The American semiconductor boom faces a formidable obstacle: a lack of immigrants

The United States is witnessing a boom in semiconductor production after the passage of the Potato Chips Act, but this progress may be hampered by a serious labor shortage in the industry.

according to July report According to the Semiconductor Industry Association, an industry trade group, and Oxford Economics, there will be 85,000 new technical jobs in the industry by 2030. But the report projects that nearly 80% of these jobs may remain unfilled.

Importantly, one-third of the semiconductor industry’s workforce is foreign-born, meaning immigration hurdles exacerbate the shortage.

In July, Taiwan’s TSMC (TSM), which was scheduled to open its first factory in Arizona in 2024, Announce The semiconductor giant will be delayed by another year due to a shortage of specialized workers.

“While we are working to improve the situation, including sending experienced technicians from Taiwan to train local skilled workers for a short period of time, we expect the N4 processing technology production schedule to be pushed back to 2025,” said TSMC Chairman Mark Liu. he said on the company’s second-quarter earnings call.

Many foreign-born skilled workers are already studying in the United States, but current immigration laws make it difficult for them to stay.

“It is very difficult to imagine that we will be able to build a semiconductor industry in the future if we do not reform our immigration law,” Todd Schulte, president of the immigration and criminal justice reform advocacy organization FWD.us, told Yahoo Finance.

a New analysis FWD.us found that about 5,000 international students in the United States will graduate next school year with advanced degrees in computer science and semiconductor-related engineering fields. At least 4,000 of these students have expressed their desire to remain in the United States.

“If you need to build these semiconductor factories, you need a certain group of workers,” Schulte said. “You can get that in the United States, or you can get it in other places here. The idea that jobs are a fixed entity — if they don’t exist for one person, they will exist for another person — is just not true.”

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“I think you see that,” he continued. “I’ve seen chip manufacturers say, ‘We need this workforce.’ “We want to build in the United States for many reasons here, but we need an immigration system that is not built from the mid-20th century,” that is, an immigration system that allows our country to respond to the economic needs of the United States. mid-twenty-first century.”

Immigration system ‘designed in the 1950s’

Work permit is the main challenge. For example, the U.S. government allocates the H-1B visa to about 65,000 qualified individuals annually, plus an additional 20,000 to master’s degree holders. This limit has been in effect since 2006.

According to the American Immigration CouncilIf United States Citizenship and Immigration Services (USCIS) receives more registrations than available visa numbers, the agency will conduct a lottery to determine who can file an H-1B petition. …The agency selects more registrations than available visa numbers based on its projections of the number of selected employers who will They will file petitions and receive USCIS approval.

Aside from limited periods, other immigration hurdles include slow processing times, regulations and paperwork, and the cost of visa sponsorship. a March 2023 report Envoy Global, a global immigration services provider, found that 94% of companies would be willing to sponsor foreign nationals for a work visa if they faced fewer challenges, while 80% of companies have moved their employees to work remotely outside the US because of the visa. Related issues.

“The last time we had a real substantive modernization of our legal immigration system [was] “In 1990,” Schulte said. “It was before the end of the Cold War. It was before the advent of the World Wide Web. It was before the rise of China and India and the global middle class in many respects here. We have an immigration system that was basically designed in the 1950s and 1960s and was modified in 1990 before the Many of the economic needs we have today are evident.

‘No An option other than easing immigration policies

Reforming the US immigration system would not only help the semiconductor industry, but research shows that it would be a boon to the US economy as a whole as well.

according to no limitsan immigration technology company, immigrants paid more than $330.7 billion in U.S. federal income taxes in 2019 and more than $492 billion in total taxes.

“The broader story is that over the last decade, the only reason the U.S. population has grown is because of immigration,” Greg Wright, a nonresident fellow at the Brookings Institution and associate professor of economics at the University of California, Merced, told Yahoo. finance.

“All over the developed world, you see populations shrinking, especially in southern Europe and Japan,” he added. There are countries that already suffer from these problems with declining populations and inverting the demographic pyramid. You can call it population aging. The United States hasn’t really had this problem yet, but the only reason is immigration.

Between 2005 and 2022, the immigrant population in the United States has increased I slept Nearly 30% for more than 46 million people, according to the U.S. Census Bureau. As of 2022, foreign-born Americans make up 13.9% of the total population.

On the other hand, native-born Americans have fewer children, while many older individuals are falling out of the labor force due to aging, further widening the country’s employment gap.

“It has already come to a head, but people will realize there is no choice but to ease immigration policies,” Wright said.

Talent Retention and the CHIPS Act

Without comprehensive immigration reform, FWD.us’s Schulte warned that potential talent will choose places other than the United States, especially in semiconductors, an industry that is increasingly in demand.

After the bipartisan CHIPS Act was signed into law last August, Investing companies $210 billion in more than 50 new semiconductor projects by the end of last year.

“We will no longer be able to attract the best talent from around the world virtually,” he added. “That’s been the case for a really long time. But if you look at what our other economic competitors have done in many cases, they’ve modernized their immigration laws, their immigration system, in a way that tries to compete with the United States.”

The United States is home to seven of the world’s ten largest semiconductor companies By market value, including the major company Nvidia (NVDA). The Taiwanese company TSMC ranked second, while the South Korean company Samsung came in fourth place.

“We are clearly at the forefront of a number of scientific efforts that have the potential to be truly revolutionary right now — artificial intelligence, building biomedical research, clean energy, the decarbonized economy,” Schulte said. “These are things that have the potential in different ways to change the world for decades to come.”

Schulte believes that the main question is whether the United States is able to design a system that “allows us to have a workforce that enables us to lead the world in education and innovation and move forward in these areas.”

“I think that’s what we’re really focusing on trying to highlight is that this is not going to happen virtually,” he said.

Adriana Belmont is a reporter and editor covering politics and health care policy at Yahoo Finance. You can follow her on Twitter @adrianambells Contact her at [email protected].

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