Although the U.S. is slowly opening again and returning to some semblance of “normal,” worldwide tech manufacturing is facing its own crisis: a shortage of the chips we need for everything from computers to washing machines to vehicles. Along with this shortage is a reduction in the number of Baby Boomer age engineers, which could result in a labor crunch and significant knowledge loss. Read on for the latest news and technology updates in the second quarter of 2021.
Baby boomer engineers may be retiring in greater numbers
Each year, millions of Baby Boomers retire from the labor force— a percentage of them engineers. According to a Pew Research report, the pandemic has meant an uptick in the number of Baby Boomers choosing to retire.
After a rocky 2020, the labor force (those working or seeking work) is rebounding for people 25 to 54. However, Boomers have not been as quick to seek employment as younger engineers. Some economists believe that the health risks to older workers during the pandemic accelerated many workers’ retirement plans. In fact, 2.1 million workers have left the workforce due to retirement since early 2020— a retirement rate almost double that of pre-pandemic 2019.
This exodus of experienced engineering talent threatens to create not just a skilled labor shortage, but significant knowledge loss for many companies. According to a 2018 survey conducted by GlobalSpec, many companies do not have an effective way to capture information from retiring engineers, meaning decades’ worth of knowledge and experience leave engineering teams each year.
For the full story on retiring engineers, visit EE Times.
Vulnerabilities grow as global chip supply shrinks
The U.S. is now vulnerable to supply-chain disruptions because of the widespread global chip shortage. Another victim of the COVID-19 crisis, the semiconductor supply chain has put many technologies and products essential to our daily lives at risk.
The U.S. has launched a $52 billion plan to revitalize chip manufacturing and research, but does not yet have the funding. The provisions of the plan were authorized by the CHIPS for America Act, which was enacted earlier this year.
According to a recent statement from the Semiconductor Industry Association, “the semiconductor industry stands ready to work with the U.S. government to ensure the U.S. remains the leader in the game-changing technologies of today and tomorrow.”
Read more about this evolving story here.
Production and sales of vehicles in the U.S. grinds to a halt
Car dealers have sparse parking lots, consumers face limited options on new vehicle purchases and buyers must wait for their new vehicles to be built. The whole industry is waiting for one critical ingredient: chips. The leading cause of the shortage was the massive increased demand for new personal electronics, like cell phones and laptops, during the COVID-19 pandemic.
The trajectory for the vehicle industry began with at first a sharp drop in new car sales. But it quickly rebounded with pent-up demand and 0% financing offers. Dealerships also quickly learned how to sell vehicles online, even offering home pickup and delivery. “When the factories restarted, the stronger-than-expected demand for new vehicles outpaced production and has yet to catch up.”
Read the rest of the story on the Detroit Free Press.
“Chipageddon” could last two more years
Despite the best efforts of industry leaders, it’s been predicted that the global chip shortage could last until 2023, according to Forrester. “Demand will remain high and supply will remain constrained. We expect this shortage to last through 2022 and into 2023,” stated Glenn O’Donnell, a vice president research director at Forrester.
Whether or not that specific prediction is accurate, most industry analysts believe that semiconductors will be in short supply for some time to come yet.
In the face of the crisis, some chip manufacturers are planning to ramp up chip production.
For example, Intel announced in March that it plans to spend $20 billion on two new chip factories in Arizona. Intel has also said it could build a plant in Europe if it gets public funding.
Read the full story on this developing issue here.
That’s our round-up on the leading news for the Q2 of 2021. To stay current on semiconductor industry trends, make sure you're subscribed to our blog.
