When Manufacturing Moves Offshore, So Do Skills

Most of the semiconductor manufacturing capacity has moved out of the United States into Asia – primarily places like Taiwan and China, also Singapore.  If you are manufacturing semiconductors you’re using a lot of complex tools.  You’re using lithography tools.  You’re using processes like chemical vapor deposition or thin film coating.  

There’s several aspects to that capability that you find inside a semiconductor manufacturing facility.  There’s the capabilities embodied in the tools and there’s the know-how embodied in the production staff who are operating the tools.  One of the interesting things to observe in some of these production capabilities is as semiconductor production has moved to places like Taiwan, the people who know how to do chemical vapor deposition, the people who know how to do thin film coating have all migrated over there as well because that’s where the schools train people.  That’s where the workforce develops the capabilities.

That has interesting spillovers.  If you look at where has solar cell manufacturing or flat panel display manufacturing which uses the same kind of deposition and coating capabilities – or the manufacturer of energy efficient lighting – all of those manufacturers draw on the same pool of capabilities.  So when you think about strategic capabilities, that’s a good model for how a country builds them up or alternatively how we have lost them in the U.S.

So as semiconductor manufacturing has moved offshore, the number of people in this country who actually know how to operate those tools, who have the tacit knowledge has declined as well.  It’s really interesting.  It’s not only in things like semiconductor processing but there are very few people in this country who still study metallurgy or designing motors or designing engines.  Most of that has moved offshore along with the production. 

In Their Own Words is recorded in Big Think’s studio.

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