“The world took notice of Taiwan because of its semiconductor industry. But now, enterprises are finding it increasingly difficult to find good employees,” lamented Chen Shu-chu, deputy director-general of the Hsinchu Science Park Bureau, in a conversation with Lianhe Zaobao.
Chen, who has 40 years of experience at the bureau, sees that there is a serious deficit of talent and the younger workers of today are less devoted to their work and more concerned about work-life balance.
She said, “Working in the semiconductor industry is tough because production does not stop. We do not follow office hours and often work overtime. Hence, few university graduates are willing to enter this industry.”
Mass hiring and record number of job openings
In the last three years, the global semiconductor industry has seen rapid growth with the advent of 5G communication networks, artificial intelligence and electric vehicles (EV), not to mention work-from-home arrangements and home entertainment made mainstream by the Covid-19 pandemic.
In the short term, the semiconductor industry will see pandemic-induced strong growth followed by a sharp drop in demand, but market demand will continue to expand in the long term.
SEMI, an industry association representing the global electronics product design and manufacturing supply chain, reported in April that worldwide sales of semiconductor manufacturing equipment in 2021 surged 44% year-on-year to an all-time record of US$102.6 billion, while the sales of raw materials also increased by a record 16%.
In July, SEMI also forecast that global sales of total semiconductor manufacturing equipment by original equipment manufacturers would increase 14.7% year-on-year to reach a record US$117.5 billion in 2022, and increase 2.8% year-on-year to US$120.8 billion in 2023. In the short term, the semiconductor industry will see pandemic-induced strong growth followed by a sharp drop in demand, but market demand will continue to expand in the long term.
In order to gain the first-mover advantage and seize the market, Taiwan’s semiconductor industry has already accelerated production expansion and launched a large-scale recruitment drive. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, revealed in June that 11 twelve-inch wafer fabrication plants will be built in Taiwan over the next two years. Meanwhile, in early September the company launched a recruitment campaign to hire 1,500 new master’s and PhD graduates in 2023. TSMC also plans to hire over 8,000 workers this year to meet its business growth and technology development needs.
Other tech enterprises such as leading computer chipmaker United Microelectronics Corporation and Foxconn, the world’s largest contract electronics manufacturer rapidly expanding into the EV and semiconductor industries in recent years, are expected to hire 2,000 and 1,500 workers respectively this year.
Foreign semiconductor enterprises have also expanded their investments in Taiwan. Among them, ASML Holding NV, the world’s top maker of lithography systems, plans to hire around 1,200 workers this year, bringing its Taiwan workforce to 4,500. Micron, one of the world’s largest memory chipmakers, announced in June that it would expand its investment and hire 2,000 employees in Taiwan within the next two to three years.
According to data from Taiwanese job search site 104 Job Bank, the number of job openings across the site reached a record 1,017,000 in September, with the talent gap being the widest in electronics, information, software and semiconductor enterprises, which offered a record 189,000 positions.
However, Taiwan’s shortage of local semiconductor talents underlies this wave of mass recruitment. Chen explained, “Leading semiconductor manufacturers such as TSMC along with several upstream and downstream manufacturers have been expanding their factories. But there aren’t that many people studying electrical and electronic engineering in Taiwan.”
The development of the semiconductor industry in Taiwan began in the 1960s and accelerated in the 1970s and 1980s with government support. In that era, graduates of prestigious high schools in Taiwan would pursue a degree in electrical engineering or related fields at the university. Some of them have now become important figures in Taiwan’s semiconductor industry, such as TSMC chair Mark Liu and MediaTek vice-chair and CEO Rick Tsai.
... the number of STEM-major college students peaked at 506,000 in the 2006 academic year but has since declined from 486,000 in 2010 to 383,000 in 2019 — losing more than 100,000 students within a decade.
Yet, following the decline in science, technology, engineering and mathematics (STEM) graduates in Taiwan, it seems that Taiwan’s advantage of nurturing generations of semiconductor talents is fading away.
Statistics from Taiwan’s Ministry of Education show that the number of STEM-major college students peaked at 506,000 in the 2006 academic year but has since declined from 486,000 in 2010 to 383,000 in 2019 — losing more than 100,000 students within a decade. The proportion of STEM-major college students also dropped by 4.59 percentage points from 36.17% in 2010 to 31.58% in 2019.
