The Offshoring of Engineering Facts, Unknowns, and Potential Implications (2008) / Chapter Skim
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Semiconductor Engineers in a Global Economy--Clair Brown and Greg Linden
Semiconductor Engineers in a Global Economy--Clair Brown and Greg Linden
Pages 149-178
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From page 149... ...
engineers are insignificant. The cost reductions enabled by Asian suppliers of fabrication and design services are also contributing to falling semicon The semiconductor industry produces a wide range ductor prices, and thus supporting the continued expansion of products, from relatively simple discrete diodes and of markets, both at home and abroad. transistors all the way to complex "systems on a chip." The semiconductor (or integrated circuit [IC]
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For an idea of the scale involved, the The discussion in this paper of how the labor market for width of a human hair is about 100 microns, and the width semiconductor engineers, both domestic and worldwide, of a molecule is about 1 nm (one-thousandth of a micron)
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From page 151... ...
labor market for semiconductor engineers, clusions based on either data set alone. The inconsistencies including technological change, immigration policy, and and gaps reflect a need for better data collection by governhigher education practices.
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Note that these comparisons are not adjusted for engineers fell 2 percent, the only specialty in which job education or experience, which are taken into consideration growth for semiconductor engineers was lower than for in the next section using a different data set. engineers nationally.
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. Semiconductor engineers even experienced and 2004, with earnings adjusted for inflation (in 2004 dolbetter job and earnings growth than engineers in the same lars using CPI-urban)
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The graduate As expected, median and average earnings increased degree premium for the youngest group, when many were with education. Comparing real median earnings for the still in school, was 36 percent in 2002, but fell to 8 percent in younger groups, we see that the return for a B.S.
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For engineers older than 40 in 2004, the graduate degree premium was only 10 The ACS earnings profiles showed slower growth of percent, indicating weak incentives for domestic workers to average earnings between 2000 and 2004 than the OES data $250,000 $200,000 90% 50% $150,000 10% Earnings $100,000 $50,000 21–30 31–40 41–50 51–65 Age FIGURE 4 Age-earnings profile for M.S./Ph.D. holders in 2004.
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From page 156... ...
10th percentile $61,238 $61,238 $61,945 $55,062 $63,533 $45,002 $21,276 $60,790 $60,790 $32,320 50th percentile $89,073 $106,331 $100,207 $79,417 $90,005 $105,888 $105,888 $63,322 $96,250 $106,382 $101,316 90th percentile $111,341 $155,878 $95,299 $137,654 $158,832 $339,901 $91,184 $210,737 $217,829 $217,829 90/10 ratio 1.82 2.55 1.54 2.50 2.50 7.55 4.29 3.47 3.58 6.74 Mean $89,360 $114,175 $121,988 $79,769 $95,060 $120,872 $127,819 $61,167 $112,238 $127,075 $124,065 aThe repetition of earnings in some cells, especially for the 90th percentile group, appears to be a coincidence and not a mistake. A check of the data indicates that many workers with different levels of education and in different occupations reported the same earnings, which are not top coded.
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The career paths of confidence how much earnings by semiconductor engineers loyalists were considerably better than the career paths of grew from 2000 to 2005. job changers.
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jobs, we found that shrinking large firms tended shrinking firms to both men and women (by 7 to 37 percent) , to shed experienced workers with lower earnings growth, because annualized earnings growth was higher (by half a 18 http://www.allianceibm.org/news/jobactions.htm.
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workers to compete to keep their jobs, which were either Compared to growing firms, large shrinking firms paid being eliminated or being filled by new hires paid at market lower initial earnings but offered higher earnings growth rates. In any case, the era of lifetime jobs with career develfor short jobs; the job ladders for younger men were better opment appears to be over, and many workers must improve relative to those of older men.
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In this section, we look at the earnings of H-1B visa holders. The H-1B visa is used by foreigners 22 Twenty-three fabs in four countries were part of the CSM survey.
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. exempted, many H-1B visa holders had advanced degrees EE applications primarily stated a specific rate; the dis(M.S.
