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Australia's semiconductor manufacturing moonshot: securing semiconductor talent

By Bronte Munro, Alex Capri and Robert Clark

Semiconductors are a critical component in all modern technologies, from personal communication devices and medical devices to weapons systems. Crucial to producing semiconductors is the availability of a highly skilled workforce, managing clean-room facilities and highly specialised equipment to execute the hundreds of unique steps needed to manufacture a single wafer, depending on the complexity of the chip.

ASPI’s 2022 report, Australia’s semiconductor national moonshot, laid out the strategic reasons why Australia must embark on a capacity-building initiative to create a homegrown semiconductor manufacturing ecosystem. Every item on the Australian federal government’s List of Critical Technologies in the National Interest is dependent on semiconductors.

By committing to growing a semiconductor-manufacturing industry from a mature-process-scale baseline, policymakers would position Australia to manufacture chips relevant to the energy, transport, health, IT and defence sectors. Such an industry would enable Australia to execute long-term critical technology strategies in areas such as quantum computing and artificial intelligence, to mitigate supply-chain risk against disruption from conflict or natural disaster, and provide highly skilled jobs in affordable locations, enriching the Australian economy.

It’s important to note that both AUKUS Pillar 2 and the Albanese government’s April 2023 publication of the Defence Strategic Review reflect a shift in Australia’s strategic thinking on defence and national security, and the important correlation and greater cooperation between industry, education and defence priorities, particularly when it comes to technology. Delivering on that shift will be difficult and often costly, but this report provides a series of recommendations of what that correlation and cooperation could look like.

For Canberra, such an endeavour is of the same magnitude as America’s historic ‘moonshots’ during the 1960s and 1970s. It’s a once-in-a-generation challenge that will determine Australia’s place in the world, and human capital is central to ensuring success. Opting out of semiconductor manufacturing for the long term would severely constrain Australia’s growth as a technological nation and consign it to second-tier status.

This report expands on the recommendations made in the 2022 ASPI report for establishing a semiconductor-manufacturing capability in Australia and focuses on the importance of creating a talent pipeline that can support a scaled industry. Achieving a semiconductor moonshot requires stepping up Australia’s very respectable semiconductor device fabrication R&D to industry-compatible prototyping via a dedicated facility, together with attracting (through that capability and by government incentives) a semiconductor manufacturer to locate a mature-process-scale foundry in Australia—which will require support from an upskilled Australian talent pipeline. This is an ambitious move but is an essential step in growing such a capability.

The ability to grow and maintain a high-skilled workforce is a foundational challenge for Australia that can be addressed through close examination of trailblazing public–private partnerships (PPPs) that aim to provide talent-pipeline security in the US, Taiwan and Japan. Australian governments, industry and academia can emulate and engage with the examples highlighted through case studies in this report to attract semiconductor industry investment, boost talent-pipeline development and strengthen industry R&D. Australia’s states and territories all have varied capacity to o›er support to a semiconductor-manufacturing capability.