FARAH STOCKMAN

The U.S. Is Behind in the Competition

for the ‘Oil’ of the 21st Century
July 25, 2022

By Farah Stockman

Ms. Stockman is a member of the editorial board.

Semiconductors, the tiny computer chips that run everything from smartphones to
satellites to missile defense systems, are often called the “oil” of the 21st century.
Maintaining U.S. economic and military might depend on a reliable supply.
Semiconductor shortages during the pandemic brought some car assembly lines to a
halt and left showrooms of home appliances barren, providing a glimpse of what would
happen to the American economy if those chips ever ran out.

Like energy, the semiconductor industry is so important that it factors into

decisions about war and peace. About 92 percent of the world’s most advanced chips are
made in Taiwan. The rest come from South Korea. Repeated warnings by President Xi
Jinping of China that he is willing to use force if necessary to reassert control over
Taiwan have forced U.S. policymakers to contemplate what would happen if the
American military was ever cut off from the chips that it needs.

Since the Trump administration cut off certain chips from going to China, chips have
become fodder for public debate. Now Americans are worrying about our own chip
supply, and the need for the United States to be less dependent on chips from Asia has
become one of the few areas of bipartisan agreement in Washington. The CHIPS Act,
which would give $39 billion to subsidize the construction of semiconductor factories in
the United States, plus $11 billion for research and development initiatives into chip
innovation, is the centerpiece of a bill to increase U.S. competitiveness that is expected
to move forward in Congress this summer.
Is it corporate welfare for an industry that is already profitable? Of course. But places
that make chips — including Taiwan, South Korea, India, Germany and China — offset
the enormous capital costs with gobs of public money. Reasonable people can disagree
about whether that’s a good thing. But there is little doubt that if the United States
wants to compete in this game, subsidies are the price of admission.

And yet money alone is no guarantee of success. Paying off companies won’t get us very
far unless we also invest in people who can make the industry thrive. Semiconductor
supremacy isn’t something we can buy. It’s something we must build, starting with a
thoughtful, long-term strategy to create a pipeline of talent, both domestically and
abroad.

That’s why it’s good news that Purdue University just started what it calls the nation’s
first comprehensive “semiconductor degrees” program and that Intel — which is
building a complex of fabs, as semiconductor factories are called, in Ohio — has pledged
to partner with Ohio universities to create programs that emphasize innovation in
semiconductor manufacturing.

“The semiconductor game is a long game; it’s not about making fabs but who can
innovate and cultivate talent,” Jason Hsu, who served as a representative of the tech
industry in Taiwan’s legislature, told me. Mr. Hsu, who is now a senior fellow at the
Harvard Kennedy School focused on building industry collaborations between the
United States and both Taiwan and South Korea, lamented that American lawmakers
seemed intent on trying to take the industry from Taiwan without fully understanding
how to make it succeed. “They are only interested in ‘How do we counteract China?’” he
said. “The discussion is very limited.”

One of the biggest obstacles to making more chips in the United States is the lack of
experienced workers. Part of the problem is structural, Mr. Hsu said. Facebook and
Google pay astronomically higher salaries than the chip manufacturing industry. Even
in Taiwan, Mr. Hsu told me, it has been hard to attract younger people to this work.
If the American semiconductor industry expands as expected with the passage of the
CHIPS Act, about 13,000 new engineers and software developers will be needed in short
order, and some 3,500 positions could go unfilled, according to a report by the Center
for Security and Emerging Technology.

Part of the reason for this skills gap is that people in the United States who already work
in the semiconductor industry tend to have experience in chip design, not
manufacturing. For years, many U.S. companies ordered chips from contract
manufacturers overseas, like the Taiwan Semiconductor Manufacturing Company,
instead of embarking on the extremely expensive process of producing, testing and
packaging chips themselves. But as geopolitical tensions with China ramped up,
American leaders began to push to build some capacity to make advanced chips in the
United States as an insurance policy in the event of a breakdown of trade.

To prepare for that day, the Trump administration pressured the Taiwan Semiconductor
Manufacturing Company to build a fab on U. S. soil capable of mass-producing
advanced chips. But finding people in Arizona, where the fab will be built, with the same
skills and work ethic as exist at the company’s factory in Hsinchu has been a challenge,
the company’s founder, Morris Chang, told a symposium last year.

Attracting highly skilled foreigners who can help train an American work force is
essential to success, at least in the short term, according to the Center for Security and
Emerging Technology report, which estimated that “at least 3,500 foreign-born workers
will be required” to staff the new American fabs. Some could come from American
universities, it said, but many would need to be recruited from Taiwan and South Korea.
The state of higher education in the field is also worrying. The number of American
graduate students studying in semiconductor-related fields has remained almost flat
since 1990, while foreigners enrolled in those fields at American universities have
tripled. According to “Winning the Tech Talent Competition,” a report by the Center for
Strategic and International Studies, only 23,000 Americans are expected to graduate
with Ph.D.s in science, math, engineering and technology-related fields in 2025, while
17,000 foreign students in those areas will graduate from American universities.

It’s great that noncitizens are helping to close the yawning gap with China, which is
estimated to turn out 77,000 graduates with Ph.D.s that year. But we can’t take foreign
talent for granted. Since 2016, overall foreign enrollment in American universities has
fallen every year, leading some to worry that foreign enrollment in semiconductor-
related fields might also be at risk in the future.

Philip Wong, a professor of electrical engineering at Stanford University, told me that

the pull of the United States isn’t what it once was. Although bright students from Asia
continue to flock to Stanford, he said, some of them pass up the chance to stay in
America in favor of working in the vibrant tech industries closer to home. “They don’t
need to come to the U.S. to get a good career,” Mr. Wong told me. “If you look back
several decades, the reasons for students to come to the U.S. are starting to go away.”
Reforming our outdated immigration system would help. Right now, many foreigners
who graduate from our universities must find companies willing to sponsor
employment-based visas, a paperwork-laden process that requires employers to prove
that they are paying the prevailing wage and can’t find an American to fill the job.
Foreign nurses and physical therapists are allowed to bypass this process, since they
work in fields that are deemed to suffer from a labor shortage. Many semiconductor
engineers have no such luck. Adding them to the list of specialized occupations that can
dodge this element of immigration red tape would be a boon to the industry, Graham
Allison, a Harvard Kennedy School professor, and Eric Schmidt, a former Google
executive chairman, argued, in a recent article in Foreign Policy magazine.

The design of the U.S. immigration system also makes it harder to develop a pipeline for
tech talent. Roughly 140,000 employment-based green cards are typically given out
every year for all industries — but no more than 7 percent of employment-based and
family-sponsored green cards can go to any single country in a given year. That means
that people from tech powerhouses such as China and India face far longer backlogs
than those from smaller countries. That makes no sense. Removing the per-country cap
for highly skilled people in semiconductor-related fields would get rid of a self-imposed
obstacle to recruitment.

Other countries have gone even further to lure tech talent. Britain just established
a special visa for graduates from top universities outside the United Kingdom that would
let them live and work inside the country for two or three years without a company
sponsor. Australian officials actively promote their global talent visa program at
semiconductor career expos around the world. If Americans want to really compete in
this vital industry, we’re going to have to step up our game.
The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what
you think about this or any of our articles. Here are some tips. And here’s our
email: letters@nytimes.com.

Follow The New York Times Opinion section on Facebook, Twitter

(@NYTopinion) and Instagram.