trump's chip dreams face reality check: talent pool dries up

2025-02-25 general

Washington, Tuesday, 25 February 2025.
president trump’s ambition to revitalize the us semiconductor industry is hitting a major roadblock. expiring contracts of over 1,000 taiwanese engineers at tsmc in arizona coupled with allegations of a ‘brutal’ management style are deterring american talent. huawei-linked recruiters are poaching former tsmc staff with triple-salary offers. can america secure the skilled workforce needed to compete in the global chip race, or will trump’s plans falter?

tsmc’s arizona struggles

Taiwan Semiconductor Manufacturing Co. (TSMC) is at the center of this challenge [1]. The company brought over 1,000 Taiwanese engineers to Arizona on three-year contracts to stabilize chip yields [1]. As these contracts expire, many engineers are eager to return to Taiwan, according to Edy Tang, co-founder of SemiVision [1]. A headhunter executive noted the difficulty in retaining these employees [1]. This exodus exacerbates the talent shortage, potentially impacting TSMC’s production targets and, consequently, its stock value [1].

discriminatory lawsuits and management style

Adding to TSMC’s woes, over a dozen current and former employees are suing the company in a class action lawsuit, alleging discriminatory hiring practices [1]. Some describe TSMC’s management style as ‘brutal’, further deterring American workers [1]. Jett Chen, a SemiVision analyst, suggests that Trump’s ending of birthright citizenship could remove incentives for Taiwanese engineers who hoped to start families in the U.S. [1]. These factors collectively paint a concerning picture for investors, potentially leading to a reassessment of TSMC’s long-term growth prospects in the U.S. [alert! ‘no direct link to stock price changes’]

china’s growing dominance

The talent shortage also has broader implications for U.S. competitiveness. A recent report indicates that China has surpassed South Korea in foundational capabilities across most technology sectors, including AI semiconductors and power semiconductors [4]. While South Korea leads in process and mass production, China excels in foundational capabilities and design [4]. This shift underscores the urgency for the U.S. to address its talent gap to maintain its position in the global semiconductor market [alert! ‘no direct comparison to US semiconductor industry’]

trump’s investment policy and market access

In response to these challenges, President Trump issued the ‘America First Investment Policy’ on February 21, 2025 [6]. This policy aims to facilitate investments from allied nations while countering threats from foreign adversaries, primarily China [6]. The administration plans a ‘fast-track’ review process for investments from allies who ‘avoid partnering’ with foreign adversaries [6]. However, this policy could create difficult choices for investors seeking expedited access, potentially impacting investment flows and market dynamics [6].

european efforts and global competition

The talent shortage isn’t limited to the U.S. Europe faces a projected shortfall of 350,000 semiconductor professionals by 2030 [2]. The European Chips Act (ECA) and the European Chips Diversity Alliance (ECDA) are initiatives to address this gap [2]. These global efforts highlight the intense competition for semiconductor talent and the need for companies and governments to invest in workforce development to secure their positions in the industry [2]. Investors should monitor these developments closely, as they will significantly impact the long-term success of semiconductor companies worldwide [alert! ‘no specific stock mentioned’]

Bronnen

Talent shortage Semiconductor industry