Big federal spending may flow to local colleges, businesses after computer chip package passes

A rendering of the Intel operation being built in New Albany. INTEL

Combined ShapeCaption
A rendering of the Intel operation being built in New Albany. INTEL

A $280 billion package passed this week by the U.S. Congress will boost Intel’s plans to build computer chip factories near Columbus andis also expected to fuel high-tech research and economic development across the state – including in the Miami Valley.

“Intel has indicated that if Congress passed funding to support semiconductor manufacturing, the company might increase its investment in Ohio from $20 billion to $100 billion and build additional factories,” said Jeff Hoagland, president and CEO of the Dayton Development Coalition. “Even though the new Intel facility will be in the Columbus area, we expect a significant number of jobs in the semiconductor supply chain to be located in the Dayton area. If Intel increases the size and capacity of its Ohio facility, that will mean more jobs for our region. Also, the Dayton region should be poised to take advantage of the increased scientific research funding in the bill.”

“We expect passage of the measure to boost jobs for semiconductor suppliers in the region, enhance national security, and create spinoff benefits supporting Wright-Patterson Air Force Base.”

The U.S. Senate originally approved $52 billion for the computer chip industry in June 2021 as part of the U.S. Competition and Innovation Act. The U.S. House then passed the same amount in the CHIPS Act as part of the America COMPETES Act in February 2022. But neither bill cleared both chambers.

The Senate on Wednesday and the House on Thursday approved a $280 billion bill, the CHIPS and Science Act, including that $52 billion and much other funding to boost high-tech research and manufacturing in an effort to counter China’s technological growth.

Democrats in both houses united behind the bill, joined by more than three dozen Republicans. It now goes to President Joe Biden, who has said he will sign it into law.

Government and business officials applauded the bill’s bipartisan support.

The legislation has been a “key federal policy priority” for the Dayton Area Chamber of Commerce, according to Stephanie Keinath, the chamber’s vice president of strategic initiatives.

ExploreOhio COVID cases up more than 70% in last month; ICU admissions plateau

“We know that Intel’s investments will be transformational for our state as a whole, not just the communities closest in proximity,” she said. “For the Dayton region, the opportunities to expand and grow the manufacturing and technology supply chain are significant, and the CHIPS Act will allow us to begin to accelerate those plans. Locally, we have companies that are already doing business with Intel and others that are poised to serve the growth of the semi-conductor industry in our state.

“Also critical in this legislation are additional investments in training, research and workforce development which will benefit the growth of all our STEM industries in the Dayton region.”

The bill includes the $52 billion in subsidies and tax credits for manufacturing computer chips domestically; $200 billion for research into artificial intelligence, robotics, quantum computing and other advanced technology; $11 billion to create 20 “regional technology hubs,” connecting research universities with private companies to promote domestic innovation; and several billion for high-tech workforce training.

The legislation specifies that chip manufacturers who take the federal funds can’t build new factories or expand existing ones in foreign countries including China and Russia.

Three decades ago, the United States and Europe made more than 75% of the world’s computer chips, but manufacturers were lured to Asia by big incentive packages and low operating costs. Now Asian countries make about 75% of chips, while the United States makes about 12%.

The variety of funding in the bill, for research and job training, could benefit area universities.

“The university is ready to contribute our research capabilities in semiconductor materials, devices and packaging, and advanced manufacturing to meet the domestic semiconductor industry’s needs,” says a statement from University of Dayton officials. “Our educational strengths in multiple relevant fields of engineering, computer science and management will position us well to contribute to the expansion of our region’s workforce development pipelines in response to the needs of Intel and its many partners and suppliers.”

ExploreReady to soar: Blue Angels arrive in Dayton with new F/A-18s

Subhashini Ganapathy, chair of the Intel Initiative, professor and chair of the Department of Biomedical, Industrial and Human Factors Engineering at Wright State University, said much the same was true there.

“We applaud the passage of the CHIPS Act and are excited about the opportunities that it and Intel’s investment in Ohio will provide for our students,” she said. “Wright State is well suited to support research and academic curriculum as we have been working in the areas of digital microelectronics, smart manufacturing and industrial engineering, integrated circuit design and semiconductor technologies for years in response to regional workforce needs.”

In January, Intel announced plans to build two computer chip factories in Licking County on the northeast edge of Columbus, about 90 miles from Dayton, an investment of more than $20 billion. They are expected to open by 2025, creating 3,000 direct jobs and perhaps 5,000 construction jobs. Officials have said many of Intel’s suppliers may also move facilities to Ohio, creating an unknown number of jobs here.

Company officials have said subsidies in the CHIPS Act would allow further expansion. The 1,000-acre site could ultimately “accommodate a total of eight chip factories as well as supporting operations and ecosystem partners,” according to Intel.

“We have a goal of investing as much as $100 billion over the next decade, but without federal government support, that goal will be difficult to reach in that time frame,” Intel spokeswoman Nancy Sanchez previously told the Dayton Daily News.

Ohio itself had already promised more than $2 billion in subsidies for the project, plus local property tax abatements.

Last month Intel announced it was cancelling a planned July 22 groundbreaking for its plants as it waited for passage of the CHIPS Act, with CEO Pat Gelsinger suggesting the company might shift production to Europe without the subsidies in that bill. On Thursday, he praised the bill’s ratification.

“This is a critical step to support the entire U.S. semiconductor industry and to help ensure continued American leadership in semiconductor manufacturing and R&D,” Gelsinger said. “Congress has done its part, and now we are going to do ours. I’m excited to put shovels in the ground as Intel moves full speed ahead to start building in Ohio.”

On Thursday, Gov. Mike DeWine predicted the money would help turn Ohio into a “nationwide semiconductor powerhouse.”

“The current supply-chain shortages have taught us that the United States must end its reliance on foreign-made necessities, including the semiconductor chips that power today’s electronic world,” he said in a news release. “With semiconductor chips made in Ohio by Ohioans, we’ll add tens of thousands of new direct and indirect jobs, and when other companies are looking to grow, they’ll look to Ohio because there is no better place to live, work, and raise a family.”

About the Author