If Tsai Ing-wen’s plan works, her country will produce up to 500 new electronics experts every year starting next year. Five universities have been set up by order of the Taiwanese President “Semiconductor Academies”each with a quota of 100 Masters and PhDs per year.
The budding experts are vital for Taiwan’s economy.
Buoyant demand for semiconductors, fueled by the work-from-home nature of the pandemic, as well as the proliferation of chips in everything from augmented reality headsets to electric cars, has fueled an economic boom in Taiwan while most of The world has slipped into a Covid-induced recession for the past two years. Taiwan Semiconductor Manufacturing Company, the world’s largest maker of custom chips, is expected to report more sparkling results reflecting this boom on Thursday.
But as fewer and fewer young people in Taiwan’s shrinking population choose to get an electrical engineering degree (and even fewer choose to study in the US), the wellspring that fueled the country’s transformation into the largest global chip-making center is fast drying up.
At the same time, governments from the US to Europe to Japan are trying to restart semiconductor manufacturing to secure supply chains critical to the defense industry and reduce the risk of disruptions such as The push, fueled by subsidies, has already prompted TSMC to build a $12 billion manufacturing facility, or factory, in the US and engage in a joint venture in Japan.
Tsai’s “Semiconductor Academies” aim to address all of this. “We will train people from countries that don’t yet have a chip industry. They can only start working here until the chip industry in their own country is ready,” says Kung Ming-hsin, Taiwan’s chief economic planner. “It will be like the Taiwanese who did their PhD in the US and built our chip industry when they come back home. It will create a virtuous cycle of semiconductor talent.”
That would follow the lead of TSMC founder Morris Chang, an MIT and Stanford alumnus who founded his own company in Taiwan after more than 25 years at Texas Instruments in the US.
Indeed, Taiwan is in dire need of a replacement for the minds that have powered its chip industry for decades. In the late 1980s, the number of Taiwanese earning PhDs in the United States increased growth from 745 in 1985 to a peak of 1,302 in 1994, according to the US National Science Foundation. But they have since receded and achieved a new one low from just 417 in 2020, the latest year for which data is available.
In addition, 76.9 percent of Taiwanese who received PhDs in the US in 2020 planned to stay, up from 60 percent 20 years ago.
The Taiwanese government is now hoping that budding engineers from other countries with ambitions to build a chip industry, like India, can forge the same kind of bond with Taiwan.
“You can see from our history that most people who have studied and worked in the US and then come back have had a very good relationship with the US. When they upgrade their technology, they still cooperate with the US. And so will the people who study here,” says Kung.
But the lack of new tech talent hasn’t just squeezed Taiwan’s semiconductor sector. It has also suffocated the country’s tech industry as a whole, leaving it stuck in manufacturing and failing to take the next step into higher-margin segments of the chip sector, as well as into new areas.
To revive its innovation lead, Taiwan needs to focus more on markets than technology, urged Evan Feigenbaum, vice president for studies at the Carnegie Endowment in Washington, in a 2020 report based on a survey of technology industry professionals in Taiwan and the United States.
“Taiwan’s ecosystem is under particular pressure due to its ability to shift from semiconductor and chipset design and manufacturing to new, future-oriented industries. Many of the new systems in these industries require advanced hardware,” he wrote. “But they also require parallel adjustments in software, and the firms and national innovation systems that lead these industries typically derive their competitive advantages from hardware-software integration.”
The lack of engineering talent and Western countries’ reaching for chip factories has finally prompted Taipei to act on this advice. The new academies offer everything from integrated circuit design to nanoscience. Taiwan’s tech companies had better jump on this train before the pandemic-driven chip boom fizzles out.
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