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Chip talent war: Taiwan faces critical staffing shortage

Written by Nikkei Asia Published on   9 mins read

Semiconductor giants hike salaries to lure island’s dwindling number of graduates.

If you are a doctoral candidate in microelectronics in Taiwan, you don’t go job hunting. Instead, jobs come hunting for you.

“I didn’t submit my CV for any positions and didn’t update my profile for years,” said Ken Wu, who is due to complete his doctorate this June at National Yang Ming Chiao Tung University, one of Taiwan’s most prestigious microelectronics schools. Yet over the past two years, he has fielded approaches from top chipmakers increasingly desperate to fill the industry’s widening skills gap.

“I’m still in the process of earning my doctoral degree and can’t take a full-time job,” Wu said. “But I constantly receive emails and calls from HR departments and even from tech executives to see if I’d like to schedule an interview with them to learn more about their company and departments.”

Able to pick among offers, later this year, he will become a senior engineer with Taiwan’s Macronix, a specialized memory supplier to Apple, Nintendo, and BMW—and he is not alone in looking forward to a lucrative career.

The semiconductor industry is in the midst of a hiring frenzy as it races to add capacity to fill gaps exposed by the chip shortage of the past year and address demands from governments around the world to build more resilient and localized supply chains. Nowhere is the pressure more acute than in Taiwan, the world center of advanced chipmaking, where the appetite for engineering talent is growing while the pool of graduates is shrinking.

Human resources experts, industry executives, and government officials interviewed by Nikkei Asia all reiterate the same point: The current talent shortage is the most serious they have ever seen. And most expect it to get worse.

Tsai Ming-kai, chairman of MediaTek, the world’s top mobile chip developer by shipments, has warned of potentially significant consequences for Taiwan. “The shortage of high-end chip talent will pose challenges to the overall development of the semiconductor industry in the future,” he said at a recent news conference.

Taiwan’s semiconductor industry boasted more than 290,000 employees as of the end of last year, in a population of 23.4 million. That is up from 225,000 just two years earlier in 2019, according to the Taiwan Institute of Economic Research, and the expansion looks set to continue apace.

The two biggest Taiwanese chipmakers, Taiwan Semiconductor Manufacturing Co. and MediaTek are hiring a total of more than 10,000 employees this year, the majority in Taiwan itself.

United Microelectronics, the world’s fourth largest contract chipmaker, told Nikkei Asia that it aims to hire 1,500 people on the island this year. Europe’s biggest chipmaking equipment maker ASML said it will take on 1,000 staff in Taiwan this year out of an additional 4,000 globally. Other chip tools and materials makers like Applied Materials, Merck, and Entegris will also hire hundreds of people on the island this year.

Over 2,000 jobs are currently open in Taiwan from leading US chipmakers Micron, Intel, Qualcomm, Nvidia, and AMD, as well as top Taiwan-based chip developers like Novatek, Realtek, and Phison Electronics, according to sources including company statements, Nikkei Asia interviews, and job postings on LinkedIn and local recruitment platforms.

In addition to these big companies, there is an ecosystem of smaller companies also in need of talent. Openings range from crucial chip development jobs to positions working on manufacturing processes, data analysis, and more.

The total number of vacancies for chip industry positions came to 34,000 in December, up nearly 77% from two years earlier, according to a survey by 104 Job Bank, Taiwan’s largest local recruitment platform.

“We have never seen such hunger for talent in the semiconductor industry. It’s phenomenal. The number of job listings every month is huge,” said Jason Chin, a senior vice president at 104 Corp.

The situation is causing consternation in other industries in Taiwan and shifting the economic centers of gravity on the island. Taiwan’s western coast is home to a complete semiconductor supply chain, but TSMC last year announced it would build its next advanced chip plant in the southern Taiwanese city of Kaohsiung, a traditional industrial hub.

“Many bosses in the local petrochemical industries there are crying out, ‘Oh my goodness, we might not be able to find anybody if such a competitive recruiter is coming here,'” said Tang Ming-je, president of Chang Gung University.

The chip industry’s need for workers is also making it extremely difficult for contract electronics manufacturers to recruit, according to Martin Wong, president of laptop maker Compal Electronics.

“MediaTek and TSMC are hunting for talent everywhere, and we are also aiming to hire at least 1,000 people this year. How will we hire enough people if we don’t raise our game? We often go to schools to promote our company, hoping young people can get to know Compal before they graduate so we can increase our chances of hiring them before other companies do,” Wong said.

The pressure is growing even though a brain drain to China appears to have been slowed by a combination of COVID-19 and the effort of the Taiwanese government, which banned recruitment ads for jobs on the mainland.

“We are now witnessing a new round in the heated race to secure talent,” said an executive at a leading developer of display driver integrated circuit chips. “American chip developers such as Qualcomm, Intel, and AMD have all rushed to Taiwan to enlarge their R&D teams because they are also suffering insufficient talent supply for growth inside the U.S.”

Johnny Lin, general manager of Netlink Communication, a startup developing chips for connected devices like door sensors and smart toothbrushes, told Nikkei Asia that he recently lost some experienced engineers “because bigger and foreign rivals offer as high as 70% more or even double the salary package.”

“It’s tough for startup companies to match such salaries, but we see the urgency to review our overall pay structure,” Lin said. As a startup, his company offers stock options as additional incentives. “But such incentives may not work when there are so many job openings immediately out there by major multinational chipmakers.”

