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CHIPS Act Falls Short Without Focus on Workforce Training
October 2, 2024 | David Hernandez, VP of Education, IPCEstimated reading time: 4 minutes
Billions of dollars of funding from the CHIPS and Science Act are going to the construction of new semiconductor fabrication plants (“fabs”). However, that investment will fail to meet its full potential unless we also focus on building something equally important: talent pipelines for the entire electronics manufacturing ecosystem.
The singular focus of the CHIPS program on semiconductors is also its greatest weakness. Although chips are uniquely important to the workings of electronics, they cannot function until they are packaged and then connected to other vital components on a printed circuit board (PCB). If we think of the chip as the "brain" of an electronic device, then PCBs are like the skeletal, circulatory, and nervous systems. One cannot function without the others.
The CHIPS for America program has increasingly recognized the importance of semiconductor advanced packaging, but no CHIPS funding has been allocated to help U.S. electronics manufacturers place cutting edge semiconductor chips on domestically made PCBs. In fact, implementation of the CHIPS Act (as of now) ignores what should be a central goal of the Act: building the U.S. know-how to build the most sophisticated technologies from silicon (e.g., chips) to systems.
Just as semiconductors and the electronic assemblies upon which they rely are interdependent, so too are the workforces that companies will depend on to bring the investments of the CHIPS program to life. And unfortunately, the $1.6 billion being spent on research will likely not flow to support the broader electronics manufacturing workforce.
Today, segments of the electronics industry compete with one another for workers, and a tight labor market has led two thirds of electronics manufacturers to say their growth is constrained as a result of labor shortages.
But with new approaches to recruiting and training workers, and greater attention and investment in the sector, a vicious cycle of competition could become a virtuous circle. An individual working for a PCB fabricator today could be working for a substrate or semiconductor manufacturer tomorrow and an electronic assembly facility the next day.
More talent in the electronics manufacturing industry overall means more workers ready to take on roles in fabs once they are up and running. Creating programs to facilitate movement between segments of the electronics manufacturing sector also creates more flexible supply chains: when market conditions foreclose workforce opportunities in one segment, they may open opportunities in other segments. And all of this provides more opportunities for American workers to obtain good jobs in a growing industry.
To establish America as a chip-producing powerhouse, the CHIPS program makes workforce a project component of each award. As a result, grant recipients are likely to make billions of dollars in investments in workforce initiatives. It’s an important start. But unless these investments support the entire electronics workforce, the program will fall short of building the foundation for a sustainable and competitive semiconductor workforce. This, in turn, further undercuts efforts to catalyze a broader revitalization of electronics manufacturing across the United States.
Policymakers should encourage companies receiving CHIPS funding to invest in initiatives that grow the pool of people interested in technician and operator roles across the industry. That includes the many jobs in the industry that don’t require a college degree, but do provide pathways into higher-wage roles for workers looking to build long-term careers in manufacturing. IPC’s new registered apprenticeship programs offer one entry point into the industry, with no degree needed and at no cost to the worker.
Rebuilding America’s leadership in semiconductor manufacturing necessitates supporting the interconnected components that those chips rely on. Failure to invest in the broader electronics ecosystem will force continued reliance on Asia for critically important electronics. Currently, the U.S. produces only 4% of PCBs globally—down from more than 30% in the 1990s. This lack of U.S. capacity and know-how represents a strategic vulnerability that undermines national security and industrial resiliency should supply chains be disrupted again by international conflict, health crisis, or natural disaster. Boosting semiconductor manufacturing alone is woefully insufficient to support the manufacture of electronics systems necessary for artificial intelligence and advanced computing.
The goal of the CHIPS and Science Act was surely not subsidizing advanced semiconductor chips that would then be sent offshore for packaging and printed circuit board assembly. Yet, that could be the result if the government doesn’t take more aggressive action to support a revitalization of electronics manufacturing in the U.S.
Failure to support the sector is a known problem: the Biden Administration highlighted the vulnerabilities in the PCB and electronic manufacturing industries in its year-long review of the electronics supply chain, leading President Biden to issue a presidential directive on PCBs and Advanced Packaging in March 2023. Mitigating America’s vulnerabilities depends, in part, on the workforce.
Most immediately, government can’t miss out on the opportunity to leverage the CHIPS program to build the workforce pipelines across the entire electronics industry. All these parts of the complex supply chain require a talented workforce. Unless we take on this broader workforce challenge, this program will be stuck working to help a small slice of the industry—a short-term win that may have long-term negative consequences for the country’s economic resilience and technological innovation.
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