Taiwan’s education ministry analysed that the decline in STEM students could be due to the boom in the hospitality and tourism, digital animation and cultural and creative products industries, drawing away potential STEM students. Also, some asset management and electrical and electronic engineering departments have had to restructure or freeze student recruitment as they adapt to Taiwan’s decreasing birth rate and the shift towards advanced technology and labour requirements in industrial application and research and development (R&D).
Abundant resources, short on talents
Distinguished Professor Chang Yao-Wen, dean of National Taiwan University’s College of Electrical Engineering and Computer Science and leading expert in electronic design automation, said that the mid- to high-level professionals in the semiconductor industry, in particular, must have strong expertise in mathematical physics to conduct advanced technical and innovative work. But the semiconductor sector is dealt a massive blow with the shrinking talent pool.
Chang said, “One outstanding talent is better than three, ten or even 100 mediocre workers.” He emphasised that enterprises need to hire quality talents to maintain their competitive edge and develop sustainably. But unfortunately, there are serious issues with Taiwan’s education system that are affecting the talent supply.
Chang, who was a technical consultant for leading mobile chipmaker MediaTek, said that Taiwan began educational reforms in the 1990s to relieve academic pressure and enhance its people’s general knowledge. One of the measures taken was the setting up of more universities to increase the number of college students.
According to Taiwan’s National Development Council, Taiwan established 69 new universities over the past two decades. As of 2021, there were 126 universities in Taiwan, as well as 11 colleges and 12 vocational schools.
The fundamental reason for the lack of semiconductor talents is Taiwan’s low birth rate.
According to Taiwan’s Ministry of the Interior, as of the end of 2021, there were 9.83 million people with a college degree or higher in Taiwan, an average annual growth rate of 3.1% over the past decade. However, Taiwan reported a record university acceptance rate of 98.94% this year, triggering strong criticisms that university degrees are no longer valuable as it doesn’t take much effort to enter university.
Not only that, resources are limited despite the increase in the number of universities. Chang said, “In terms of funding distribution for Taiwan’s tertiary education, many projects get equal treatment regardless of circumstances.” He explained that funding by Taiwan’s education ministry is sometimes allocated according to student numbers, so Taiwan’s top institution National Taiwan University (NTU) would essentially get the same amount of funding as other institutions that lack international competitiveness. “How can talents be nurtured like this?” Chang lamented.
The fundamental reason for the lack of semiconductor talents is Taiwan’s low birth rate. The general consensus is that the Taiwanese are less willing to have children due to factors such as high property prices, income not keeping up with inflation, and busy work schedules.
In April 2021, Taiwan ranked at the bottom of 227 countries and territories in the US Central Intelligence Agency’s report on global birth rates.
In 2021, Taiwan saw continued negative population growth with 183,732 deaths and 153,820 births — which fell below 160,000 for the first time. Taiwan’s National Development Council forecasts that this year’s births will slip further to 130,000.
Chang is pessimistic about the outlook of Taiwan’s semiconductor industry. He questioned, “As the population shrinks, so will the number of STEM students. If this goes on, where will the semiconductor industry get its people?”
Hire foreign talent but simplify residency process
As the falling birth rate becomes more pronounced and the number of talents in Taiwan’s semiconductor industry dwindles, Professor Lee Swee-Huat of National Chengchi University College of Commerce and a former TSMC vice president of human resources, believes that besides actively nurturing local talent, attracting foreign talent is another solution.
“I think this is a good thing,” Lee said about the Taiwan government’s focus on resolving the shortage of talent, including setting up educational agencies targeted at nurturing talents in the semiconductor industry over the past year.
In May 2021, Taiwan’s Legislative Yuan passed the Statute for Industrial Innovation for cooperation in select sectors and talent development, to get universities and companies to work together to set up research institutes and develop the necessary high-calibre scientific and technological talents.
