Recently, according to Kyodo News, last December, the city of Mashiki in Kumamoto Prefecture held a joint recruitment fair for semiconductor companies. The exhibition area for TSMC's Kumamoto factory (JASM) was packed, with some job seekers even standing to listen. In terms of salary, JASM offers a starting salary of 280,000 yen for university graduates, which is about 70,000 yen higher than that of the manufacturing industry and government employees in Kumamoto Prefecture.

TSMC's high salaries have driven some companies to adjust their pay scales. For instance, the largest regional bank in Kumamoto Prefecture, "Higo Bank," will increase the salaries of all employees by more than 5% in April, and the starting salary for university graduates will also increase by 20,000 yen to 240,000 yen.

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Furthermore, the competition for AI talent in the United States is also intensifying. According to a set of "Top 5 Hottest Jobs" salary data, AI/Machine Learning Engineers: up to $300,000 per year; Cloud Security Leaders: up to $300,000 per year; AI Product Managers/Engineering Managers: up to $650,000 per year; AI Operations Executives: up to $2 million per year.

As the global AI drives the semiconductor industry boom, the talent competition is becoming more fierce. The treatment of practitioners is also rising. How to compete for and cultivate talent has become a hot topic in the industry.

01

Current Status of Chip Talent Cultivation in China

It takes ten years to grow a tree and a hundred years to cultivate a person. Talent cultivation is a long-term project. In response to the urgent needs of the country, many integrated circuit colleges have been established in various places in recent years.

In 2003, China established the "Integrated Circuit Design and Integrated Systems" major, which was adjusted to a special major in 2012. In July 2020, the Academic Degrees Committee of the State Council and the Ministry of Education issued a notice to clearly decide to set up integrated circuit as a first-level discipline. Subsequently, universities across the country actively responded to the national strategic needs under the new situation and successively established integrated circuit-related colleges.

As of May 2022, China has established 29 universities as national integrated circuit talent training bases, national exemplary microelectronics colleges, and integrated circuit industry-education integration innovation platforms, including 23 985 universities.In 2021, universities such as Sun Yat-sen University, Hangzhou Dianzi University, Tsinghua University, Huazhong University of Science and Technology, and Peking University successively established integrated circuit (IC) schools.

In the field of integrated circuits, China still needs to delve deeper into fundamental theories. The establishment of IC-related majors and schools undoubtedly benefits the reserve of new forces in China's chip industry and will promote the collaborative development of industry, academia, and research in China's chip sector. However, according to data from the "China Integrated Circuit Industry Talent White Paper," there is still a shortage of more than 200,000 talents related to integrated circuits.

Driven by high salaries and promising career prospects, chip engineers have become highly sought after, and the chip industry has become a popular field for job seekers.

In this context, in addition to IC schools, the chip training industry has rapidly emerged, with a large number of students flocking to training classes, hoping to obtain a "ticket" to enter the chip industry.

Looking at the market development process, the vocational training in the chip industry started relatively late, but under the full force of market demand and corporate efforts, it has gradually formed a standardized and scaled training mechanism.

Currently, the main entities conducting chip training are government-led local government IC talent training bases and commercial training institutions. Chip training is mainly divided into two categories: one is targeted and directional training for engineers in chip companies; the other is training for people with no foundation, recent college graduates, and those with job transition needs.

Regarding the specific forms and content of the training, industry insiders have indicated that the market currently includes several types such as job placement training, university internships and practical training, industry open courses, and corporate training. At the same time, based on the duration of the training, those with a training period of three months or more are defined as in-depth training.

However, some industry insiders have expressed that the current booming chip training market is a mixed bag, with many training institutions using the hype of chip technology to make money, seeing only the huge profits in the chip industry without providing substantial teaching benefits.

Among various flashy recruitment slogans, high-frequency buzzwords like "high salary," "no foundation required," and "career change" flash, constantly stimulating the nerves of potential candidates, but in reality, there are countless pitfalls behind them, and the outcome is likely that students spend money and time with little to no benefit in the end.

In addition to harming the interests and time of students, such unreliable training institutions are also continuously eroding the trust of enterprises.The booming chip training industry indirectly confirms the significant talent gap in the chip sector.

