Mainland chipmakers face surge in staff turnover, wages

PUBLISHED : Thursday, 18 November, 2010, 12:00am
UPDATED : Thursday, 18 November, 2010, 12:00am

While China's semiconductor consumption grows, chip companies on the mainland face increased pressure from high staff turnover and escalating labour costs, according to PricewaterhouseCoopers (PwC).

A new PwC industry survey found mainland semiconductor firms experienced annual employee turnover rates of 10 to 80 per cent, with a median of about 29 per cent.

Raman Chitkara, PwC's global technology industry leader, said the mainland sector employed 'about 300,000 staff or 29 per cent of the global semiconductor workforce'.

Multinational chip companies, which run the mainland's biggest semiconductor operations and employ the largest numbers of staff, described the rate of turnover as higher than any they had encountered outside the country, the PwC report said.

It has not always been that way. Data from the National Bureau of Statistics showed the overall average staff turnover in the country was relatively consistent during the first half of this decade, averaging less than 14 per cent per year. But since 2006, that had increased to almost 18 per cent.

Chip companies saw rising labour costs affecting employee turnover rates as workers nationwide sought higher pay, the PwC report said.

Minimum wage increases of 20 per cent had been put into effect in at least 18 provinces since February.

The PwC report said the pool of available labour for the semiconductor industry had also been affected by the 'combination of a demographic shift, caused by 30 years of the mainland's one-child policy, and increasing university enrolments'.

Despite those issues, the industry was faring better than some.

'China's semiconductor consumption, which reached US$101 billion last year, is weathering the global recession better than any other regional market,' said Alison Wong, an assurance partner at PwC China.