Subsequently, NTU’s Graduate School of Advanced Technology, National Tsing Hua University’s College of Semiconductor Research, National Yang Ming Chiao Tung University’s School of Industrial Innovation, and National Cheng Kung University’s Academy of Innovative Semiconductor and Sustainable Manufacturing were established, with each institute nurturing around 100 high-calibre R&D talents every year.
However, Lee believes that these institutions cannot just focus on developing talents on the technical and professional level, but the curriculum should also include soft skills, such as communication and resilience.
He shared, “Improving their all-round capabilities is not just about resolving basic professional needs. We should also consider that they might be at the management level in 10 or 20 years. That is important.”
Foreigners living in Taiwan often criticise the complex process of Taiwan’s residency application.
Lee worked at TSMC for six years and was in senior management positions with several international companies. He suggested resolving Taiwan’s talent shortage with foreign talent, including following the US way of simplifying the residency process, to attract talents willing to work or study in Taiwan. Foreigners living in Taiwan often criticise the complex process of Taiwan’s residency application.
Furthermore, foreigners in Taiwan also face problems and inconveniences in their daily lives. Lee is a Singaporean who has lived in Taiwan for over 20 years, and he shared his firsthand experience. He said, “The serial numbers on residence permits for foreigners are different from those for Taiwanese; there is only one English letter before the serial number for locals, but there are two for foreigners. So, when foreigners in Taiwan have to process documents or do online purchases, oftentimes it doesn’t go through. But this minor issue has recently been resolved.”
According to Taiwan media, from 2 January 2021, residence permits for foreigners have followed the same format as the identification for Taiwanese citizens. Nevertheless, Lee said that there are still many related issues that the Taiwanese government needs to address. Providing more convenient services for foreign workers would make life in Taiwan more comfortable and encourage them to stay long term.
Lee also observed that many Taiwanese companies prefer to hire locals, mainly to avoid communication or cultural barriers.
But with Taiwan’s falling birth rate, he believes that companies will still need to bring in international talents to fill the gap in the long run, otherwise, future operations will be hampered and costs will also go up.
He suggested that Taiwanese companies could improve their workplace culture, especially in recruiting talents regardless of seniority. “Taiwan gives weight to rank and seniority, and this could cause some culture clash for foreigners,” Lee added.
... he and many of his peers believed that salary is no longer the top consideration in job-seeking — work-life balance takes priority.
Taiwan’s young people value work-life balance
As part of an international media group invited by Taiwan’s Ministry of Foreign Affairs, I stepped into the 686-hectare Hsinchu Science Park on the afternoon of 27 September
The monotone blocks of semiconductor manufacturing facilities looked at odds with the lively groups of young people walking on the grounds and sitting in the shade having a chat or a smoke. Despite the juxtaposition of the two, the cold, hard tech industry needs a constant stream of new blood to maintain its innovation.
However, is the stream of new blood in Taiwan’s tech industry slowing down? My interactions with our young guide gave me a good feel of the situation.
This fresh-faced, bespectacled young man in his 20s recently graduated from a well-known institution where he read electrical engineering, and currently works at the Hsinchu Science Park Administration. He revealed that while some of his classmates work at semiconductor companies for decent salaries, he and many of his peers believed that salary is no longer the top consideration in job-seeking — work-life balance takes priority.
“I feel that it is more important to live comfortably. I don’t really care for a high salary,” our guide shared.
Without young people who are willing to work hard, the semiconductor sector would lack a strong support and drive for its expansion amid the industry’s growth.
This is the mindset of Taiwan’s younger generation. Driven by the semiconductor industry, Taiwan’s economy has grown against the tide of the pandemic. However, weakening demographic dividends have somewhat dragged down the economic engine.
At the same time, the rising cost of living, social division, and a general climate of intense competition have led to a sense of helplessness among the youths, who turn to seek the “small wins” in life, which generally means doing little things that make them happy, amid a lack of confidence in politics and the economy.
Without young people who are willing to work hard, the semiconductor sector would lack a strong support and drive for its expansion amid the industry’s growth.
TSMC chair Mark Liu once said, “Our young people have to realise that they will be a key force in changing Taiwan society.” Without that realisation, Taiwan’s future will be bleak.
This article was first published in Lianhe Zaobao as “台半导体产业缺人才打江山”.
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