Major global chipmakers have cumulatively announced more than USD 370 billion worth of expansion plans, which implies massive hiring around the world. Governments from the EU to South Korea to India are increasing subsidies for their chip industries, while the U.S. and China have both pointed out in official statements the need to attract and retain chip talent to ensure the long-term competitiveness of their semiconductor industries.

Meanwhile, more companies are moving into chip development, further ratcheting up demand for talent. Deep-pocketed internet companies such as Google, Amazon, Facebook, Alibaba, and Tencent, and automakers such as Ford and Tesla are all building up chip design teams and the capacity to gain more control over a key part of their supply chains.

“Suddenly, ten to 15 more companies are building silicon chip design teams,” said Gokul Hariharan, co-head of Asia-Pacific technology, media, and telecom research at JP Morgan. “Everybody is searching for the same kind of talent.”

“It’s getting complex around the globe to find the right level of people for the simple reason that we are competing with our customers and with all the players in the industry,” said Peter Wennink, president and CEO of ASML, an equipment supplier to chipmakers. “Everybody is growing so fast. In Taiwan, we are competing with TSMC. In Korea, we are competing with Samsung and SK Hynix. In the U.S., we are competing with Intel and Micron, as well as Apple and Qualcomm.”

But if the talent war is proving a headache for executives and governments, it is a boon for those with the appropriate skills.

“Most of my graduate students found jobs and know where they are going in the first year of graduate school—more than a year ahead of graduation,” said Hou Tuo-hung, professor of electronics engineering and deputy vice president for R&D at National Yang Ming Chiao Tung University.

Henry Kao, a consultant at HR consultancy Intelligent Manpower Corp., told Nikkei Asia that employers have significantly boosted starting salaries for graduates. “The rise in salaries and appetite for talent is not only limited to engineers, but extends to professionals with environmental, health and safety [experience], legal advisers, and financial backgrounds to support the industry’s growth,” he said.

The legal minimum wage in Taiwan equates to a monthly salary of TWD 25,250 (USD 906), while the average monthly starting salary for a worker in the semiconductor industry is around TWD 52,288 (USD 1,875), according to data from the Ministry of Labor and a 104 Job Bank white paper on the chip industry. Nikkei Asia‘s interviews with executives and students, however, found that leading chip developers are offering much higher salaries than this. For example, MediaTek’s monthly salary for graduate students from top engineering schools reaches TWD 83,000. With bonuses included, the annual salary could exceed TWD 2 million (USD 71,730), rising to between TWD 3 million and TWD 5 million for those with several years of job experience.

With bonuses, the annual package for top-tier STEM graduate students can reach between TWD 1.6 million and TWD 2 million, according to an estimate from Intelligent Manpower. That is up by about a third since before the pandemic.

Such salary inflation is exactly what standard economics would predict when supply and demand are out of balance. New STEM graduates—those emerging with bachelor’s and master’s degrees or doctorates in science, technology, engineering, and mathematics— declined sharply in Taiwan to 92,000 in 2019 from 116,000 in 2011, according to the latest available data by the island’s Ministry of Education. A declining population makes it hard to reverse the trend in the short term.

But Taiwan’s semiconductor industry is seen as crucial for the island to maintain its strategic importance and international alliances amid deteriorating relations with China, pushing the problem high up the political agenda.

Taiwan leader Tsai Ing-wen’s administration has vowed to spend at least USD 300 million over the next ten years on educational programs to support the industry. Investments include four new semiconductor graduate schools at leading universities.

“Taiwan’s aging society and declining birthrate is a matter of serious national security concern, and the government understands the urgency of the talent gap in the semiconductor industry,” a senior government official told Nikkei Asia.

One of the solutions under consideration, the person said, is to ease regulations on hiring from overseas. Only a tiny number of foreigners work in Taiwan’s chip industry. Some 1,146 have work permits approved by the island’s science parks and tech and semiconductor hubs, according to data from the Ministry of Labor Affairs from December 2021.

Taiwanese tech industry veteran Chaney Ho, co-founder of industrial computer maker Advantech, told Nikkei Asia that “Taiwanese tech companies need to step up their offers to attract and retain domestic talent amid the competition, while also luring international talent.”

In 2018, the government introduced—and has since twice tweaked—a law to encourage immigration by professionals. It eliminated a requirement for graduates from the world’s top universities to have two years of work experience before coming to Taiwan. It also included tax incentives, faster access to health care and pensions, and shortened the period before foreign arrivals can apply for permanent residency.

The National Development Council said it aims to bring in up to 100,000 professionals in the strategic areas of information technology, green energy, health, cybersecurity, and defense by 2030.

Further encouragement to immigration could aid companies such as Phison Electronics, the world’s leading NAND flash controller maker. KS Pua, its CEO, told Nikkei Asia it plans to expand its workforce from 3,000 now to 3,500. “Talent shortage is a pressing issue, and we must embrace workers from overseas,” he said. “I hope to bring in more engineering professionals from Southeast Asia, mainly Malaysia.”

“If we are recruiting 1,000 people, that means we need to read at least 10,000 CVs,” said Poling Liu, ASML’s regional director of human resources for Taiwan and Southeast Asia. “That’s a lot of pressure for HR. We also need to look at talents from other Southeast Asian nations.”

Advantech’s Ho said with other major economies working to build up their chip supply chains, the talent war will only escalate.

“We should be happy to see so many companies hunting for talent in Taiwan. Foreign companies’ increased investment and R&D in Taiwan, which pushes up the local salary base, is overall a positive thing for the economy,” he said. “Every industry needs to be more competitive.”

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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