As the global semiconductor industry faces a shortage of talent, the latest survey has exposed an even more pronounced talent shortage in China's semiconductor manufacturing sector.
Despite US efforts to restrict Chinese domestic companies from acquiring advanced process chip equipment for expansion, major Chinese foundries such as SMIC and Hua Hong Semiconductor are still vigorously expanding their mature process capacity after receiving support from the Beijing's policy funds. The new production lines are expected to gradually start production between 2023 and 2025.
Nevertheless, while the Chinese government can provide financial support for companies to build factories and purchase equipment, and can establish numerous university training programs, including cultivating IC talents in 82 key institutions and 168 key colleges throughout China, it cannot control talent migration, resulting in an increasingly prominent structural imbalance amid the talent gap in the Chinese IC industry.
According to a report jointly released by Arm China and China-based Beyond Consulting titled "2023 Mainland China IC Industry Talent Supply and Demand Report," it is estimated that the actual talent demand of Chinese IC companies in 2022 is about 199,300, while the talent supply is 164,300, resulting in a talent demand gap of approximately 35,000.
Indeed, driven by strong governmental promotion, both the demand and supply of domestic IC industry talent in China are expanding, with an increasing proportion of fresh graduates entering the industry each year. However, the demand for talents with less than one year of experience in Chinese companies is declining: in 2023, the profitability of IC companies has declined significantly, leading to a wave of layoffs and a drastic reduction in job opportunities for inexperienced talents, including fresh graduates.
At the same time, while the supply of talents in IC design sector is becoming saturated, the talent shortage in wafer manufacturing, equipment, and other sectors remains significant. The structural imbalance only worsens as IC talents cultivated in China's central and western cities, including Xi'an, Chengdu, and Wuhan, continue to migrate and gather in Beijing, Shanghai, and Shenzhen.
Meanwhile, as China's supply of IC talent continues to expand, the attrition rate is decreasing, dropping from 20.7% in 2021 to 18% in 2022. However, IC talents with more than five years of experience account for 75% of those who leave their positions, reflecting both a relatively low attrition rate in the Chinese IC industry and the strong competition for experienced talents among companies.
