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Biden’s visit shows high stakes of $20 billion Ohio chip factory

A previous version of this article incorrectly said that Sen. Bernie Sanders (I-Vt.) supported the Chips and Science Act. He voted against it. NEW ALBANY, Ohio — President Biden on Friday celebrated the start of construction of a $20 billion project that aims to reassert the United States as a major technology manufacturer after decades of offshoring, with the building of two giant semiconductor factories that could deliver thousands of jobs in coming years. The Intel manufacturing facility taking shape on a verdant plot of land outside Columbus is one of the most expensive and consequential investments in the United States in recent years — one offering enormous possible benefits for the economy, but also facing considerable challenges to reach fruition. Billions of dollars of federal subsidies, approved in newly signed law , convinced California-headquartered Intel to proceed with the project, which aims to dramatically boost domestic manufacturing of the tiny components that power all modern electronics, from laptops to fighter jets. But ramping up the vast manufacturing zone will take major effort, including consistent, years-long investment in the face of potential recessions and fickle Wall Street investors, and the training of thousands of engineers and technical workers amid a labor shortage. In a speech, Biden said the project — and a flurry of other big semiconductor investment announcements — are an endorsement of his push to use $52 billion of taxpayer money to incentivize the reshoring of manufacturing deemed vital to U.S. economic and national security. The approach has also won wide support from Republicans , who want to strengthen U.S. competitiveness versus China, which is pouring state funding into tech manufacturing. “Federal investment attracts private investment. It creates jobs. It creates industries. It demonstrates that we’re all in this together,” Biden told a crowd of hundreds who gathered to watch the groundbreaking ceremony, including local officials, Ohio’s governor and senators and engineering professors from across the Midwest. “This is about our economic security. It’s about our national security. It’s about good paying union jobs you can raise a family on … jobs that show that the industrial Midwest is back,” Biden added during a ceremony featuring a gospel choir, Ohio State University’s marching band (“The Best Damn Band in the Land,” more than one speaker noted) and a panorama of dump trucks and diggers. Intel Chief Executive Pat Gelsinger and other speakers emphasized the promise of bringing to the Midwest a lucrative high-tech industry previously located mostly on the West Coast. With the investment, “we declared the end of the Rust Belt and the beginning of the Silicon Heartland,” Gelsinger told the crowd. The federal subsidies, part of the Chips and Science Act signed into law last month, are sparking a wave of chip investment. Micron is holding its own groundbreaking ceremony on Monday for a $15 billion chip factory near its headquarters in Boise, Idaho. Chip maker Wolfspeed on Friday announced plans to build a new manufacturing facility in Chatham County, North Carolina. Taiwan’s TSMC, the world’s largest chip maker, has said it will seek subsidies for a $12 billion factory that it has begun building in Phoenix and is aiming to finish late next year. And a partnership between SkyWater Technology and Purdue University will apply for a federal subsidy to build a new $1.8 billion factory and research facility next to the university in West Lafayette, Ind. The United States today depends heavily on Asia and particularly Taiwan for its chips manufacturing, a reliance that has worried U.S. officials as the self-governing island’s tensions with China rise. Concerns about that dependence have soared over the past two years amid global shortages of chips that hobbled all kinds of manufacturers, including automakers , which were forced to halt their production for weeks at a time. Asian governments have long subsidized chip manufacturing, helping them corner the lion’s share of production in recent decades, to the detriment of the United States and other Western nations that took a more laissez-faire approach. Chip factories are among the most expensive manufacturing facilities to build, costing $10 billion or more, making many investors reluctant to build them without government assistance. About 37 percent of the world’s semiconductors were manufactured in the United States in 1990 versus about 12 percent in 2020, according to the Semiconductor Industry Association. Willy Shih, a Harvard Business School professor who specializes in technology and manufacturing, praised the subsidy program for spurring vital investment, but said that to compete with Asian chipmakers, domestic manufacturers and […]

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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