Aggressive Chinese chipmakers and auto industry may hamper its growth plans
TOKYO — Toshiba is struggling to recruit and retain semiconductor engineers as demand for memory chips rises. The Japanese conglomerate plans to build two new plants to take advantage of the favorable business environment, but it is scrambling to find more than 1,000 engineers it needs to crank up output.
Renesas Electronics and other Toshiba rivals are luring engineers with higher pay now that they have completed their restructuring programs. The shortage of engineers has become a grave problem in the semiconductor industry, which is growing strongly again.
And Toshiba has to keep an eye on foreign competitors as well. On March 12, Yangtze Memory Technologies Co. (YMTC), a memory chip developer operating under the wing of state-owned Chinese chipmaker Tsinghua Unigroup, opened an office near Kawasaki Station.
YMTC builds memory chip plants on behalf of a Chinese state investment fund that has reportedly set aside 3 trillion yen ($27.3 billion) for the task. YMTC opened a development center in Silicon Valley in the autumn of 2016, hiring around 40 engineers from Micron Technology of the U.S. and other companies. Now it is sniffing around for talent in Japan.
The Kawasaki office can accommodate 100 people. YMTC appears to have located near Kawasaki Station to make it easier to recruit engineers from Toshiba, Fujitsu, NEC and other companies.
Kawasaki, southwest of Tokyo, is a hub for Japan’s electronics and electrical equipment industries. Last Summer, Toyota Motor put up a recruiting advertisements for electrical engineers at stations along the Nambu Line, an East Japan railway to fill a position that would pay a minimum of 8 million yen a year. The message threw in a bit of flattery, saying, “We are only contacting competent people, capable of leading Micron’s projects to success.”
Micron CEO Sanjay Mehrotra, who was once CEO of SanDisk, Toshiba’s American joint venture partner, praises Japanese engineers for their ability to make minute technological improvements. Micron has begun recruiting engineers from Toshiba to develop its own flash memory products, following the end of its long-running partnership with Intel, announced in January.
Automakers, too, are emerging as rivals in the race to hire chip engineers, who are in high demand as autonomous driving and other technological advances make computer chips more important to their business. Automotive components maker Denso turned heads at the end of last year by hiring a team of developers from Toshiba’s Yokkaichi plant in central Japan.
Five years ago it was a buyer’s market for those looking to hire semiconductor engineers. Renesas, Sony, Fujitsu and Panasonic were aggressively restructuring. But recruiting midcareer engineers has become harder these days. Many companies are now looking to increase staffing rather than cut back.
There are 256 open positions for every 100 job seekers in the semiconductor industry in Japan, up from 52 per 100 in January 2014, according to staffing agency Recruit Career. That is higher than the average for all industries.
A shortage of semiconductor engineering students makes it difficult to hire people fresh out of college. The number of students majoring in electronic engineering has fallen as big manufacturers scaled back their operations in earlier years.
A job placement official at the Tokyo Institute of Technology, which sends many engineers to electronics companies, noted a “long-term downtrend” in the number of students studying chipmaking.
While the semiconductor industry is seen as a declining one in Japan, the global market for computer chips has continued to grow at double-digit rates despite being worth more than 40 trillion yen annually. In the U.S., South Korea and Taiwan, many semiconductor engineers in their 30s earn the equivalent of more than 10 million yen a year.
The semiconductor industry is popular with Taiwanese students, who see it as key to the economy, said an employment official at a Taiwanese chipmaker.
Prices for Toshiba’s NAND flash memory chips are falling at the moment. Meanwhile, strong demand for Samsung Electronics’ DRAM chips has put Toshiba further behind its South Korean rival. But demand for flash memory is expected to increase among automakers and others, making it imperative for Toshiba to find and hold on to engineers.
While Toshiba Memory, Japan’s largest and last memory chip manufacturer, has drawn more attention over negotiations for its sale and its huge capital spending, the trouble it is having with staffing poses an obstacle for it down the road.