What does the Chips and Science Act mean for employers?

Still hurting from the computer chip shortage? Well, $280 billion worth of subsidies and funding is about to be introduced into the US market.

While the majority of that cash will support cutting-edge research, more than $52 billion will go to bolstering US semiconductor manufacturing. Recently signed into law by President Biden, the Chips and Science Act aims to help tech companies build new plants and expand existing facilities, as well as continue research into chip technology.

Companies including Intel and Samsung have already announced plans to build plants in the US based on this legislation. The funding also creates an investment tax credit of 25% for companies that invest in semiconductor manufacturing.

The hope is that this will draw more US companies to contribute to the growth of this sector, but it's likely the legislation will also have a big impact on today’s job market.

Why the focus on semiconductor chips?

The dangers of chip shortages was felt across the US during the COVID-19 pandemic. The demand for semiconductor chips surged – right as supply chain disruptions and geopolitics impacted the supply. The automotive industry was hit hardest, making it impossible for companies to meet production demands in 2020 and 2021.

The vast majority of semiconductors are currently manufactured overseas. Industry leaders became more vocal about the need to manufacture chips domestically, putting pressure on the government to take action through funding and new laws.

Supporters of this legislation say that this exposes the US to security risks and could have long-term impact on US competitiveness in the global market. (While semiconductor technology was first developed in the US, but the global share of chips made in the US has declined from 37% in the 90s to just 12% today. China, South Korea, and Taiwan now dominate the production market.)

Many experts though are worried that the benefits of the new funding will be mostly for big manufacturers, like Intel who lobbied heavily for the bill. Another beneficiary will likely be Taiwan Semiconductor Manufacturing Company (TSMC), whose chairman House Speak Nancy Pelosi met with during her controversial trip to Taiwan. 

What does this mean for employers?

It will likely take years for the US chip production to alleviate the current shortage, so consumers shouldn't expect to see a difference soon. While many say the new funding will be a big step in staying competitive, particularly with China, others aren't sure how much it will impact US reliance on foreign suppliers. 

The US is already facing a hiring shortage for roles key to manufacturing and tech, and this may become more evident as semiconductor production expands. Reports say that the US will need to fill about 300,000 new fabrication jobs to sustain domestic chip production.

The job market for the highly-skilled professionals in this field is already extremely competitive, and operations in the US are already struggling to recruit workers. TSMC, which began building a new $12 billion facility in Arizona last year, has been vocal about facing talent shortages for both engineers and technicians. That means as chip production ramps up domestically, other employers in manufacturing, distribution, electronics, and the automotive sectors may need to out-bid each other for talent at all levels of their organization.

Adecco can help

Despite these possible hurdles, employers are remaining positive about the amount of employment that this funding will generate, and the added jobs that Americans will have access to. Upskilling, diversity initiatives, and automation might be the most effective ways for chip manufacturers to meet their recruitment needs for the time being.

Putting those programs into place though is a challenge, especially during an already difficult market. If you’re unsure how your company will meet its talent needs in an uncertain economy, Adecco can help. We have decades of experience helping businesses just like yours quickly hire qualified candidates and expand their operations with temporary talent. Contact us today to learn how we can support your team.