Biden Proposes $5 Billion Plan to Alleviate Labor Shortages Among US Chipmakers

Amidst the ongoing struggle of US chipmakers to find enough trained personnel to meet the escalating demand, the Biden administration has rolled out a $5 billion initiative to remedy the workforce deficit. The White House announced on Friday its intentions to deploy this investment towards a public-private consortium, focused on fostering research and development in sophisticated computer chips.

Integral to this initiative is the establishment of the National Semiconductor Technology Center (NSTC), which will primarily establish a "Workforce Center of Excellence". This center will have its operations rooted in various parts of the US, in order to stimulate the training of more semiconductor professionals. The investment will fund this center with hundreds of millions of dollars.

Commerce Secretary Gina Raimondo underlined the importance of this workforce training, stating that all semiconductor companies acknowledged their success was dependent on an ample supply of highly trained, industry-ready employees.

The effectiveness of the new project in addressing recruitment concerns, a major hindrance to the growth of US chipmaking, remains to be seen. Until this plan was introduced, the responsibility of training workers was borne by state and local authorities and the companies themselves. However, regular cautions were given that such measures would not suffice, necessitating more radical policy action.

As immigration as a solution is currently ruled out due to political factors in Washington, the emphasis has shifted to training fresh workforce. Arizona is poised to emerge as a prominent hub for the increasing US chip sector despite being currently hampered by labor issues. Delays in plant launches by established companies have been attributed to deficiencies in skilled workers.

The White House aims to not only initiate new programs, but also to maximize successful local training efforts as part of their workforce plan. This will include supporting the manufacturing capabilities and the nascent R&D projects.

Through these efforts, the Biden administration aims to revive the US semiconductor industry, which has witnessed a decline in the last few decades. The share of American semiconductor manufacturing in the global market has reduced from approximately 40% in 1990 to less than 10% today. The manufacturing of the world’s most advanced semiconductors are carried out entirely overseas, a trend that the current US construction projects hope to overturn.

President Biden enacted the CHIPS and Science Act on Aug. 9, 2022, committing roughly $50 billion as grants to the semiconductor sector. These funds are divided, with $39 billion earmarked for manufacturers and $11 billion designated for chip research and design.

Friday’s announcement revolved around the NSTC, defined as the cornerstone of the administration’s R&D efforts. The remainder of the grants, primarily directed at companies, are yet to be allocated, with further details expected to be released within two months. Aiming to address the looming workforce crisis, the current plan aims to lay a solid foundation for the future of the US chipmaking industry.