Taiwan's chip sector faces critical worker shortage

2025-07-29 tsmc

taipei, Tuesday, 29 July 2025.
Taiwan’s semiconductor industry is facing a significant labor crisis. A new report indicates a shortage of 34,000 workers. The industry’s rapid expansion and global demand are driving the shortfall. Taiwan produces 83 percent of the world’s AI chips. This shortage could threaten Taiwan’s dominance in the global semiconductor market. Major companies like TSMC could struggle to maintain production. The lack of skilled workers may impede future growth and innovation.

Labor shortages across key sectors

The shortage spans critical areas within the semiconductor industry. Production, quality control, and environmental safety roles face approximately 10,000 unfilled positions [1][4][6]. Research and development needs account for 9,316 openings [1]. Operations, technical support, and maintenance roles have 7,240 vacancies [1]. These shortages reflect the increasing demand for skilled personnel to operate and maintain advanced production lines [2]. Recruiting for operations and maintenance is particularly challenging because these positions require shift work and hands-on expertise [2].

Impact on TSMC’s production capacity

TSMC’s (TSM:NYSE) ability to meet global chip demand is directly threatened by this labor shortage [GPT]. The company’s expansion into advanced processes requires a skilled workforce [2]. Without sufficient personnel, TSMC may face difficulties in maintaining its production targets [alert! ‘specific production targets not available in provided sources’]. Reduced output could affect revenue and market share, potentially impacting investor confidence and stock performance. Geopolitical factors further compound these concerns, as stable production is vital for maintaining TSMC’s strategic importance [GPT].

Taiwan’s dominance at risk

Taiwan holds a dominant position in the global foundry market. In 2024, the country accounted for 68.8 percent of the global foundry market [1][2]. Taiwan also leads in IC packaging and testing, holding nearly 50 percent of the market [1][2]. Jeff Lin, general director of ITRI, noted Taiwan’s key role in producing chips at 7 nanometers and below [1][2]. The nation also produces 83 percent of the world’s AI chips [1][2]. A significant labor shortage could erode these advantages, potentially shifting market share to other regions [alert! ‘specific regions not mentioned in the provided sources’] [GPT].

Semiconductor industry expansion and talent gap

Taiwan’s IC industry has seen substantial growth. From 2010 to 2024, the output value tripled [1][2]. However, this growth coincides with a decline in Taiwan’s birth rate. The number of newborns decreased by approximately 20 percent during the same period [1][2]. This demographic trend exacerbates the talent shortage, making it difficult to fill the increasing number of job openings [4]. The industry must attract and retain talent to sustain its growth trajectory [4].

Rising salaries and in-demand skills

The semiconductor industry offers competitive salaries. Analog IC design engineers in non-managerial roles earn a median annual salary of NT$1.78 million (US$60,292) [1]. Hardware engineering R&D managers earn a median annual salary of NT$1.81 million [4]. Despite these high salaries, attracting and retaining talent remains a challenge [6]. Companies are seeking individuals with cross-domain integration skills, international experience, and product development capabilities [6]. The industry is actively seeking solutions to bridge the talent gap and maintain its competitive edge [GPT].

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labor shortage semiconductor industry