Booming chip stocks just earned one more market leadership honor

Signage outside Intel headquarters in Santa Clara, California, Jan. 30, 2023.

David Paul Morris | Bloomberg | Getty Images

Chip stocks have been on a stock market tear for the last year, outpacing FAANG and other tech sector leaders in a rapid rise boosted by market enthusiasm for advanced AI chips. That success has now migrated over to another corporate performance measure. Semiconductor companies overtook FAANG stocks in Just Capital’s annual ranking of public companies on issues of importance to the American public, with Intel, Advanced Micro Devices, and Micron Technology all finishing within the top 10.

By comparison, while Apple, Microsoft, and Alphabet continue to make the list, their relative rank has dipped compared to previous years, with only Apple staying in 2024’s top 20.

Several other chip firms made jumps up the JUST 100 ranking: ON Semiconductor moved up 235 spots to finish at 89, while Nvidia, Qualcomm, Lam Research, Applied Materials, and Cirrus Logic all made the list.

Martin Whittaker, founding CEO at Just Capital, the nonprofit research firm founded by hedge fund billionaire Paul Tudor Jones to identify large public companies that outperform on stakeholder capitalism, said each year “one or two industries will stand out for its work in advancing a more just economy, and this year, it’s clear semiconductors as a whole is blazing a trail forward.”

Semiconductor firms ranked highly on this year’s JUST 100 list, Whittaker said, not only due to the number of jobs that they created relative to other industries, “but the adoption and expansion of policies that support workers and communities.”

AMD, for example, rose 119 positions to finish ninth on this year’s list, primarily due to the company’s performance in the communities, workers, and customers sections of the rankings. The company was tied for first overall within the entire Russell 1000 universe for local job creation, according to Just Capital, and spent $14.9 million with diverse suppliers like women-, minority-, and veteran-owned businesses, pushing its communities stakeholder score significantly higher. AMD also disclosed its minimum yearly salary for the first time as well as providing more information around career development and benefits, leading to a higher worker score. Regarding AMD’s customer score, Just Capital said the company increased its disclosure within its privacy policy on users’ ability to delete or modify their personal data, as well as disclosing that it had no data breaches in the last reporting year.

Other semiconductor companies also made progress in those categories, leading to higher rankings.

Intel provided new transparency around pay ranges and company demographics, funded educational opportunities and programs, and boosted its worker benefits, which included 15 days of paid-off time, 12 weeks of paid parental leave for both primary and secondary caregivers, and subsidized dependent care. Micron has several career development programs which led to an average of each employee receiving 62 hours of training, and conducts gender- and race-based pay equity analyses to ensure fairness in pay.

The importance of worker issues continue to rise in JUST 100 polling, making up roughly 42% of the methodology. In particular, “paying a fair and living wage” is the top issue in the category, along with other topics like career advancement opportunities, worker training, and development, benefits, and retention. Hewlett Packard Enterprise topped this year’s list, largely due to its focus on those categories.

The backdrop of increasing worker benefits from semiconductor companies comes amid the Biden administration’s $52 billion Chips and Science Act, which is aiming to strengthen U.S. competitiveness with China by boosting domestic semiconductor manufacturing and science research.

The bill, signed in August 2022, has led multiple companies to announce more than $40 billion in new semiconductor manufacturing investments in the U.S., according to the U.S. government. However, as those investments have increased, so too has the talent gap of qualified workers for these companies within critical manufacturing roles. Taiwan Semiconductor Manufacturing Company, the largest contract chipmaker in the world, had to delay production at its $40 billion Arizona plant due to a lack of workers in the U.S.

“We’re still looking for more qualified skilled tradespeople across the board,” TSMC Arizona President Brian Harrison told CNBC’s Kristina Partsinevelos in August. “We are installing our unique-to-the-United-States and extremely advanced pieces of equipment.”

TSMC previously said it would bring in workers from Taiwan to handle the high-tech equipment and train U.S. workers.

″[U.S. workers] just don’t have experience on these specific tools and techniques,” Harrison told Partsinevelos.

The chip industry in the U.S. is projected to grow by nearly 115,000 jobs by 2030, according to a study from Oxford Economics and the Semiconductor Industry Association. The study finds that 67,000 of those jobs for technicians, computer scientists and engineers could go unfilled by 2030 due to a lack of educational training programs and school funding.

Michael Schmidt, director of the CHIPS Program Office, told members of the CNBC CEO Council in a member-only virtual event in October that the U.S. government’s focus on the sector has helped raise visibility and encourage college students towards semiconductor manufacturing as opposed to other tech jobs. He also noted there is funding from the CHIPS Act earmarked for worker development.

More than 50 community colleges announced new or expanded semiconductor workforce programs since the CHIPS Act was passed as of last August, and many of those chip firms are building collaborations with local middle schools, high schools, community colleges and universities.

While no direct connection can be made to the passing of the CHIPS Act and the rise of semiconductor firms in the JUST 100 ranking, the clear war for talent that has emerged in that industry means worker issues will stay near the top of those companies’ priority lists.

Full rankings and information for the JUST 100 are available from Just Capital.

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