An anonymous reader shared a report. Last week, South Korea's SK Hynix announced it would partner with Purdue University to build a $3.9 billion semiconductor complex here, making it the largest single corporate investment in state history. Now comes the difficult part. SK Hynix will not only build a manufacturing plant, or fab, and a connected research and development center to package high-bandwidth memory chips used in artificial intelligence. You also need to staff them. SK Hynix CEO Kwak No-jeong said in an interview after last week's announcement that “it takes hundreds of years to run a state-of-the-art packaging manufacturing plant, including physics, chemistry, materials science, and electronics. We need human engineers.”
Because SK Hynix has contracts with local universities and its own universities, it is more difficult to staff factories in the United States than in South Korea. Nevertheless, Kwak said, “The end goal is very clear. We need very good engineers to be successful in the United States.” The United States is reversing something unprecedented: a decline in the share of its major manufacturing sectors. Between 1990 and 2020, the United States' share of global semiconductor manufacturing shrank from 37% to 12%, while the combined share of Taiwan, South Korea, and China increased to 58%. His federal CHIPS program has poured billions of dollars into Intel's factories in several states, Taiwan Semiconductor Manufacturing Company in Arizona, and GlobalFoundries in New York and Vermont. SK Hynix is also expecting support.
Subsidies alone do not guarantee industry sustainability. Fabs require customers, a supply chain, and most of all, a skilled and professional workforce. From 2000 to 2017, U.S. semiconductor manufacturing employment declined from 287,000 to 181,000. Since then, the number has recovered to about 200,000. Why has the US share in semiconductor production shrunk? As with other industries, the US has become a place where manufacturing costs are high. Susan Hausman of the Upjohn Institute, who has studied outsourcing, said this is not “primarily a story about offshoring.” American companies such as Nvidia in artificial intelligence, Qualcomm in telecommunications, and Apple in smartphones continue to lead in chip design. Over time, the company outsourced chip manufacturing primarily to foundries such as TSMC and benefited from generous domestic subsidies. The theory behind CHIPS is that, by matching Asian subsidies, the United States could once again become competitive in chip manufacturing. Nevertheless, there is a chicken and egg question. Factories need an immediate supply of skilled workers. But without fabs, America's brightest minds have little incentive to pursue careers in this field.