New Post

Disruption of CHIPS Act may result to Increase in Backend Engineering Demand.

The CHIPS Act, while aiming to reinforce U.S. semiconductor leadership, is inadvertently creating ripple effects that are forcing other regions—particularly Europe, China, and parts of Asia—to reassess their semiconductor dependencies and accelerate self-sufficiency programs.

Key Points Supporting this View:
European Response – Strengthening Independence from U.S. Tech

The European Union has its European Chips Act, a €43 billion ($47 billion) initiative aimed at increasing Europe’s share of global semiconductor production from 9% to 20% by 2030.

Germany, France, and the UK are investing heavily in their own semiconductor ecosystem. Germany, for example, is hosting TSMC’s new fab in Dresden, co-funded by the German government.
Given the dominance of U.S.-based EDA tools (Synopsys, Cadence, Mentor Graphics), Europe may push for alternative EDA tools outside of U.S. jurisdiction (e.g., Silvaco, Empyrean, or new open-source solutions).
China’s Push for Self-Sufficiency

China is aggressively investing in homegrown semiconductor technologies, particularly as U.S. export restrictions tighten. This includes advancements in its 28nm and 14nm node technologies and possibly below.
Huawei's 7nm Kirin 9000s chip, despite sanctions, demonstrated China's ability to circumvent restrictions, increasing demand for domestic semiconductor design.

The China Integrated Circuit Industry Investment Fund (Big Fund) continues to inject billions into semiconductor R&D, reinforcing China's goal to reduce dependency on U.S. EDA and foundries.

Surge in Demand for Semiconductor Design

With multiple regions (Europe, China, India, Southeast Asia) pushing for their own semiconductor sovereignty, there will be an explosion in design activity to support new fabless semiconductor companies and non-U.S. fabs.

This means a shortage of experienced design engineers, particularly in front-end design (RTL, DFT, verification, etc.) and backend services (PD, packaging, and testing).

Shortage of Backend Engineering Resources

As foundries and OSATs expand globally to meet the demand for regional semiconductor independence, packaging, assembly, and test engineers will become a bottleneck.

Advanced packaging (2.5D, 3D ICs, chiplets) is an emerging area where talent is already scarce, and the CHIPS Act’s focus on domestic U.S. packaging will further drive up demand for backend engineers worldwide.
Asian OSATs (ASE, Amkor, JCET, TFME) may need to aggressively expand or relocate engineering resources to new hubs in Europe and China to support the supply chain shift.

What This Means for the Semiconductor Industry:

Higher demand for non-U.S. semiconductor IPs, tools, and services → More business for non-U.S. semiconductor EDA, foundries, and OSATs.
Talent crunch in semiconductor design and backend services → Rising salaries, incentives for engineers, and a possible talent war.

• The shift in OSAT priorities → More investments in non-U.S. advanced packaging to support local fabs.
• Potential decentralization of semiconductor supply chains → More reliance on alternative foundries (GlobalFoundries, SMIC, UMC, European fabs).

Final Thoughts

I fully agree that the CHIPS Act does not just strengthen the U.S. but also forces other regions to develop their own semiconductor ecosystem, which increases global demand for semiconductor design and backend engineering. This could lead to:

A shortage of skilled engineers as multiple regions scale up simultaneously.
A potential shift of backend operations away from traditional OSAT hubs in Taiwan and China if the U.S. and Europe incentivize local assembly.
Opportunities for AI-driven automation in backend services to offset the engineering talent gap.