How the electronic-components industry can benefit from Silicon Valley layoffs
By Jens Gamperl, founder and CEO, Sourceability
The electronic-components industry has experienced significant growth in recent years, driven by the increasing demand for advanced electronics and the rise of the Internet of Things (IoT) market. As essential building blocks of modern electronic devices, the demand will continue growing, with the global electronic-components market projected to reach $805.88 billion by 2026. The industry's growth presents significant opportunities for businesses to innovate and capitalize on emerging technologies, but the industry needs more skilled workers in order for that to happen.
The electronic-components industry faces a significant challenge in attracting and retaining top talent with specialized skills. Tech giants have typically scooped up software-skilled workers right after graduation. However, the electronic-components industry is in the midst of a unique opportunity. Google, Microsoft, Amazon and other tech companies have laid off more than 70,000 employees in the last year. By pairing these workers’ existing knowledge of AI and automation with on-the-job training opportunities, the chip industry can make the most of the newly available talent coming from the tech industry.
Competing with traditional semiconductor-factory markets
Compared to locations like China, India and Vietnam, the US has a smaller tech labor pool. To address this issue and compete with these markets in the long term, semiconductor facilities in the US have focused on automation as a solution. Although designed to minimize human intervention, automated processes still necessitate human supervision to oversee the software and hardware. These processes still depend on human input to make ultimate decisions.
This labor shortage has contributed to delays in the construction of large chip-fab facilities, as there are not enough qualified candidates to fill the necessary roles. To address this issue, some companies have started investing in training-and-development programs to upskill their existing workforce and attract new talent to the industry. Having adjacent skills that are relevant to the industry can help ease the crossover. For example, someone who is experienced in data analysis and familiar with the statistical-analysis software JMP can be more easily trained to become a reliability engineer at a semiconductor factory.
Making the industry appealing to newcomers
Recently displaced tech workers from Silicon Valley could make a career shift to the electronic-components industry and help fill the talent gap, but other tech-adjacent sectors are also looking to access this growing talent pool. Since the chips industry competes with other sectors to attract these workers, such as farm equipment manufacturers, how can this industry stand apart?
Tapping into a pool of tech experts that were previously unavailable means offering incentives to entice former Silicon Valley employees to join their ranks. This month, the Commerce Department announced that any semiconductor manufacturer seeking to access the nearly $40 billion in new federal subsidies will need to provide affordable and accessible childcare for workers who build or operate a plant. That new offering alone will be a strong enticement for parents coming from the tech sector.
Coupling strong benefits with competitive compensation packages is already a very strong offering, but these skilled workers will also be looking for opportunities for skill development, career advancement, and mentoring, along with the flexible work environment they came to expect during the COVID-19 pandemic. Offering the ability to work remotely or set a hybrid working schedule can be appealing to workers who are searching for a company culture that will prioritize employee input on their ideal working conditions.
Emphasizing the significance of this moment
For those who haven’t previously been involved in the electronic-components industry, companies should highlight for them the economic and societal impact of the industry. The COVID-19 pandemic brought to the forefront how vulnerable the global supply chain is to disruptions. Since then, the US government and business leaders have been working to bring semiconductor manufacturing back from abroad to strengthen American supply chains with domestic manufacturing.
In 2022, President Biden signed the bipartisan CHIPS and Science Act into law, which includes more than $50 billion specifically for semiconductor manufacturing, which has been called “the most significant piece of legislation in industrial policy since World War II.” Communicating with prospective candidates about the essential nature of this industry as it charts a new path forward can be key for recruitment.
only 50% of major global corporations use artificial intelligence, IoT, and advanced analytics in their supply-chain operations, but eventually all will need to invest in this technology.
Ultimately, the layoffs in the tech industry have been “the biggest purge of tech talent since the dot-com crash of the late 1990s.” Building a robust semiconductor-manufacturing foundation in the US will significantly benefit from these newly available candidates’ invaluable experience and expertise. By taking advantage of this new talent pool, the industry can continue to grow and innovate, contributing to developing cutting-edge technologies while advancing the global economy.
