Talent crunch: Taiwan’s semiconductor sector looks to South-east Asia for workers

TAIPEI – When Vietnamese postgraduate student Le Tan Vinh was looking to study abroad for his master’s degree, Taiwan was a no-brainer.

Besides being offered a full scholarship, the 28-year-old said he would benefit from exposure to cutting-edge semiconductor research and development.

“Taiwan is one of the few places that offer generous scholarships for Vietnamese students, and that’s a very big factor for us,” said Mr Vinh, who graduated with a master’s degree in electrophysics at Taiwan’s National Yang Ming Chiao Tung University in 2021.

“Taiwan is also famous when it comes to semiconductors, so I decided it was the best choice,” he told The Straits Times.

He is now pursuing a PhD at the International College of Semiconductor Technology at the same university, and plans to find a job in the island’s chip sector in the future.

Taiwan hopes to welcome more people like Mr Vinh as it steps up efforts to attract international students – especially those from South-east Asia – to make up for its shrinking university enrolment numbers amid a falling birth rate.

In 2023, Taiwan’s total fertility rate was 0.865, among the world’s lowest.

In particular, the island is looking southwards for prospective tertiary students in the hope that they could be trained to fill the shortage of high-tech talent in the critical semiconductor industry, where Taiwan is a leading producer, manufacturing over 90 per cent of the world’s most advanced chips.

A 2023 report by Taiwan’s largest job search platform, 104 Job Bank, said that the local chip sector was looking to recruit an average of 23,000 workers every month.

This comes as the output of Taiwan’s semiconductor industry is expected to reach NT$4.17 trillion (S$173.9 billion) in 2024, an increase of 13.6 per cent from the year before, amid advances in new technologies such as generative artificial intelligence, said Taiwan’s Institute for Information Industry.

“The need for skilled workers continues to grow as the demand for chips has increased. But Taiwan could face delays in chip production and innovation if the sector does not meet its workforce demand,” said Ms Zoey Hsu, a Taipei-based semiconductor expert at tech research firm Counterpoint Research.

The competition for talent in Taiwan’s chip industry is part of a global crunch.

According to a 2022 report by Deloitte, the semiconductor industry in the United States will have a shortage of about 70,000 to 90,000 workers over the next few years, while South Korea needs 30,000 over the next decade.

Meanwhile, China had a shortage of 300,000 even before the current spike in chip demand, the report said.

The stakes are particularly high for Taiwan.

Some analysts have argued that the island’s status as the top producer of semiconductors gives it a “silicon shield” and protects it against an invasion from Beijing, which claims Taiwan as its territory and has not ruled out the use of force to “reunify” with it.

Despite its own advancements in technology, China has yet to catch up with Taiwan’s chip superiority and is still reliant on the island’s semiconductor exports. In 2023, Taiwan exported chips worth over US$47 billion (S$63.7 billion) across the Taiwan Strait.

“Taiwan’s dominance of the chip industry makes it very important, and because of Taiwan’s geopolitical issues, addressing the talent shortage in the chip sector requires more urgency,” said Ms Hsu, the analyst.

Ramping up the recruitment and training of international students is seen as part of a long-term solution, with those from South-east Asia deemed major targets due to the region’s young and growing population.

This is also in line with the government’s New Southbound Policy (NSP), introduced in 2016 by then President Tsai Ing-wen, which seeks to deepen engagement with 18 countries in South-east Asia, South Asia and Australasia while reducing its reliance on China.

In September 2023, Taipei announced plans to invest NT$5.2 billion over five years to increase the number of international students in the fields of science, technology, engineering, and mathematics.

The goal is to nearly triple the total number of foreign students by 2030 to 320,000, and retain 70 per cent of them to work in Taiwan after graduation, up from the current rate of 40 per cent.

One programme, for instance, provides scholarships and monthly stipends alongside internship opportunities at leading chipmakers, with the requirement that graduates work in Taiwan for two years after earning their degrees.

Out of the 116,038 international students enrolled in the 2023 school year, 71,012 were from NSP countries, with the majority from Vietnam (23.7 per cent), followed by Indonesia (14.4 per cent) and Malaysia (9 per cent).

Students from these countries say that Taiwan’s geographical proximity, the wide availability of scholarships, and the relatively affordable cost of living there are some of the reasons why the island has become a popular destination for overseas studies.

Chair Professor Lai Chih-huang, vice-president of National Tsing Hua University’s College of Semiconductor Research, believes that attracting South-east Asian students is mutually beneficial for Taiwan and the countries they come from.

This is especially as Taiwanese semiconductor firms are also expanding their footprint overseas to countries such as Malaysia, Vietnam and Singapore.

“When these students come to Taiwan to study, they’ll have a positive impact on both schools and industry. After a period of time of working in Taiwan, they’ll also have the opportunity to transfer what they have learnt to their home countries,” Prof Lai told ST.

His school, which welcomes some 30 South-east Asian postgraduate students annually, is one of several specialised semiconductor schools established by the government in 2021 to cultivate talent.

Mr Vinh, the PhD candidate, noted however that securing a good job in Taiwan’s chip sector is not necessarily a given for him, even as the demand for talent outstrips supply.

“You have to be able to speak Mandarin in most companies here. The language barrier can be a big challenge,” he said.

Still, staying in Taiwan for the foreseeable future “makes more sense” than going home. “Vietnam’s semiconductor industry is not developed yet. Taiwan is the best place to gain experience in the sector,” he said.

Professor Lee Jiun-haw, associate vice-president for International Affairs at National Taiwan University, agrees.

His university is launching a new English-language semiconductor undergraduate programme come September, and all 10 places were snapped up after applications opened, he said. The programme aims to attract around 50 international students annually after the first year.

“Taiwan’s semiconductor industry has an ecosystem that simply cannot be replicated elsewhere, so international students want to come here and be a part of that,” he told ST.

Malaysian engineer Dickson Tan believes Taiwan is the “best place in the world” to gain work experience in the chip sector.

“It’s not just the Taiwanese companies; all the major semiconductor firms from different countries are here,” said the 26-year-old, who found work in Hsinchu city, home to the island’s chipmaking industrial clusters, after graduating in 2021 with a chemistry degree in Taiwan’s Changhua city.

“The pay is generally higher in Hsinchu than in Malaysia, too. Staying here gives me the opportunity to save more money while learning from the best in the industry,” he said.