A severe shortage of engineers and technicians is a bigger headache for Taiwan’s semiconductor companies than excessive inventory in the supply chain. It could take a few quarters for customers to level off chip gluts overbuilt in fear of supply disruption due to COVID-19 restrictions. Talent drain, however, poses greater and longer-term risks for chip companies, as upgrades to next-generation technology and capacity expansion are likely to be hampered, leading to weakness in competitiveness.
The inventory-driven downcycle did not hinder Taiwan Semiconductor Manufacturing Co’s (TSMC) growth. The world’s largest contract chipmaker even raised its revenue forecast for this year, saying that revenue is expected to expand about 35 percent annually, outpacing its earlier estimate of 30 percent year-on-year.
“Customer demand continues to exceed our ability to supply. We expect our capacity to remain tight through this year,” TSMC chief executive officer C.C. Wei (魏哲家) told investors last month.
TSMC, which counts Apple Inc, AMD and Nvidia Inc as major customers, said its capacity utilization should remain healthy next year, although customers are expected to continue digesting chip stockpiles through the first half of next year.
Given its customers’ commitment, the chipmaker does not plan to slow its pace in capacity expansion and technology upgrades, keeping its record-high capital spending almost intact for this year in a range between US$40 billion and US$44 billion. TSMC said its capital budget is based on customer demand over the next several years and would not be affected by a short-term demand slump.
Talent acquisition, however, continues to be a challenge for local chip companies, even for large-scale companies like TSMC. The supply-demand imbalance remains an issue, and recruitment is likely to continue to be difficult over the next three years, the online human resources firm 104 Job Bank said on Monday last week.
A semiconductor talent gap in the first quarter surged 39.8 percent year-on-year to 35,000 people, hitting a record high, according to a survey released by the job consultancy.
Semiconductor companies from smartphone chip designer MediaTek Inc to chipmakers TSMC, United Microelectronics Corp and chip packager ASE Technology Holding Co are launching massive recruitment drives with targets in the thousands, the job agency said. TSMC said it plans to hire more than 8,000 workers this year.
With scant local semiconductor talent supply, companies are trying any approach to expand their talent pools. Some companies, such as memorychip maker Micron Memory Taiwan Co and semiconductor equipment supplier ASML Technology Taiwan Ltd, extended talent hunt activities overseas, targeting graduates in science and engineering from Southeast Asian countries.
More than that, technology companies have become more willing to open their doors to job applicants with liberal arts degrees if they are willing to be trained and take classes related to computer science and engineering.
To retain talent and fend off poaching, local semiconductor firms have raised overall compensation through salary hikes and improving bonus schemes. Local technology companies last year raised workers’ monthly salaries by an average of 4.7 percent to NT$54,729 from the previous year. That was the biggest raise in the nation’s electronics industry, with pay raises between 10 percent and 20 percent for key talent being a must, the job agency said.
As the US, Europe and Japan are all attempting to build chip factories at home to maintain supply chain resilience and prevent the chip crunch of the past two years from harming customers — especially in the auto industry — the fight for talent will only intensify.
Chinese agents often target Taiwanese officials who are motivated by financial gain rather than ideology, while people who are found guilty of spying face lenient punishments in Taiwan, a researcher said on Tuesday. While the law says that foreign agents can be sentenced to death, people who are convicted of spying for Beijing often serve less than nine months in prison because Taiwan does not formally recognize China as a foreign nation, Institute for National Defense and Security Research fellow Su Tzu-yun (蘇紫雲) said. Many officials and military personnel sell information to China believing it to be of little value, unaware that
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