How Asian universities entered the semiconductor ‘chip wars’

Semiconductors, the tiny chips that sit in smartphones, laptops, wireless routers and cars, have arguably shaped the modern world more than any other technology, meaning the countries that manufacture them hold a powerful asset. 

However, being the best at advanced chip manufacturing doesn’t just mean producing the largest quantity or the cheapest but also developing the most sophisticated technology. Today, chipmakers are racing to produce smaller and smaller chips, which work faster and use less energy.

One of the biggest obstacles hampering this development is talent shortages. According to Deloitte, the US is estimated to be short of at least 70,000 semiconductor workers, while Taiwan and South Korea both need more than 30,000 more each. This includes electrical engineers, who can design chips, as well as employees to support the industry more widely. 

“Universities are [able] to churn out about half of that,” said Chee Leong Lee, senior lecturer at the University of Malaya’s Institute of China Studies. “The whole world is [experiencing] this semiconductor deficit.”

Globally, governments and industry are increasingly recognising the importance of universities to train and supply semiconductor talent, ultimately helping them beat the competition, grow their economies and cement their position within the international order. Now, they need institutions to do more.

In Taiwan, where more than 60 per cent of the world’s semiconductors are produced, the government has taken various steps to cement the future talent pipeline. This includes, since 2021, working with top universities to establish 13 new semiconductor training academies.

Shortly after these academies opened, Tsai Ing-wen, who was then Taiwan’s president, revealed that she “specifically requested these schools stay open year-round, without winter and summer breaks, so that we can quickly produce talent”.

The courses on offer at such institutions are becoming increasingly popular with Taiwanese students, partially thanks to the promising job prospects for graduates entering the sector. The Taiwan Semiconductor Manufacturing Company (TSMC), an industry-leading organisation that is partially owned by the Taiwanese government, works closely with the island’s universities to develop the next generation of talent. It helps fund semiconductor courses and then recruits graduates directly from these programmes. 

There is “very, very strong demand from Taiwanese industry”, said Jiun-Haw Lee, professor of electrical engineering at National Taiwan University. “For the domestic student, that is very attractive.”

Taiwan’s success at producing semiconductors is partially seen as being down to the ability of industry, academia and government to all work together: something not every country in the region has mastered. “Complementing academic training with practical work experience is challenging if there aren’t industry facilities present,” said John Lee, director of consultancy company East-West Futures.

South Korea, for example, a leader in semiconductors and chip design thanks to companies such as Samsung Electronics and SK Hynix, is widely seen as falling behind in the race – in part because of a lack of government investment at the university level. 

“Since private companies like Samsung Electronics have been leading the semiconductor industry, government research funding for semiconductors in universities started to decrease significantly around 2010,” said Sung Jae Kim, professor of electrical and computer engineering at Seoul National University (SNU). “Initially, this did not pose a major issue, but after about a decade, a severe manpower shortage emerged.”

Although the government is now focusing its attention on the industry, announcing a 26 trillion won (£14 billion) package for businesses in May, South Korea also faces a severe talent shortage and attempts to lean on universities to address this have had limited success. 

When the government tried to increase the number of places for engineering students at undergraduate level in the country’s capital in 2019, for example, regional universities objected so strongly that eventually the government “gave up”, according to Cheol Seong Hwang, a professor in SNU’s department of materials science and engineering.

In 2022, South Korea set a target of training an additional 150,000 people with semiconductor expertise over the next 10 years by allowing more students to study related fields at university.

But on the whole, policymakers continue to defer to companies like Samsung, which has established partnerships with seven public universities. Graduates from these institutions’ semiconductor departments are guaranteed a job at the company. 

However, without greater government support, this approach is unsustainable, according to Professor Hwang. “This policy has inherent flaws. It does not have a graduate school, so recruited professors to this new type of organisation cannot perform research,” he said. “Also, their status is not permanent, fundamentally because it is based on the contract…so no good professors are there.” He added that these partnerships focus on undergraduates, when the country really needs engineers trained to PhD level. 

