {industry} calls for. Realistically, it is likely to be onerous for the Taiwanese authorities to advance main reforms in immigration coverage, as demonstrated by the pushback in opposition to admitting extra Indian migrant staff final 12 months.
The federal government ought to conjure up extra inventive and compelling measures to successfully entice extra international expertise whereas securing public help. One possibility is for the Taiwanese authorities to think about designing a “chip visa” that enables an applicable quantity of government-approved international semiconductor engineers to help Taiwan’s most significant {industry}. Taiwan can take into account nations like India, Vietnam, and the Philippines, which are home to a lot of engineers.
The federal government also needs to discover alternatives to collaborate intently with main chip companies to arrange scholarship packages and language coaching packages, together with post-graduate working alternatives in Taiwan-based semiconductor firms, for high graduate and undergraduate college students in Southeast Asia. Only recently, South Korean chip large Samsung adopted this method and signed an settlement with high universities in Vietnam aiming to safe international semiconductor expertise.
Such an method won’t solely be sure that Taiwan can carry extra expertise to help its {industry} however will even equip the individuals with the experience to work in Taiwan’s chip companies whereas having fun with life in Taiwan, an essential think about retaining these abilities.
Advocating for a average method to draw expert international expertise to help Taiwan’s vital {industry} can be extra compelling in gaining public help than proposing in depth immigration reforms, comparable to large-scale migrant employee packages.
To make certain, though the federal government is liable for addressing the expertise scarcity, it’s essential to level out that the scarcity can also be a product of its chip {industry}’s infamous working atmosphere, tradition, and public picture. This may solely be improved by the {industry} itself.