02

Why is the chip industry short of personnel?

As a high-paying profession, the chip industry has always attracted talent, yet it remains chronically understaffed. The root cause of the current talent shortage in the chip market is the rapid development of chip technology, which has outpaced the supply of personnel.

Xu Liu, the Vice President of R&D at Shanghai for the leading Chinese chip design company, OmniVision Group, once stated that the fundamental reason for the talent shortage in the chip industry is that the chip industry in Mainland China started late, initially relying heavily on imports, leading to insufficient talent reserves. The world's top chip talents primarily come from regions with early chip technology development, such as the United States, Japan, and Taiwan, China.

The talent shortage is not unique to China. Ye Tianchun, a researcher at the Institute of Microelectronics of the Chinese Academy of Sciences and a member of the International Eurasian Academy of Sciences, introduced that during the early development of integrated circuits, whether in the United States, Japan, South Korea, or even Taiwan, China, talents were constantly being poached, and there would always be such a process. The current round of development in China's chip industry is a result of the global industry shifting towards China, which is why the scale of our country's chip industry has expanded rapidly. This also makes the demand for talent in the chip market appear more urgent.

In addition to the rapid development of the industry, the difficulty in talent cultivation is also a significant reason. It is understood that the threshold for chip research and development is very high, with a minimum requirement of a postgraduate degree, and the starting salary for positions in Shenzhen is at least 20,000 RMB, with annual performance bonuses and salary increases.

Due to the industry's particularities, the threshold for integrated circuit technology is high, spanning multiple disciplines such as physics, chemistry, materials, and chemical engineering, and talent accumulation is essential from design to production. The training period for chip talent is long, and the technology iterates quickly, leading to a supply shortage in the market. As long as talents are willing to move, every company can offer a very high salary. Moreover, companies often recruit mature talents, even requiring experience with wafer fabrication, which also leads to the difficulty in forming a social training mechanism and high talent cultivation costs.

Talent loss is another important reason for the shortage of chip talent in China. According to industry insiders, a large number of excellent talents in the chip industry have flowed into finance, the internet, and real estate, and even abroad. Talents turn to seek higher career returns, making the development of the chip industry challenging.The "China Integrated Circuit Industry Talent White Paper (2019-2020 Edition)," compiled by the China Electronics Information Industry Development Research Institute in conjunction with the China Semiconductor Industry Association and other organizations, reveals that in 2019, the voluntary turnover rate in China's integrated circuit industry was 12.51%, a decrease of 1.84% from 2018, but still higher than the healthy turnover rate of 5% to 10%. Among them, the design industry had the lowest voluntary turnover rate at 10.84%, but it increased by 1.01% compared to the same period in 2018.

Some of this talent has also been directed towards developed countries such as the United States. In 2020, the U.S. semiconductor industry supported 1.85 million jobs, employing over 277,000 individuals in research, design, and manufacturing positions. Compared to other industries in the United States, the semiconductor industry employs a higher proportion of non-white workers, with 52% being white, Asians accounting for 28%, and blacks representing 4%.

03

The Other Side of Talent Shortage: Layoffs

On the flip side of the industry's talent crunch is the phenomenon of layoffs.

One significant cause of layoffs is the wave of company closures. According to media reports, in 2023, there have been 10,900 chip-related enterprises in China that have been deregistered or revoked, an increase of 69.8% compared to the previous year, and an 89.7% increase from the 5,746 in 2022; during the same period, 65,700 new chip-related enterprises were registered, an increase of 9.5%. This figure also implies that on average, more than 30 chip-related companies were deregistered or revoked daily in 2023.

For instance, last year, ZEKU CEO Liu Jun announced a company decision that even many directors were not yet aware of—"After careful deliberation, the company has decided to shut down ZEKU and terminate in-house chip development." Consequently, a team of 3,000 people was disbanded on the spot.

It is understood that many chip enterprises were established around 2020, leveraging venture capital to recruit in large numbers at high salaries. However, as funds were depleted and chip enterprises went bankrupt, this also contributed to the wave of layoffs. Only after the tide has receded does one discover who was "swimming naked."

