SEMICON West 2017: Expectations vs. Realities

July 24, 2017

By Hardev Grewal

The three-day stretch in July known as SEMICON West is a pivotal annual event for the semiconductor industry. The entire supply chain descends upon the Moscone Center in San Francisco, traveling from as far away as Shanghai and as near as a few city blocks to meet with fellow industry executives, media and analysts to discuss overriding trends, specific project needs and accomplishments. SEMICON West has always been an excellent indicator for where semiconductor device manufacturing stands—which verticals (automotive, IoT, solar) will drive demand, and how resources will be allocated accordingly.

NSTAR is connected to many different touch points from within the industry, and as a company, we tend to have a pretty good read on the state of things as the show opens. In fact, this year, we expected to see most of the conversations centering around two topics: extending the life cycle of fabs domestically, and the unprecedented growth of China’s semiconductor industry.

Our dedicated recruiting team was the first to notice that, across the country, we face a shortage of labor with semiconductor experience. There are legacy fabs and a number of expansions slated for key high-volume manufacturers. A skilled labor force is critical to every aspect of fab operations, and relies on workforce expertise from technicians to engineers.

Our conversations regarding labor shortages for the semiconductor and adjacent/high-tech industries clearly lays out a scenario in which companies are vying for the same resources. At the same time, labor costs are increasing, especially in the known hot spots of California, New York and Oregon. Traditionally, we’ve seen companies target graduating classes as they enter the workforce; however, NSTAR has shifted its strategy to develop relationships with students well before they plan their career paths, to bring the industry to the forefront of their minds as they complete their education. Given the ever-growing market segments of IoT and automation, U.S. fabs have a long-term future if companies focus resources on attracting the right talent.

Unprecedented growth in China begs the question of which companies will be able to support such growth, created by heavy investments from both government and private sectors. At last year’s SEMICON, this was already a topic of discussion, especially with respect to availability of resources—technical skill sets, services and materials—and again, “which companies can secure bandwidth for the immense ramp?”

We’ve noticed that resource support requests in China are dwarfing any labor shortages in the U.S. Our major OEM clients are adding hundreds of new positions in China, and we are prepared to support them in these endeavors, doubling our local headcount every few months.

With our management team at the show all three days, we expected to hear a lot about both topics from current clients and potential new partners. These important themes highlight the need for a multicountry/continent support strategy. NSTAR is a global company that responds to local requests, which will continue to be a key differentiator for our business. Emerging markets, like China, often face challenges in scaling up enough to meet the needs of a single fab. However, larger partners rely on service partners like NSTAR that understand the facility benchmarks from our global project experience and can act quickly on a global stage.

By the close of the show on Thursday, our expectations were closely aligned with the realities based on what we saw and heard in San Francisco. Our strategic focus on the U.S. market as well as our already-strong capabilities in China addresses industry needs. Overall, the show met our expectations, and it is clear that opportunities abound for NSTAR Global Services.