Skills gap looms as global demand for chips rockets

Figures show global sales of semiconductors and related equipment surged 44 per cent to 122.9 billion in the first eight months of 2010 following a recession-battered 2009.

While the market is notoriously volatile, suffering sharp peaks and troughs as demand for IT hardware and consumer products fluctuates, many industry players see last year's strong sales performance extending into 2011.

Shares in semiconductor companies were given a boost at the end of last week after surprisingly strong profit growth from sector bellwether Intel, the world's largest chipmaker.

Don Nicolson, chief executive of Semi Scenic, an East Kilbride-based semiconductor specialist, said many indicators were pointing to global growth of between 5 and 10 per cent this year with the upward trend possibly continuing into 2012. But the former NEC engineer, who spent nine years at Lam Research, the wafer fabrication supplier, before co-founding Semi Scenic in 2003, said a lack of suitably qualified engineering staff remained a major hurdle.

"The challenge for companies such as ours is maintaining an adequate level of resources during downturns so that we are properly placed to take advantage of the upturn.

"We have increased headcount from 13 to 25 this year and if we could find another six suitably qualified engineers, I would take them on right away.

"Since the Silicon Glen cull over the last ten years, when we lost major players such as NEC, Motorola, and Freescale, it has been left to people like National Semiconductor to carry the flag. There is still a lot of semiconductor talent out there, but it is employed in other sectors and people are reluctant to take another chance on the industry.

"As a result, we have an ageing workforce and no new talent, apart from those we train ourselves, is coming through to provide the skill sets of the future."

Despite the concerns over finding the right talent, the firm is forecasting turnover to more than triple this year to 5 million.

Murray MacCallum, a senior lecturer at Napier University, where he has taught in the school of engineering for more than 20 years, said he "broadly agreed" with Nicolson's comments on skills.

"We are noticing with our output of graduates that they don't have a great deal of difficulty finding a job in the area," he said, but noted that attracting students in the first place had been an issue for some time.

"The perception in relation to what semiconductor engineering is has been poor. The industry faced a shortage in the same area about 20 years ago, and the focus initially was very much on training to design whereas now it is more on manufacturing support."

He noted that during the Silicon Glen boom years, most multi-nationals were focusing their Scottish operations on manufacturing and not importing their research and design skills into the country.