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81,882 39447 42,150 134,838 Range given min 60,406 24271 39,145 88,486 max 34 (2%) 82,882 36511 50,000 140,000 Other Chip and Non-Chip Firms Electrical and Electronics Engineering Job Codes Rate given 7701 (6%)
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2005. This indicates that semiconductor engineers had averCompanies, 2001–2005 age earnings compared to the broad range of other workers at Motorola.
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show that the numbers of degrees awarded to citizens and were H-1B visa holders. noncitizens are much closer, although once again noncitizen These data indicate that semiconductor companies use male students were awarded more Ph.D.s than their U.S.
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Semiconductor Firms32 Globalization is one of the primary forces affecting the The three primary reasons for locating value-chain activiwork and rewards of U.S. semiconductor engineers.
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For example, Japan 13.0% a company may move chip design to China to take advantage Asia (except Japan) 3.0% of low-cost engineering talent with knowledge of customized Source: Calculations courtesy of Rob Leachman.
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chip manufacturing, the net loss of engineering jobs seven ASIC design centers around the United States.41 Even has probably been offset, at least partly, by the increase in foreign start-up companies may need a U.S. design team to design jobs at fabless companies.
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think Taiwan may provide a model of how semiconductor en- engineers begins to level out. Semiconductor engineers in the other countries tend to be younger and less experienced; thus 43 The OES total for all software and other engineer categories was 73,650 the salaries for engineers in China and India are for individuin the May 2004 data and 76,300 in the May 2005 data.
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According to some sources, about 400 chip designers web site (average for electronics and software engineers in NAICS 3344) ; are being added each year in India and China.47 However, Japan salary (average for circuit designer and embedded software engineers that number can be misleading, because there is some conaged 40 years old)
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MNCs (McKinsey Global Institute, universities, and the government's microelectronics lab, 2005) .50 ERSO, which played a pioneering role in the development However, as we have already pointed out, the competi of the industry, including the creation of chip companies tion is not only between U.S.
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perspective, Taiwanese competition has shortened design subsidiaries of major semiconductor companies; early the market window during which U.S. chip companies can takers include Sony and Broadcom (a major U.S.
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Others offer design services rather than their own foundries -- the major exception being Texas Instruments, products.64 One interviewee, echoed by others, claimed that which began working with Semiconductor Manufacturing many, if not most, firms outside the top 10 are engaged in International Corp (SMIC) in 2002 and added a deal to various types of reverse engineering, which is often illegal.65 co-develop SMIC's 90 nm process in 2004.61 Executives Foreign firms are generally reluctant to bring lawsuits, howwith U.S.
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agement experience and connectivity to global networks that The education of semiconductor engineers in China is tend to accelerate the development of China's chip sector.71 also at an early stage. As discussed above, the quality of According to government statistics on student returnees, in Chinese engineering graduates varies widely, and few have 2003, of the 580,000 students reported to have gone abroad the knowledge and skills necessary to work on advanced since 1978, 150,000 had returned.72 The returnees had started technology or for MNCs.
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The low flow of new domestic graduates and sophisticated. They use a fixed-price method, are able to returnees into the EE labor supply, coupled with the need for provide end-to-end solutions that incorporate in-house pro- at least three to five years of experience for fully productive prietary intellectual property, and offer design services across chip designers, has meant that the supply of design engithe VLSI design flow.
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Engineers Even experts disagree about whether or not the United States is educating too few engineers and scientists and is The job market for U.S. semiconductor engineers shows facing a shortage.88 This is partly because economists find it there is some strength in employment and earnings growth, hard to believe there can be a shortage in a labor market when but also shows evidence of labor market problems, espe real earnings across the board are stagnant.
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sectors in which companies are restructuring globally. Semiconductor engineers are known for their flexibilCurrently, white-collar workers like chip designers do not ity and ability to solve challenging problems and to learn qualify for trade-adjustment assistance from the government new technologies.
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Industrial and Corporate Change 14(1) : and China into the global economy.
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2004. Internationalisation of Innovation: Why is Chip Design Tilton, J.E.
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