The global semiconductor industry faces a significant talent shortage as it strives to achieve $1 trillion (£765bn) in revenue by 2030.

A report by Deloitte – its 2024 semiconductor industry outlook – highlights the continued need for an additional one million skilled workers by the end of the decade, translating to more than 100,000 new hires annually.

Despite a temporary downturn in 2023, the industry’s growth trajectory remains strong, with a projected 16% revenue increase in 2024, reaching $611 billion (£467.2bn). However, the ongoing challenges surrounding talent acquisition and retention persist, driven by advanced skills demand, evolving workforce demographics, and geopolitical influences.

Advanced Skills and GenAI Impact

The semiconductor industry’s talent needs are increasingly shaped by advancements in technology, particularly generative AI. Deloitte’s survey indicates that 72% of industry leaders anticipate genAI’s impact on the sector to be “high to transformative.”

While genAI has the potential to alleviate some engineering skill shortages by automating routine tasks, the scarcity of talent proficient in genAI remains a significant hurdle.

This demand for genAI expertise spans across core engineering, chip design, manufacturing, and maintenance, where its role is expected to be transformative.

Workforce Demographics and Industry Appeal

The semiconductor sector’s aging workforce presents another challenge.

In the U.S., over half of the semiconductor workforce is 45 years or older, while in Europe, nearly 20% of the workforce is aged 55 or above. With a substantial number of experienced workers nearing retirement, the industry faces a potential talent cliff, compounded by inconsistent knowledge management practices.

Additionally, according to Deloitte, the sector struggles with brand recognition and appeal compared to other tech fields like AI and social media, which are perceived as more “exciting” career options. This gap in attractiveness makes it difficult for semiconductor companies to compete for top-tier talent.

Building a more diverse workforce also remains a challenge. In the U.S., only a third of semiconductor employees identify as female, and less than 6% as Black or African American.

Geopolitical Factors and Supply Chain Localisation

Geopolitical concerns and supply chain fragility continue to drive the onshoring of semiconductor manufacturing and the regionalisation of supply chains.

Both the U.S. and Europe have enacted legislation, such as the CHIPS Act and the European Chips Act, which include workforce development requirements as part of grant funding eligibility. These laws aim to boost local talent pipelines and support semiconductor manufacturing self-sufficiency.

However, over 80% of assembly, testing, and packaging (ATP) capacity remains concentrated in Asia, leading to extended and potentially vulnerable supply chains.

Several countries are investing heavily to expand semiconductor manufacturing capabilities outside of traditional strongholds. For instance, Japan has committed $13 billion (£9.94bn) to revitalise its semiconductor sector, and India is expected to face a deficit of 250,000 to 300,000 professionals by 2027 as it scales up its industry.

In the U.S., the Semiconductor Industry Association estimates that 67,000 of the anticipated 100,000 new industry jobs by 2030 could go unfilled without substantial workforce development efforts.

To address the looming talent shortage, Deloitte recommends that semiconductor companies adopt a holistic approach to workforce planning and skills development.

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This includes agile talent strategies that integrate data-driven insights to optimise the mix of hiring, training, and leveraging contingent workers. By collaborating with educational institutions, trade organisations, and government agencies, companies can build robust talent pipelines that reach underrepresented groups and cultivate a new generation of semiconductor professionals.

Upskilling and reskilling initiatives are also vital to closing the skills gap. Companies should identify adjacent skill sets and implement flexible career paths to attract workers from other sectors. Furthermore, investing in regional cross-training programs can help develop a more versatile workforce capable of adapting to advanced manufacturing and design roles.