On the other hand, the combination of trade wars, tech wars, and industry cycles has led to supply disruptions and a decrease in orders.

China is not only the world's largest importer of semiconductors but also sees its market share in areas such as new energy vehicles rapidly increasing, where the demand for semiconductor chips is very strong. Under the U.S. sanctions on Chinese chips, in addition to the severe blow to China's chip industry, many foreign companies that have been deeply involved in the Chinese market have also suffered losses.In the early stages of implementing chip export controls against China, the United States added Chinese companies to the entity list, resulting in many American suppliers being unable to provide sales and services to Chinese enterprises.

Furthermore, in recent years, the consumer electronics industry, which is at the downstream demand end, has not seen any significant qualitative leaps in the past few years. The general willingness of users to update and replace electronic products is weak, which in turn has affected the market demand for chips.

As a result, in order to reduce costs and increase efficiency, companies have continuously initiated layoffs.

04

Overall, the demand for talent in the job market is increasing.

Although some positions are experiencing layoffs and salary cuts, while others are seeing recruitment and salary increases, overall, the industry is rapidly developing, and the demand for talent is also growing. This reflects the movement of talent and the rise and fall of industries.

Firstly, talent is gradually converging towards leading companies. Although the semiconductor industry in the Taiwan region of China ranks at the top globally, there is also a significant talent gap, and the demand for talent continues to rise. This is also the reason why TSMC recruits at high salaries. Leading companies, with their strong financial and material resources, can recruit talent more effectively, causing talent to gradually converge.

Secondly, talent is gradually flowing into popular positions. It is understood that the upstream IC design industry has the largest talent gap in key positions: digital IC design engineers, software design engineers, analog IC design engineers, firmware design engineers, and other high-level R&D talents. Among them, the demand for firmware design engineers has a relatively large annual increase, reaching 68.6%.

The demand for talent in the midstream IC manufacturing and downstream packaging and testing is similar to previous years, with a greater demand for talents related to production processes, equipment, and operators. In addition, the demand for firmware design engineers in midstream IC manufacturing has also been continuously increasing recently, with a year-on-year increase of 125.2% in the first quarter of 2022, becoming one of the top five positions with talent gaps in the IC manufacturing industry.

In recent years, due to the popularity of artificial intelligence, related positions have also continued to trigger high-salary recruitment.Finally, talent is gradually flowing towards popular regions. The semiconductor industry has a strong regional clustering characteristic. In popular areas, it is easier for companies to recruit talent, and talent can more easily obtain high salaries. This also further intensifies the flow of talent towards industry-agglomerating regions.

Looking at the regional map of China's integrated circuit industry, four major clusters have been formed, namely the Yangtze River Delta region centered on Shanghai, the Bohai Rim region centered on Beijing, the Pan-Pearl River Delta region centered on Shenzhen, and the central and western regions represented by Wuhan and Xi'an.

The Yangtze River Delta region is the main base for integrated circuit design and manufacturing in China, holding an important position in the domestic integrated circuit industry. With the further promotion of regional collaboration in the Yangtze River Delta, the development of the integrated circuit industry has gradually achieved comprehensive development of the industrial chain, including design, manufacturing, packaging and testing, equipment, and materials.

The Bohai Rim region has a relatively developed integrated circuit design and manufacturing sector, but there are differences in policies, infrastructure, and other aspects, leading to relatively slow coordinated development between regions.

The Pan-Pearl River Delta region is in a leading position in integrated circuit design, with many representative design companies in cities such as Shenzhen and Zhuhai, but the industrial development within the Pan-Pearl River Delta region is more uneven and more apparent.

The central and western regions, relying on good university advantages and industrial policy support, are gradually forming a distinctive central and western cluster of integrated circuits.

According to forecasts by the China Semiconductor Industry Association, in recent years, the supply of professional talent for China's chips has been insufficient, and by 2025, this talent gap is expected to expand to 300,000 people. Overall, the industry faces a shortage of domestic chip talent, a scarcity of high-end chip talent, and difficulties for companies in recruiting. In addition to talent cultivation, how to attract and retain talent has become an urgent task and a top priority for the development of China's semiconductor industry.