The semiconductor industry has always been cyclical. From the first transistor to today’s leading-edge nodes, we’ve seen repeated boom-and-bust hiring cycles dictated more by quarterly book-to-bill ratios than by long-term vision. When demand spikes, companies scramble: “Where did all the engineers go?” But when the tide turns, it’s a firing spree and, suddenly, the same engineers are expendable.
Publicly traded semiconductor firms are among the worst offenders. During expansions, they shout from the rooftops: “We’re facing a critical engineering shortage!” They fund STEM campaigns, warn policymakers of looming talent gaps, and demand more work visas. But behind the scenes, they’re laying off thousands. At the time of this writing, Onsemi has cut around 2,400 employees, and Microchip reportedly laid off about 25% of its Colorado Springs workforce.
If there’s a shortage, why the layoffs?
The manufactured crisis
The truth is that there is no absolute shortage of engineers. There’s a shortage of engineers willing to work for what these companies are willing to pay.
The so-called “talent crisis” is, in many ways, a manufactured one — driven not by a lack of skilled workers but by financial incentives that prioritize short-term cost-cutting over long-term capability building. Many companies are no longer searching for the “best” engineers — they’re searching for the cheapest. And they’ve found tools to help: the H-1B visa and, more covertly, the Optional Practical Training (OPT) program.
The hidden engine: OPT
The OPT program is one of the most overlooked but powerful tools enabling the replacement of American STEM graduates with cheaper foreign labor. While sold as a benign opportunity for F-1 international students to get practical experience, it has quietly become the largest guest worker program in the country — one that Congress never authorized.
Consider the following facts:
- OPT allows over 100,000 foreign graduates of U.S. universities to work in the U.S. for up to three years after graduation, bypassing the H-1B visa cap.
- Employers don’t have to pay payroll taxes (FICA or Medicare) on OPT workers — making them about 10–15% cheaper than hiring American graduates.
- There are no enforceable wage protections or skill requirements attached to OPT, undercutting American workers on both cost and opportunity.
- According to NumbersUSA, the program costs Social Security and Medicare about $4 billion annually.
- Meanwhile, fewer than 50% of American STEM grads are working in STEM fields, while over half of OPT workers are employed in those exact fields.
In other words, American students rack up debt to earn engineering degrees, only to be told they’re “not qualified” for entry-level jobs because companies can hire cheaper labor under the guise of “practical training.”
Follow the money
Why would companies lay off U.S. engineers and turn around to complain about a shortage? Because there’s a strong financial incentive to do so.
OPT workers offer the perfect mix: technically competent, inexpensive, and — importantly — dependent. If their employment ends, so does their legal status. That’s a powerful form of leverage.
This creates a malleable workforce unlikely to complain, ask for raises, or push back against exploitative conditions. The model works — for corporate shareholders. It also aligns neatly with the hiring algorithms many companies now use. Most job applications are filtered by software. Applicants enter their data, upload a resume, and then vanish into a digital void — no rejection email. No explanation. No human contact. That’s not an accident. That’s risk mitigation and cost control disguised as modern efficiency.
CHIPS and the American STEM graduate
This would be bad enough on its own, but it becomes an outright betrayal when you consider that many of these same companies are receiving billions of taxpayer dollars under the CHIPS Act to “revitalize American semiconductor manufacturing.”
Taxpayer funds are supposed to help rebuild U.S. strategic capability. But how does that happen if American engineers are pushed out of the talent pipeline and replaced by temporary foreign labor through loopholes never passed into law?
Worse, the public has been sold a dream. American students are encouraged to pursue STEM degrees. We invest time, money, and effort into educating a new generation only to watch as the industry tells them: “Sorry, you’re not quite right for the role.” The truth? You’re just not cheap enough.
Where’s the oversight?
The OPT program never went through Congress. It was created by regulation during the George W. Bush administration and later expanded under President Obama. Since then, its use has exploded — with over 500,000 active participants in 2023 alone. And employers have had every incentive to keep it going, often with help from well-paid lobbyists.
Some members of Congress are pushing back. H.R. 2315, the Fairness for High-Skilled Americans Act, seeks to eliminate the OPT program entirely; not to ban international students from working during school, but to stop the post-graduation loophole that has become a backdoor pipeline of cheap labor.
This isn’t anti-immigration. This is pro-fairness for U.S. graduates who followed the rules, did the hard work, and deserve a fair shot at the jobs for which they were trained.
Time for the truth
We cannot say that semiconductors are strategic assets and then refuse to employ our own citizens in building them. If we genuinely care about American technology leadership, we must care equally about the American talent base. And that means:
- Ending programs that undercut U.S. graduates
- Holding companies accountable for their public statements versus their private actions
- Demanding that taxpayer dollars support domestic capability — not just domestic factories with imported labor
- Rebuilding HR as a function of people development and retention, not just legal risk management
If there truly is a talent shortage, let’s see the data and not just the headlines.
What you can do
- Contact your representatives and ask them to support H.R. 2315, the Fairness for High-Skilled Americans Act.
- Demand transparency from companies receiving CHIPS Act funds. Are they investing in American workers, or just expanding headcount through visa loopholes?
- Push back on the false narrative that American graduates “aren’t qualified.” Ask for evidence. Ask who’s profiting from that idea.
The American engineering workforce is not broken. It’s being sidelined. Let’s fix that. Let’s prioritize truth, fairness, and a long-term vision over quarterly cost savings.
And let’s stop pretending there’s a shortage…when what we really have is a crisis of honesty and leadership.
About the author
Kevin Parmenter has a career spanning over 30 years in the electronics and semiconductor industry. A long-time IEEE member, Kevin frequently speaks at technology tradeshows and has authored many technical articles and guest columns for industry publications. Currently, he is Chair of the PSMA’s Safety and Compliance Committee and is a past president of the organization. He also was General Chair of APEC 2009.
References
https://www.designworldonline.com/27300-engineers-are-missing-from-the-future
https://www.semiconductors.org/chipping-away-assessing-and-addressing-the-labor-market-gap-facing-the-u-s-semiconductor-industry/
https://www.semiconductors.org/wp-content/uploads/2024/10/SIA_2024_State-of-Industry-Report.pdf
27,300 engineers are missing from the future
Chipping Away: Assessing and Addressing the Labor Market Gap Facing the U.S. Semiconductor Industry – Semiconductor Industry Association
Real Lives, Real Transitions | Right Management
Optional Practical Training (OPT) for F-1 Students | USCIS
https://gosar.house.gov/uploadedfiles/opt.pdf
https://www.right.com/en/
https://en.wikipedia.org/wiki/Where_Have_All_the_Leaders_Gone%3F
semiconductors.org/wp-content/uploads/2024/10/SIA_2024_State-of-Industry-Report.pdf
