The Aerospace and Defense (A&D) industry is facing a global shortage of semiconductor engineers, projected to exceed one million by 2030, even as the sector heavily invests in semiconductor production. This shortfall is driven largely by the anticipated growth of the semiconductor market from $550 billion in 2021 to more than $1 trillion by 2030.
This shortage significantly impacts defense projects that rely on advanced chip design, highlighting vulnerabilities in critical technologies. The semiconductor engineer talent crisis is intensified by high retirement and workforce attrition rates across other critical roles, from technicians to mechanics. According to the NAM Manufacturers' Outlook Survey for Q1 2024, over 65% of manufacturers identified the struggle to attract and retain employees as their top challenge. Current educational pipelines are also inadequate. For instance, fewer than 100,000 students graduate annually around the world in fields relevant to semiconductors, such as electrical engineering.
This workforce gap stems from increasing global demand for semiconductors driven by advancements in AI, IoT, 5G and other technologies. The shortage threatens, not only manufacturing capacity, but also innovation, as critical sectors such as automotive, defense and telecommunications rely on these components.
The talent gap is placing considerable strain on employers, hampering their ability to compete with other sectors for top talent, meet hiring demands, accelerate employee proficiency and retain critical staff. According to the Aerospace Industries Association, of the 70,000 engineers graduating annually in the U.S., only 44,000 are qualified to work in aerospace, and U.S. companies face stiff competition for these candidates from major tech firms like Amazon and Apple. Between 2021 and 2031, the U.S. will need 3,800 new aerospace engineers every year, according to the Bureau of Labor Statistics.
And the talent shortage is not the only challenge facing A&D. Other disruptions that are reshaping how the industry operates, innovates and competes include the rise of green technologies that enable increased fuel efficiency, advances in composite manufacturing, automation, generative AI (GenAI) and a heightened demand for wireless communications and avionics systems. Meanwhile, the sector must focus on enhancing cybersecurity to protect sensitive information and systems. Other primary concerns for manufacturers include an unfavorable business environment, rising healthcare and insurance costs and a slowing domestic economy.
The A&D industry is facing shortages in skills critical to its continued growth and innovation. First is the lack of digital technology skills. This broad category can be divided into key areas such as AI and machine learning, coding and digital analysis. These technologies are essential for modern aerospace systems, especially in improving automation, security and operational efficiency. The skill gap is also apparent in advanced manufacturing processes, such as 3D printing, composite materials manufacturing and robotics.
While systems engineers are in increasing demand as components and subsystems become more and more complex, there are fewer STEM graduates entering the sector. Aerospace engineering, mechanical engineering and material sciences are struggling to find new talent.
In the A&D sector, rapidly evolving technologies are intensifying the need for highly specialized positions, especially in avionics, aerospace electronics and chip design. The global shortage of semiconductor engineers is affecting major enterprises. Both Boeing and Airbus have reported difficulties maintaining production schedules due to a shortage of skilled workers, including machinists, welders and chip engineers. Recently, Boeing experienced further production challenges when machinists in the IAM District 751 union began a strike in September of 2024 over wage and benefit concerns. This disruption highlights the financial vulnerabilities associated with labor shortages. Boeing incurred an estimated $5 billion in losses due to halted production and delays in plane deliveries.
Please fill out this form to continue.