The CHIPS Act has officially become law, and with it, New Albany’s potential to become the site of the largest semiconductor manufacturing operations in the world.
President Joe Biden signed the bill into law Tuesday morning in a ceremony on the South Lawn of the White House in front of politicians and business, labor and education leaders. The law provides $52.7 billion in aid to the semiconductor industry along with other incentives.
In January, Intel announced plans to spend $20 billion to build two plants in New Albany that will employ 3,000 workers who earn an average of $135,000 a year. But he said that with federal help, the site could have eight factories and a total investment of $100 billion.
Although Intel has not yet held a formal groundbreaking ceremony, excavation work has begun at the site.
“In my State of the Union address (in March) I described a field of dreams on 1,000 acres outside of Columbus, Ohio, where America’s future will be built,” Biden said before signing the bill.
Intel CEO: We could open factory after factory in Ohio
Intel CEO Pat Gelsinger has said he can see the semiconductor company opening a plant every one to two years for the next 10 years in New Albany, but that it depends on the aid package.
“We are delighted to see the CHIPS Act funding signed into law. Intel is committed to restoring leadership, innovation, and end-to-end manufacturing here in the US. We are doing our part, and the federal government has now done its part,” Gelsinger said in a statement issued by the company on Tuesday. .
“The CHIPS Act is now law, and we are ready to reestablish America as a leading chipmaker and Ohio as the best state to do it in,” said Lt. Governor Jon Husted. “Our work has just begun.”
“This was a very important day. The president signed the bill into law. Congress passed it and it really incentivizes Intel to move forward exactly as they told us they would,” Governor Mike DeWine told reporters at an event where First Lady Fran DeWine was there. host of Dolly Parton.
The legislation, called Creating Helpful Incentives to Produce Semiconductors in America, allocates $52.7 billion in subsidies for companies to research, design and manufacture semiconductors and help with workforce development.
Of that money, $39 billion is for manufacturing incentives, including $2 billion for legacy chips used in cars and defense systems, $13.2 billion for research and development and workforce development, and $ 500 million to provide security of international information communications technology and semiconductor supply chain. activities.
The legislation provides a 25% tax credit for capital expenditures for the manufacture of semiconductors and related equipment.
Semiconductors: The Lifeblood of Modern Manufacturing
The White House has said the incentives will secure domestic supply, create tens of thousands of high-paying union construction jobs and thousands more high-skill manufacturing jobs, and be a catalyst for hundreds of billions more in private investment.
Semiconductors are tiny, fingernail-sized devices that have become the brains of everything from mobile phones to game consoles to military equipment. The pandemic has exposed global weaknesses in supply chains that have made it difficult to buy new cars and appliances, as US production of semiconductors for the world has fallen from 37% in 1990 to 12% today.
Intel has said it doesn’t yet know how much it will benefit from the law and doesn’t expect to see benefits from the bill until next year.
Beyond the federal legislation, Ohio is providing Intel with more than $2 billion in aid, and New Albany is giving the company an on-site property tax abatement.
Several local officials were among those in attendance at the ceremony, including Columbus State Community College President David Harrison, Ohio State University President Kristina M. Johnson, and Kenny McDonald, President and CEO of the Columbus Partnership, the most powerful civic and business organization in the region. which is made up of more than 80 area general managers.
Intel has announced a $100 million commitment to semiconductor research and education programs to staff its recently announced factory near New Albany.
Of that amount, half will go to Ohio institutions of higher education, with an additional $50 million to be matched by the National Science Foundation for national funding opportunities.
“It’s a reflection of the importance not only of Intel but also of the industry in community colleges and technical education,” Harrison said of his invitation to attend the event.
Those kinds of wages can close the gap on income inequality issues facing the region, Harrison said.
“We have a lot of communities in our region that haven’t connected to the economic prosperity of our region. The ability to connect this opportunity to our priorities of closing the gaps for income inequality and economic mobility, I really think ‘I have an opportunity. to do that here,” he said.
The signing of the bill marks the beginning of what is possible with Intel in Greater Columbus, Harrison said.
Passage of the bill means the region needs to do more and do it faster, he said.
“As a community, we have to be ready to do that. I absolutely think we are,” he said.
“The CHIPS Act is a significant down payment for our future and signals that the US intends to compete on the international playing field of the fast-growing semiconductor industry,” Johnson said in a statement. “The importance of this legislation cannot be underestimated. It strengthens America’s economic competitiveness and makes a significant investment in our most important asset, the American workforce, ensuring our success for years to come. Ohio State is proud to be able to participate in this transformational effort.”
Nothing about the CHIPS Act has been easy.
The House and Senate initially passed their own versions of the bill, but then struggled to reconcile differences as the Biden administration and the semiconductor industry pressured Congress to act. Congress finally passed the legislation last month, leading to a signing ceremony at the White House.
“This is real. It’s big. It’s happening. You feel a great sense of responsibility and pride,” McDonald, the Association’s leader, said before the House vote last week. “We want to do things right.”