Semiconductor firms in Singapore face acute talent crunch as they invest billions to create jobs

SINGAPORE’S semiconductor industry is facing an acute talent crunch, even as chipmakers invest billions to expand their operations and create thousands of jobs in the city state.

“Unfortunately, the local talent pool here is small. We are competing with many other industries for talent,” Ang Wee Seng, executive director of the Singapore Semiconductor Industry Association (SSIA), told The Business Times.

“We need to communicate the excitement and continuous growth of the semiconductor industry to potential young talent and job seekers,” he said, adding that companies are struggling to recruit the right people for the job.

Indeed, Singapore’s semiconductor industry is poised for growth, with recent billion-dollar investments that promise to create hundreds, if not thousands, of jobs.

The government has been eager to woo “frontier investments”, including from global semiconductor firms, as part of its Manufacturing 2030 plan announced early last year. The plan aims to grow Singapore’s manufacturing sector by 50 per cent while maintaining its share of gross domestic product (GDP) at 20 per cent.

Some of the larger investments from last year include that of American semiconductor firm GlobalFoundries, which committed US$4 billion alongside 1,000 jobs, and German wafer manufacturer Siltronic with S$3 billion and 600 jobs. American memory chipmaker Micron, which announced a global investment sum of US$150 billion, did not specify a Singapore investment figure but said it was aiming to create 1,500 jobs in the Republic.

These investments come as companies aim to significantly ramp up production capacity amid a persistent global chip shortage – an endeavour that is expensive and will take a long time, said industry watchers.

At the same time, a talent shortage is inevitable as companies look to hire the best talent with the most relevant skills.

In particular, the industry needs more skilled operations talent, circuit designers, scientists and those with knowledge in emerging technologies, said Rakesh Agarwal, advisor partner at KPMG in Singapore. “One of the biggest shortages in the industry is the lack of scientists in the field. We continue to see an increased demand for scientists in countries leading the production of semiconductor chips.” Operators, technicians and engineers with various experience levels are also in shortage due to rising demand, he said, adding: “Increasingly, we see a shortage of integrated circuit designers because of the lack of interest in the role.”

Industry players say the semiconductor field faces its fair share of misconceptions, with many people assuming the work is carried out in a “harsh environment with the need to suit up” and that there are long working hours.

“This is far from the truth. The semiconductor ecosystem covers a wide range of sectors, including IC (integrated circuit) design, equipment manufacturing, chemical and materials and many more. This industry is leading the way when it comes to Industry 4.0 adoption,” said SSIA’s Ang.

Concurring, Valerie Lee, human resources head for Singapore and Philippines at Austrian electronics company ams Osram, said the industry must keep promoting the idea that there are many opportunities to work with the latest technologies in a “modern manufacturing setting”.

One way to get workers invested in the world of semiconductors, said Paul Boudre, chief executive of French chipmaker Soitec, is to share with them the purpose of the company, its plans for the next 5 to 10 years, and what it is doing for sustainability.

“They should realise that through this industry, they can continue to change the world,” he said.

“When you think about climate change, semiconductors have a big role to play,” he added. This is because other than being an integral part of electrification, microelectronics help to enable low-power capability and energy efficiency.

Kwan Yit Wei, associate director for construction, property and engineering at Randstad Singapore, noted that manufacturing talent are often attracted to companies that have robust expansion plans.

“It means that they will have a chance to pioneer a new project or set up a new plant. These jobs give them opportunities to acquire new skills and grow in their careers,” said Kwan.

For now, human resources (HR) specialists said there are several ways companies can fill their vacancies.

“Given that these would be new headcount rather than replacement hiring, semiconductor companies will need to develop stronger talent retention strategies to retain their current workforce on top of talent attraction programs to stand out from their competitors,” said Kris Tan, associate director of Michael Page Singapore.

Hannah Nguyen, senior career consultant for rewards at Mercer, said in the short run, companies can consider offering better wages or other benefits such as flexible working hours or additional training.

Another important channel is upskilling and reskilling employees, with KPMG’s Agarwal seeing this as an effective short-term strategy to ramp up manpower supply. For example, employees can access online classes at their own pace in areas not limited to their job scopes.

In the long run though, said Nguyen, companies should focus on building a sustainable talent pipeline.

Many companies are already working with local institutions to boost talent development – for example, through internships or support programmes for researchers.

When companies plan their hiring around graduating timelines, they will have a more constant and consistent inflow of talent to better plan their manpower needs, said Randstad’s Kwan.

At the same time, employers should consider being more flexible in their requirements, he said: “Employers also have very high expectations and are often looking for people who can fulfil all their requirements because they need someone who can hit the ground running as soon as possible.”

“Rather than trying to find a unicorn candidate who meets all the job requirements, it would be better to hire someone who has relevant work experience and fundamental skills, and then get them up to speed by providing training on the company’s systems and processes as part of the onboarding process,” he added.

Given the tight labour market – overall job vacancies hit a new high in the first quarter – one might ask why companies are still placing their bets here, beyond oft-cited reasons like the pro-business environment and political stability.

Walter Theseira, associate professor of economics at the Singapore University of Social Sciences, said employers tend to want to invest in places where labour conditions are healthy to tight, rather than very poor.

“A strong labour market means that overall, the local economy and workforce is likely to be more competitive and dynamic, so you can get better talent,” said Dr Theseira.

“In fact, Singapore does not want to attract companies motivated primarily by surplus low-cost labour, as that is a business model more suited for developing countries,” he added.

From a policy standpoint, the efficiency and competitiveness of the economy can also be improved by continually attracting better investments, as this provides new career choices for Singaporeans, he said.

“This is important even if it may come at the expense of existing firms who employ the skilled workers, because it’s better for our own industries to hire away their workers and displace them, than for market forces globally to do the same thing eventually,” he said. “In the latter case, that would create unemployment and a loss of skills and capabilities.”