Talent Availability: Key to Semiconductor Industry Growth

Semiconductors are foundational to our current way of life. Nearly everything we use and value, smartphones, cars, medical devices, solar panels, has a semiconductor, or microchip driven by a semiconductor at its core, powering performance. Semiconductors are also at the heart of the groundbreaking advances being made in fields such as AI, aviation, climate and sustainability, robotics, speech recognition, and many more.

NVIDIA becoming the most valuable company on the planet with a market capitalization exceeding $ 3.5 trillion in 2025, and overtaking many of the usual suspects like Apple, Amazon, Meta and Alphabet, brought the contribution of the industry into the public imagination, otherwise focused on end-user items like cars, mobiles and gaming consoles. According to Yahoo Finance, in the first 11 months of 2024, NVIDIA’s “growth equates to a year-to-date market value increase of almost 195%.”

The Outlook is Bright

The great chip shortage during the pandemic further drove home the importance of the industry, with nations and corporations alike announcing plans to set up new facilities. Based on an analysis of data from Gartner and the Semiconductor Industry Association, a McKinsey report stated that “From South Korea to Germany to the United States, companies have announced plans for massive new factories. In all, close to $1 trillion in investment is expected from 2023 to 2030.”

Closer home, with $5 billion of imports annually, and with their capacity to influence future technologies and shape the balance of power, semiconductors are one of the top items for localisation for India. With an abundance of software talent and the Make in India initiative of the government, India hopes to play catch-up to countries like Taiwan, South Korea, Japan, Germany and the US, the front-runners in the semiconductor space, and grab a seat at the high table.

Inadequate Talent Availability Plays Spoilsport

The shortage of talent could be the single biggest hurdle in the path of the industry’s growth at breakneck speed. Industry leaders have often expressed concerns about the rising gap between demand and supply of talented professionals.

Why is this the case?

Firstly, many of the roles in the industry are highly technical, requiring a mix of skills such as design, nanotechnology, testing and handling advanced materials. This requires a combination of academic excellence and hands-on experience. With the industry not being so much in the limelight so far, the number of youngsters opting for a field of study that would qualify them to work in semiconductors has been limited.

Additionally, the war for talent is no longer limited to your neck of the woods; it has gone global. While it makes the best talent anywhere in the world available to you, on the flip side, your talent could be poached by anyone in the world. The acceptance of virtual work during the pandemic has further accelerated the trend to hire the best anywhere in the world.

The McKinsey study referenced earlier summarises the situation and says that “Talent will be a critical part of the equation in this evolving industry. Companies must ensure they can attract and retain a sufficient pool of talent to ensure the new capacity under construction can operate at full steam when it starts production…The convergence of an insufficient number of graduates, an aging workforce, and an industry with a poor perception among candidates means these new capital projects could be delayed or unable to run at full capacity without urgent, coordinated action.”

A Financial Express article of October 2023 suggests “a Compound Annual Growth Rate (CAGR) of around 100% in open positions over the last three years” in India.

Finding Solutions

The ability to attract and retain talent is central to the success of players in the industry. While governments and industry associations are making efforts to create a supportive ecosystem, including one for talent, the last-mile steps need to be taken by companies themselves. Innovative strategies for recruitment, exploring previously untapped talent pools, investing in development of skills and knowledge of employees, ensuring a workplace environment that is conducive to work and encourages the best to stay, elevating their branding to become more attractive to fresh graduates, leveraging technology to make processes like matching and profiling processes more efficient, are some of the well-documented strategies that have been used by companies in the past and will continue to be used, as they are all essentially good practices.

What more can semiconductor leaders do?

Semiconductor companies should consider partnerships with like-minded and like-capability providers in various spheres, including hiring. As an emerging powerhouse, the industry has so far flown below the radar of many; hence, the supply of providers with expertise in the industry could be limited. But where it exists, such as Ushankk in the executive search space, it could make a critical difference.