Two major semiconductor investments for the Empire State this week.
President Biden was in Poughkeepsie, New York today to point to another major investment announced by a technology company since the CHIPS and Science Act passed a few weeks ago. IBM, which once gave us the floppy disk, plans to put $20 billion over 10 years into its facilities in the state for its work in semiconductor manufacturing, artificial intelligence, quantum computing, and research and development.
IBM has a long presence in New York. It was founded there over a century ago, and although it’s now a genuinely global company it still employs over 7,500 people in the Empire State, with most of its footprint in the Hudson Valley. Today’s announcement is obviously a major economic commitment to its presence there; $20 billion is a lot of money, and all of that spending will spur economic activity and create more jobs.
And that’s not even the only major semiconductor news in New York this week. On Tuesday Micron selected the town of Clay, north of Syracuse, as the location for a new chip fab and a potential investment of $100 billion.
The company is forecasting approximately 9,000 new jobs, and another 40,000 created over the next 20 years for the chip fab’s suppliers and contractors. The Syracuse region beat out a town in Texas – Lockhart, near Austin – that was also vying to land the investment. The Lone Star State has also attracted a significant amount of tech manufacturing in the past year.
The through line for all this new spending is the CHIPS Act, which passed Congress a few months ago and makes $52 billion available for grants and subsidies to build or expand semiconductor manufacturing operations in the United States. And while that money’s not available yet – companies can’t apply for it until next year – their investments are all made with it in mind. They all cite it as the impetus for getting their deals done.
“There is no doubt that without the CHIPS Act, we would not be here today.”Micron CEO Sanjay Mehrotra
The New York Times describes the CHIPS Act as unusual in that it “attracted both a rare measure of bipartisan backing in Congress and a rare endorsement of industrial policy.” That’s true. Industrial policy are no longer dirty words, and the other recent example of it – the Inflation Reduction Act, an energy bill that will build out clean energy manufacturing in the U.S. – was passed by the Democrats on a party line vote.
But while today’s event was a Democrat-heavy affair, there’s a demonstrated appetite for this kind of policymaking among Republicans. They voted for the CHIPS Act, which is what’s making IBM and Micron invest heavily there. Compromise is imaginable, which is good, because there are other important American industries that should be considered for federal investment. Learn more about them here.