The Impact of the Chip Shortage on the Engineering Skills Crisis

Article By : Richard McCullagh

To more effectively mitigate continuing supply chain shocks, companies are adjusting the way they design their products, further stretching scarce engineering resources.

It has been well noted that the global shortage of semiconductor manufacturing is having a profound effect on electronic production which reaches into many different electronic sectors. Many believe the worldwide chip shortage issue will not ease until 2023, and it is set to get worse over the next 18 months as longer lead times and higher prices kick in due to major disruption of supply lines and production capability. This has triggered the need for new strategies from Governments and companies to counter the situation.

Turning to Engineering as a solution

A recent article in Harvard Business Review highlighted that many manufacturing companies are turning to their engineering teams to find solutions to take up the shortfall in available chips.  They state their experts are adjusting the way the company designs its products, in order to more rapidly and effectively mitigate supply chain shocks. Companies with more resilient product portfolios can minimize their exposure to the disruption and makes it easier to quickly respond and adjust their products, if needed.

However to successfully execute strategies such as building more software into components or replacing premium components with standard, reliable and available chips requires highly sought-after skilled Engineering expertise.

Engineering innovation

To back this up, in a report conducted by US Component distributor Avnet, over 55% of engineers surveyed said they were redesigning boards and hardware due to the chip shortage and price hikes. Engineers also had to delay the development of boards, or incorporate a new design that used alternative components that were widely available.

In addition some governments and leading chip manufacturers are funding the building of their own ‘fab production’ plants to increase production capacity from their own territories to counter the reliance on Far East production.

Investment to build new semiconductor facilities

As part of his $2.3tn infrastructure plan US President Joe Biden has earmarked $50bn for semiconductor research and manufacturing in a bid to increase domestic supply. Whilst Intel are investing €33bn to strengthen the semiconductor value chain in Europe.  Intel estimates 3,000 high-tech jobs will be created as a result, without counting the spill-over effect on suppliers and partners. There will be a need for highly skilled experts to run these highly automated facilities. The scale of expansion taking place now is creating exceptional demand for personnel, often in specialised areas.

The dilemma of Engineering skills shortage

These strategies have put an increasing burden on the already pressurised Embedded Engineering skills market. Even in Taiwan, the world’s principle provider of semiconductors a lack of highly skilled engineers could derail efforts to stay at the forefront of advanced technology as semiconductors become more complex.

The building of these plants will take at least 2 years to have them fully operational and productive, this will lead to even greater pressure to hire skilled expertise over a shorter time-span. And according to a recent report from Deloitte, localized chip production will open up additional talent pools, but not in the short term because new talent will still have to learn new skills.

The job skills needed in the semiconductor industry are changing, with increasing reliance on software skills, and it’ll take time to hire all the right people. So there needs to be a stop-gap in place to provide the exact skills and expertise needed to fill the deficit.

The appeal of highly skilled Engineering contractor workforce to fill the gap

Due to the effects of the pandemic, where working from home has been a natural occurrence, and hiring freezes have been in place, companies have shifted their sights and strategies to contractor fulfilment and remote or hybrid working arrangements to cover the needs of the market. This way companies can ensure innovation and growth can continue. The engagement of these highly sought after engineers can often be hired at a lower price without the need for costly and lengthy processes in hiring full time and local staff.

The experience of working from home has attracted quite a few skilled engineers to the freelance contractor market offering additional embedded engineering capability. As a result, contractor skills have improved depth and reach across the range of the embedded engineering skill categories.

Companies are therefore more able to choose a perfect fit of contractor engineer for their projects from a global base of skilled resources from an on-site, hybrid or remote expertise provision, depending on need and availability.

So as more and more companies turn to innovative engineering ideas to find solutions to the chip shortage issue, it might be time to consider highly skilled electronic engineers from the contractor sector that have the flexibility and availability to bridge that gap before new plants come on stream.

This article was originally published on Embedded.

Richard McCullagh is the CEO of CIS Electronics Engineering overseeing all day to day operations, developing strategic plans, company policies while maintaining an open dialogue with shareholders, and driving organizational success. Richard has over 20 years commercial experience including working for large multinational organisations to growing medium size organisations within the technology sector and construction industry.

 

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