Some governments in the region are investing deeply in developing their own talent base. Vietnam, for example, announced a national strategy on semiconductor industry development in March 2024, with a view to becoming a regional hub by 2030. As part of this, the country’s universities are expected to significantly increase their training capacity, and a consortium of five leading science and technology universities has been established to support the industry. 

China is another success story, catalysed by its drive for self-sufficiency amid tense geopolitical relations. Last year, 12 higher education institutions set up integrated circuits departments, including Tsinghua and Peking universities.  

Although the country still faces significant talent shortages, “China has been raising both the quantity and quality of STEM graduates and of its relevant institutions, and now has a large pipeline of skilled labour becoming available,” said East-West Futures’ Mr Lee.  

Given this demand, some territories are also relying on training talent from abroad. In Taiwan, where the population stands at a relatively meagre 32 million, industry leaders and policymakers have recognised that they cannot rely solely on their own citizens if they are to maintain their dominance. 

Instead, TSMC has taken its training programmes global. The organisation recently announced a partnership with Japan’s Kyushu University, which is located on the same island as one of the company’s manufacturing plants. In a first-of-its-kind initiative, the university is conducting joint research and teaching programmes that prepare students to work for the Taiwanese giant, with experts from the company conducting lectures and seminars at the university. 

TSMC has announced plans to develop similar overseas bases around the world to provide talent for overseas Taiwanese companies and improve international cooperation on chip manufacturing. One of these, in the Czech capital Prague, is set to begin operating in September in partnership with local universities. 

And, for Kyushu University, the focus is no longer just on training engineers but on developing graduates prepared to work across all parts of the industry. As well as offering standard engineering courses, the institution has developed semiconductor management and design courses. 

These prepare students for everything from developing business strategies for semiconductor industries to using the technology to “solve societal problems”, explained Haruichi Kanaya, director of the university’s Education Center for Semiconductors and Value Creation. 

Kyushu is partnering with industry to do this. “There are no professors of semiconductor management or semiconductor implementation, so we invited these professors from…companies,” he said. “We have to educate more and more with speed.”

Taiwanese policymakers are also trying to recruit international students to train at their own institutions. The island’s leaders have launched campaigns targeting South-east Asian nations including Singapore and Malaysia, incentivising potential students with what they describe as “enormous” scholarships and a thriving industry. Both these countries are simultaneously attempting to drive their own semiconductor industries, with Malaysia setting out plans in April to build the “largest [integrated circuit] design park in south-east Asia”.

Beyond developing talent to boost its own industry, Taiwanese policymakers have recognised the important role that semiconductor training can play in supporting its strategic geopolitical goals and winning international favour over mainland China.

As such, the government is investing in South-east Asian countries hoping to expand their own semiconductor capabilities, including through a new talent programme aimed at Vietnam, Indonesia and the Philippines. The scheme sponsors students from these countries to study in Taiwan, including covering their airfares, tuition and living expenses. They are guaranteed a job at the end and, after two years of work, can choose to remain in Taiwan or return to their home country. 

The decision about which countries would be eligible for this scheme was a political one, according to Malaya’s Dr Lee. “All the South-east Asian countries are competing fiercely with each other,” he said. “So those who are more flexible in signing the MOUs [memoranda of understanding] with Taiwan will be the ones that Taiwan picks up to be the closest semiconductor partners.” 

Whether countries such as Malaysia and Vietnam can move away from relying on funding from the likes of Taiwan to develop their own self-sufficient sectors will mostly rely on how well policymakers, universities and industry can work together to train talent and develop expertise. 

But the lack of investment in this area could prove an obstacle, said SNU’s Professor Hwang. While talent shortages are a “critical problem” in many countries, “an even more severe problem is the lack of professors who can teach and grow them”, he said. “Professors have retired or been retiring, but the succeeding generation has not grown.”

helen.packer@timeshighereducation.com