Semiconductor Industry 2008 – 2018
The Bureau of Labor Statistics ranks our beloved semiconductor manufacturing #1 in the top ten industries with the largest wage and salary employment decline over the next ten years, with an estimated 145,000 U.S. semiconductor jobs being eliminated. Other downsizing U.S. industries include: retail, wired telecom, postal services, and publishing.
Semiconductor and other electronic component manufacturing
Number employed in 2008: 432,000
Number employed in 2018 (est.): 287,000
Percent decline: -33.7%
The U.S. Bureau of Labor Statistics report also projected total employment to increase by 15.3 million (10%+) during 2008-2018. The projected growth for 2008-2018 is larger than the increase of 10.4 million for 1998-2008 due to the recession that we are currently in.
The internet is easy to blame for such progress with the ability to outsource anything and everything including semiconductor design-manufacture-production. What was once the epitome of Silicon Valley High Technology, semiconductors are now produced and consumed like potato chips mostly outside of the United States.
Even more interesting is the Morgan Stanley’s (Mary Meekers) ginormous Mobile Internet Report of December 2009 (424 pages). It starts as a walk down memory lane with mainframe computing of the 1960’s, minicomputers 1970’s (my entry into computing), personal computing 1980’s, desktop internet computing 1990’s, and mobile internet computing 2000’s.
You can bet Venture Capitals around the world will treat this as a road map for technology investing in 2010. So expect an acceleration of the mobile internet integration into everyday life. The semiconductor winners will be the handset chip suppliers: Intel, Samsung, Qualcomm, Marvell, Broadcom, Mediatek, and the likes. The losers will be anybody who doesn’t think that cloud computing and mobile internet devices will rule the global economy.
If you want to see the most advanced mobile society visit Japan. By design it is a requirement. Multiply the population density of Tokyo by the cost per square foot of living space, factor in a dependency on mass transit, divide by the square root of electronic devices now required for a modern lifestyle and you will see a maximum capacity of one electronic device per person.
Silicon Valley is a much more primitive society with desktop computers, laptops, and stereos in houses, cars, and pockets. TV’s in every room, video game consoles and wired telephones. My house alone has:
- 7 computers
- 6 smartphones with unlimited texting
- 5 TV’s with a DVR, DVD, and video game consoles
- 4 wired handsets
- 3 remote controls per TV
- 2 wireless routers
- 1 partridge in a pear tree
Another interesting read is Mary Meeker’s The Internet Report, the investors guide to the dot-com bubble. Turn the time machine back 15 years, back to the early days of body piercing, dial up internet, Netscape, and Windows 95. The supporting quotes said it all, clearly they were on to something:
“The definitive Internet report…Burn all the others.” – L. John Doerr, partner, Kleiner Perkins Caufield Byers
“A great primer for anyone considering an investment in the many emerging segments of this dynamic market” – Dr. Eric Schmidt, chief technology officer, Sun Microsystems.
John Doerr is a billionaire Silicon Valley VC who led funding rounds for Netscape, Amazon.com and Google. Dr. Eric Schmidt is the current billionaire CEO of Google.
Hi,
Good article… but it’s not all doom and gloom from the Department of Labor. The decline in Semiconductor manufacturing of 33% shouldn’t be too much of a surprise given the shift of semiconductor manufacturing to the Far East over the last few years.
The good news is that “Computer systems design and related services” is UP 45% over the same period… Not only that, but the increase in this kind of job is 4X the loss of the manufacturing jobs. http://www.bls.gov/news.release/ecopro.t03.htm
So actually I think this is good news for the US. On an individual level, the loss of anyone’s job is difficult and of course the best-case scenario would be that we could grow both sets of jobs. But if you look at the tradeoff here, it looks like we are trading loss of one job in semiconductor manufacturing for creation of 4 jobs in computer systems design. At the macroscopic level, sounds like a good trade to me.
…and if you happen to be reading this while wearing a bunny suit, it’s a clear message from the US Department of Labor that it’s time to sign up for those college courses you’ve been putting off…
Marc
Those factory jobs paid for my college education and beyond in years after WWII when rest of world was rebuilding everything.
College is now too expensive for MOST kids in US, unless massive debt pays for it, and then you become a wage slave to that debt maintenance. How many kids will really become DESIGNERS of computer systems? How many parents will be able to afford BSEE/CS college for their kids in next decade? Answer…only the brightest or richest 1%. Sound OK? And the designs are moving to Asia as well, just a 10 year lag. Design houses in India and China are growing. But if some products are HEAVY they will be manufactured in US….as freight costs get crazy. So John Deere and Catepillar should be OK. Cell Phones??? Naw… Chips…naw..
