Local Leaders See Opportunities with $20 Billion Intel Project
YOUNGSTOWN, Ohio – Local business and political leaders say Intel’s decision to build a $20 billion semiconductor manufacturing campus outside of Columbus could present supply chain, customer and service opportunities throughout the Mahoning Valley.
“The demand for automotive semiconductors will continue to soar and domestic production is critical,” Dan Ninivaggi, CEO of Lordstown Motors Corp., said in a statement Friday. “Today’s announcement about the historic investment in Ohio is great news for the entire state, Voltage Valley and for all companies advancing new technology, especially electric vehicles.”
Intel announced Friday that it had selected a 1,000-acre site in Licking County – about 30 minutes north of Columbus – to construct two semiconductor manufacturing plants by 2025.
The operation would initially employ 3,000 and use more than 7,000 tradesmen to construct the complex. The $20 billion investment is the single largest private sector project in Ohio history. Moreover, the project could translate into tens of thousands of jobs through supply networks, service providers and other vendors across the state.
Lordstown Motors recently negotiated a deal that paves the way for Taiwanese tech giant Foxconn to purchase the electric vehicle startup’s manufacturing plant in Lordstown for $230 million.
Foxconn, which would also serve as a contract manufacturer for Lordstown Motors’ electric vehicles such as the Endurance pickup, has also entered into an agreement with Fisker Inc. to co-develop that company’s all-electric project Pear. That vehicle would be produced out of the Lordstown plant once Foxconn’s deal with Lordstown Motors closes, which is expected in April.
Intel’s new semiconductor complex in helps Foxconn’s efforts at the Lordstown plant, says Shea MacMillan, director of economic development projects at the Youngstown/Warren Regional Chamber.
“I think it bodes well for their customers and boosts confidence in what Foxconn is trying to do in Lordstown,” he says.
Other operations such as Ultium Cells LLC’s EV-battery cell manufacturing plant in Lordstown could also indirectly benefit, since the new campus would bring stabilization to the auto industry, which has been disrupted because of a shortage of semiconductors in the U.S. market.
Moreover, MacMillan envisions several opportunities for companies in the region to play a part in areas such as machine manufacturing and service. “We could be huge in supporting the needs and equipment for their actual facility,” he says.
John Moliterno, president and CEO of the Western Reserve Port Authority, says a project with such stature means that companies from all over the world will be training their sites on Ohio for new business.
“When something happens in Ohio, it’s good for all of us,” Moliterno says. “There’s a lot who can benefit,” and the Mahoning Valley could serve as a very productive region for those looking to supply Intel or other customers throughout the Midwest.
“We’re in a good position,” he says. “Ohio is being looked at from all over the world.”
U.S. Rep. Tim Ryan, D-13, said during a video press conference Friday that this region could potentially factor into what he called a new modern supply chain emerging as a result of Intel’s anchor project.
“It’s a great sign that within a couple of hours of each other that we have Intel announcing this huge deal and Foxconn announcing their huge deal a few months back,” Ryan says.
The congressman called the announcement a “monumental day in Ohio,” adding that he and others in Congress have been pushing for re-shoring manufacturing for years.
Critical to achieving this is garnering support for the Creating Helpful Incentives to Produce Semiconductors, or Chips, for America Act, Ryan said. The U.S. Senate passed a $52 billion spending package to fund domestic semiconductor production, but the measure has stalled in the House.
“Ohio will never be the same after this investment here,” Ryan says.
The congressman also lauded the bipartisan effort to secure the Intel project, emphasizing the work of U.S. Sens. Sherrod Brown, a Democrat, and Republican Rob Portman. He especially praised the work of Republican Gov. Mike DeWine and Lt. Gov. Jon Husted in their efforts to land the deal.
A show of unity is important to national security interests, Ryan says, placing countries such as China on notice that they can no longer dominate trade in high-tech.
“If we’re going to beat China, we’re going to have to do it in a bipartisan way,” he says.
Portman and Brown, along with Intel CEO Pat Gelsinger, joined President Joe Biden at a press conference at the White House earlier in the day.
“This historic investment is great news for Ohio and for our nation,” Portman said in a statement. “Intel is a world-class company and Ohio is well situated to be the home of their new semiconductor manufacturing center. Ohioans have a great work ethic, and thanks to our world-class institutions, has a highly trained workforce. It’s a great match.”
Brown added that Intel’s arrival would help redefine Ohio’s economy for decades to come.
“Today, we are burying the term ‘rust belt,’” Brown said. “Intel’s record investment in our state confirms what we already know: Ohio workers represent the vibrant, dynamic workforce who will lead our country into the future,” said Brown. “This plant will mean 10,000 new, good-paying jobs, and it will position Ohio as the national leader in this critical, growing industry. We know how to speed up our supply chains, lower prices, and better compete with China: make more things in America – and there’s no better place to do it than Ohio.”
Biden also praised the bipartisan effort, calling it a “historic investment for Ohio and one of the largest investments in semiconductor manufacturing in American history.”
Intel CEO Gelsinger was joined DeWine at an afternoon press conference in New Albany, where the plants would be built.
Gelsinger says the Ohio operation could grow to a $100 billion investment over the next decade, which would include a total of eight chip factories.
“We can help rebuild the U.S. presence in this industry,” he said, noting it could emerge as one of the largest sites of its kind in the world over the next 10 years.
Chip production in the U.S. has nosedived since the 1990s. In 1990, the U.S. produced 40% of the world’s semiconductors; today it’s about 12%.
The company has committed to working with state colleges and universities to develop a talent pipeline to support the project, Gelsinger said. Intel plans to invest $100 million over the next decade to support workforce training and education. Positions at the company range from associate’s degree level to doctorates
DeWine noted the average salary at the plant would be about $135,000.
There are 140 companies in Ohio that already supply Intel, the governor added, and that the new complex stands to “bring in many more. Any company, any place thinking about opening a new plant will simply have to give Ohio a good look,” he said.
The project received a chorus of support from private business and manufacturing organizations.
“This project is a once-in-a-generation opportunity for the Buckeye State and its manufacturing community,” said Ryan Augsburger, president of the Ohio Manufacturer’s Association. “All 88 counties of our state will benefit from this major investment, which serves as the nation’s leading example of re-shoring – a return to domestic manufacturing. Ohio is where world-class manufacturers go to re-shore American manufacturing.
The OMA joined five other organizations – the Ohio Chamber of Commerce, The Ohio Business Roundtable, The Ohio Farm Bureau, NFIB Ohio and the Ohio Council of Retail Merchants – in voicing their support through a joint statement.
“This announcement would not have been possible without the steadfast leadership of the DeWine-Husted administration, as well as our partners at JobsOhio who have worked tirelessly to put Ohio in a position to land this ‘megaproject.’ The Intel investment – which represents the largest economic development project in state history – is only the tip of the iceberg for new economic development in Ohio,” the business groups said.
DeWine said Intel could have placed this project anywhere in the country, but selected Ohio over 40 locations. The deal took nearly nine months to develop, he said, emphasizing the hard work of his administration and JobsOhio, the private development arm of the state.
“We worked, we fought and we won to bring these jobs to Ohio,” DeWine said.
Pictured at top: During an announcement event Friday, Gov. Mike DeWine lauded Intel’s plans to build two semiconductor manufacturing plants in the state.
Copyright 2022 The Business Journal, Youngstown, Ohio.