Battle is fierce for microchip jobs. Does Ohio have a shot even with Intel? |Opinion
Barry D. Wood is the U.S. correspondent for RTHK Radio in Hong Kong and was the economics editor at Voice of America for 30 years.
On Sept. 9, President Joe Biden and a host of dignitaries broke ground on a $20 billion semiconductor plant that will employ 3,000 workers on a 1,000-acre site just outside Columbus. Intel hopes the fabrication (fab) plant “will be a new epicenter for advanced chipmaking in the Midwest.”
Intel’s vision of its Ohio fab becoming a global leader in semiconductors is a gamble. If successful, it will be transformative, revitalizing a struggling region that 60 years ago led the world in motor vehicles.
More:Vice president explains why Intel is ready to invest up to $100 billion in new Ohio sites
Conversely, if Intel and Ohio come up short, expansion in Columbus won’t occur and the Midwest will have squandered a huge opportunity, dashing Intel chairman Pat Gelsinger’s dream of Ohio becoming "the largest semiconductor manufacturing location on the planet.”
Some local leaders recognize the enormity of the challenge.
Kristina Johnson, president of Ohio State University, has a resume that stretches from a Ph.D. in electrical engineering from Stanford to an engineering deanship at Duke University to being undersecretary of energy under President Obama.
Rebuffing skeptics who doubt Ohio will make the transition to microcircuitry, Johnson in April convened a workshop of 12 educational institutions to make sure Intel gets the educated work force it will require.
Asking, “How can we come together to ensure that Intel is successful?” Johnson’s workshop led to the creation of the Midwest Regional Network to Address National Needs in Semiconductor and Microelectronics to coordinate efforts boosting science education and cranking out the best engineering graduates.
More:How to submit guest opinion columns to the Columbus Dispatch
The disparate institutions - all within a four-hour drive of Columbus - include the University of Michigan, Purdue, Notre Dame, Case Western in Cleveland, Michigan State, and the universities of Dayton and Cincinnati. More colleges are expected to join.
In unveiling the network, Grace Wang, Ohio State’s research director, spoke of the incredible opportunity presented by Intel’s multi-billion-dollar investment. She emphasized cooperation, saying, “Only through collaboration can we truly realize the promise this opportunity affords us.”
Johnson repeated the mantra that education is the key to success. “American innovation cannot stay ahead of the global race without investments in academia," she said. "And no single university can provide the research and academic backbone to support this rapidly advancing industry.”
More:Intel CEO Pat Gelsinger 'thrilled to be launching the Silicon Heartland in Ohio'
Intel chose the Columbus area for multiple reasons, foremost being its skilled workforce, access to water, and large expanse of available flat land. Michael Hicks, a site selection economist at Indiana’s Ball State University, says simply Columbus won because of its educated workers.
“The Columbus metro area,” he says, “is already rich with college graduates … and has the local environment to attract more.” Hicks calls Intel’s announcement “the most consequential manufacturing commitment in recent decades.”
Outpacing in-state rivals Cincinnati and Cleveland, state capital Columbus has a growing population, up 15% since 2000 to 905,000. Columbus and nearby Indianapolis were finalists in the competition for Amazon’s second U.S. headquarters, a prize won in 2018 by northern Virginia adjacent to Washington, D.C.
Tax breaks are equally important.
Intel’s Ohio investment wouldn’t have happened without money from the CHIPS Act, bipartisan legislation approved by Congress in August allocating $39 billion for semiconductor manufacturing. In addition, Ohio is providing $700 million to improve infrastructure plus corporate tax breaks exceeding $1 billion.
More:CHIPS Act: What U.S. Senate OK means for Intel
Lou Glazer, president of the Michigan Future non-profit, says Michigan losing to Ohio is a wake-up call for his state that remains too heavily focused on the auto industry. Glazer says the lesson of Intel’s decision is that “the places with the greatest concentrations of talent win.”
Because Michigan is a laggard in knowledge-based industry, he argues, employment in Michigan is down, with wages that have declined to 91% of the national average compared to 109% in 1990. Glazer writes, “We now live in an economy where talent attracts capital. Where talent — particularly those with a four-year degree or more — is the asset that matters most and is in the shortest supply for high-growth/high-wage employers.”
The cautionary tale tempering the Intel euphoria is the sad experience of Wisconsin and Foxconn, Taiwan’s biggest contract manufacturer.
In 2017, Foxconn committed to a $7 billion investment to build flat-screen computer displays in Wisconsin, creating up to 13,000 jobs. But $3 billion in promised subsidies couldn’t be arranged and the project has been scaled back to a $600 million investment and 1,400 workers.
Competition for investment is fierce both globally and within national borders. It’s far too early to say that Ohio will win in semiconductors.
Arizona, 2,000 miles to the west, already has a dozen semiconductor fabs and Intel is hedging its Ohio bet by investing another $20 billion in an additional fab outside Phoenix. Arizona commerce chief Sandra Watson says Phoenix - not Columbus - in 10 years, “will be the epicenter of the semiconductor industry.”
Barry D. Wood is the U.S. correspondent for RTHK Radio in Hong Kong and was the economics editor at Voice of America for 30 years.
This article originally appeared on The Columbus Dispatch: Opinion: Can Ohio win the race to be the US biggest microchip maker?