That leaves GOLDMAN SACHS jobs??? Using Asian computers systems designed and maintained by Asians, and our meager savings and loans securitized and sold around the planet almost automatically by a few hustlers that get 100x the average US wage in bonuses???? Where is that in BLS data?
But I had 50 years of good income in chip manufacturing and engineering support.
Next generation will, as you say, have to work for hollow corporations that do not make anything (like Cisco model?) but have well paid senior staff. Hope there are LOTS of those entities around (like the fabless companies that seem to pop up every day). If 80% of them die in a few years, we will see a few unhappy college grads looking for Wall Street work.
The BLS 15.3M jobs over 10 yrs is 127,500 per month, not enough to support just the increase in working age U.S. population. But, as usual, they safely assume we’re too stupid to do arithmetic. This is further supported by their notion, and M. Greenberg’s, that design can stay here while we finish destroying the production. What idiocy. It’s well known: where the production goes, so goes the design. Marc speaks of a ‘tradeoff’… would that be the same one that never worked in the last 20 yrs? Please. Mike said it: the mfg economy produces stuff and pays for a society’s needs, incl. its trade. That’s too basic an idea for some. Well, we’ll all learn… when it’s too late. As usual. Too many have accepted the sale of our sovereignty for consumption. It’s almost devoured.
I am not surprised to see this ‘article’ draw out the negative
feelings of many. I myself have had a good career doing the
‘heavy lifting’ of making semi work in real manufacturing volumes and
real competitive markets. A lot of international travel and team
experience over that time.
I am sad to say that the worst feature of all the outlook
has not changed – that of the “us versus them” bigots of the
Corporate CAPITALIST Republic – those guys who just robbed the American public of the future of their savings….
Not all of us cling to the small minded model of persons and societies,
or believe in exploitation, the more is better, and “I GOT MINE” mentality….
Some want to help change the intention of humanity for better,and this example of attitude and selfish doom talk & fear mongering won’t help.
The USA is still the biggest economy, biggest exporter, biggest inventor in the world. The future can be bright and bold
if you work to make it so.
@Greg Carter
1) “negative feelings” seems to be defined as including statements of fact. Careful there. Feelings are mushy things. Actually, I & others cited numbers. The conclusions, yes, are a human function. Are the “feelings” negative or the numbers? Your premise is wrong.
2) The rest of your comment just isn’t clear. Are you claiming critical comments just incite “us vs. them” bigotry? If so, then I suggest you’re lacking some facts. “…those guys who just robbed the American public of the future of their savings” is exactly right. Basic economics tells you this, and many authoritative sources (precisely NOT the mainstream media, understand?). Those sources are for you to find, as I have and many others. Against the facts, you have only a label, “negative feelings”. Are you aware this is not an argument on the facts?
3) It’s not clear, again, but you seem to equate protecting sovereignty and exposing the bankster ripoff with “selfish doom talk & fear mongering”. Yes? If so, I pity you. No joke. Such a position would, in my opinion, be out of ignorance, the best ally of the forces imposing those externalities on the people. As it always has been.
4) “The USA is still the biggest economy, biggest exporter…”. Newsflash for you: many of the States and 14 million people are living on fiat money handouts (your future taxes). Biggest exporter? Here’s where you indicate ignorance, my friend. The USA is the biggest trade and budget debtor the world has ever seen, or don’t you even watch mainstream media?
5) “The future can be bright and bold if you work to make it so.” Yes, as I’m trying to do, but this has nothing to do with the actual facts and forces undermining our sovereignty. You should listen to Mike Clayton, who has many decades of life experience.
This is sad. An apparently productive engineer who carries around the thinking that exemplifies the phrase “this country will only be taken apart from within”. Somehow in America we’ve bred no-thinkers only capable of supporting self-destruction (by claiming all’s ok in the face of this sh*tstorm) because they’re to lazy or aftraid to dig deeper. If my criticisms don’t apply then my apologies in advance. I think a little unemployment does wonders to stimulate classic critical thinking; maybe that’s the appropriate prescription.
I’m doing a story for Electronic News on the BLS prediction on semiconductor jobs and would love to talk to you. Please contact me at tharbert@comcast.net. My deadline is Jan. 15. Thanks!
Danijel Maricic
Electrical Engineer – Ph.D. candidate
It is not bad – it says that the semiconductor industry will lose only 33% of jobs – if you consider that you are among the top 67% of engineers it is not bad at all