India’s budding semiconductor industry braces for talent crunch, looks for ways to close the gap

As per staffing firm Xpheno, the SemiCon industry currently employs around 50,000 professionals across the board. It forecasts a growth in demand for skilled and semi-skilled labour by 20 percent this year while demand for unskilled labour will increase by 30% this year.

India's ambitions for its nascent semiconductor industry are poised to face immediate hurdles in terms of acute talent shortages, which experts anticipate will persist for the next four to five years, rendering most upcoming semiconductor production facilities starved of skilled manpower.

The industry's rapid growth, according to experts, is expected to exacerbate the manpower shortage, with an estimated gap of 2.5 lakh to 3 lakh skilled workers across the semiconductor production chain over the next five years.

According to industry experts, India's semiconductor ambitions currently coincide with an ongoing global talent crunch in the industry with a growing shortfall of engineers which has left the industry grappling with one lakh vacancies in the United States, Europe, and more than 2 lakh in the Asia-Pacific region (excluding China).

No single solution

Ashok Chandak, President of the India Electronics and Semiconductor Association ( IESA) told Moneycontrol that despite India's rich pool of engineering talent, there remains a shortage of specialised skilled workers within the semiconductor sector.

IESA estimates suggest that by 2026-2027, India's semiconductor industry will require approximately 1.5 million skilled workers and 5 million semi-skilled workers across the value chain, marking a significant escalation from current figures.

“This demand surge is fuelled by the necessity for expertise in chip design, manufacturing, testing, as well as allied industries such as materials, chemicals, gases, and logistics,” Chandak said adding, “ India could glean insights from countries like Taiwan, South Korea, and Singapore, which have effectively cultivated skilled semiconductor workforces through public-private partnerships and investments in STEM education.

Chandak emphasised that while India possesses the potential to meet the global semiconductor workforce demand, concerted efforts in skilling, policy support, and industry collaboration are imperative to realise this objective.

Yeshab Giri, Chief Commercial Officer at talent hiring firm Randstad India, projects a skill gap of 2,50,000 to 3,00,000 employees over the next five years across the semiconductor production chain in India.

While addressing this challenge requires a systematic approach over the coming years, he feels that companies venturing into semiconductor fabrication, outsourced assembly and testing (OSAT), and packaging will be to source foreign talent to kickstart their operations in the foreseeable future.

“All companies are scouting for foreign talent. While talent can be groomed, initial hands-on talent will come from outside,” said Subburathinam P, Chief Strategy Officer, TeamLease Services Limited .

Revealing the challenge, several Indian semiconductor companies have meanwhile begun devising plans to attract top talent from Asian countries with established semiconductor ecosystems. For instance, Kaynes Semicon, which is part of the Kaynes Technology group, an electronics manufacturer, intends to conduct a roadshow in Malaysia and the Philippines in the coming months to attract talent.

Forecasting industry growth, Kanth S, Head of Engineering Services, Xpheno estimates that the semiconductor sector currently employs around 50,000 professionals, with a projected increase in demand for skilled, semi-skilled, and unskilled labor this year.

"To be sure, the current demand for semi-skilled workers, such as PCB designers and power electronics specialists, is already present and can be met with the existing talent pool that India has to offer. Demand for unskilled labour in this industry is expected to increase by 30% this year," Kanth said.

There will especially be a significant demand for technicians specialising in silicon processing, which is a core function within the industry. Hence, demand for this role is estimated to be three times more than the requirement for skilled workforce in this domain.

Additionally, the Union Cabinet's approval of three semiconductor proposals totalling Rs 1.25 lakh crore in Gujarat and Assam, along with forthcoming approvals for new proposals, signals a significant stride in India's semiconductor ambitions.

With companies intensifying hiring efforts, there's a surge in demand for entry and mid-level professionals across various states. Locations such as Gujarat, Bengaluru, Telangana, Tamil Nadu, and Assam are witnessing increased recruitment for roles ranging from sales and field application engineers to semiconductor chip designers and fabricators.

Bridging the gap

To bridge the skill gap, industry-academia collaborations are pivotal, experts feel. To meet this, IESA’s Chandak advocates further partnerships between semiconductor firms and educational institutions, offering internships, apprenticeships, and co-op programmes to provide students with practical experience.

To be sure, initiatives to introduce specialised courses on semiconductor fabrication, design, and testing are already underway, with IESA collaborating with universities to define such programmes. Efforts are also underway to engage global associations, semiconductor companies, and educational institutions to bring advanced training programmes and technology to India.

Most organisations in the industry are contributing to building curriculum in universities. “It will take a year or two as companies are getting into operational mode. We are also seeing action on tie-ups with the government and IITs /ITIs and universities to develop curriculum,” Subburathinam added.

“There should be incentives for skill development. The government must look at providing tax benefits and other incentives to companies that invest in skill development initiatives for their workforce.” said Chandak.