The Intel manufacturing plant taking shape on a leafy lot outside Columbus is one of the most expensive and consequential investments in the United States in recent years — one that offers huge potential benefits for the economy, but also faces significant challenges to succeed . Billions of dollars in federal subsidies, approved in the recently signed law, convinced California-based Intel to move forward with the project, which aims to dramatically boost domestic manufacturing of the tiny components that power all modern electronics, from laptops to fighter jets aircraft. But ramping up the massive manufacturing zone will require a lot of effort, including consistent, long-term investment in the face of potential recessions and fickle Wall Street investors, and training thousands of engineers and technical workers amid labor shortages. A new era of industrial policy begins with the signing of the CHIP Act In a speech, Biden said the project — and a series of other major semiconductor investment announcements — are a nod to his push to use $52 billion in taxpayer money to incentivize the renewal of manufacturing seen as vital to the economic and national security of the United States. The approach has also won broad support from Republicans, who want to boost U.S. competitiveness against China, which is pouring government funding into tech manufacturing. “Federal investment attracts private investment. It creates jobs. It creates industries. It proves we’re all in this together,” Biden told a crowd of hundreds who gathered to watch the groundbreaking ceremony, including local officials, Ohio’s governor and senators and engineering professors from across the Midwest. “This is about our financial security. This is about our national security. These are good-paying union jobs where you can raise a family in … jobs that show the industrial Midwest is coming back,” Biden added during a ceremony that featured a gospel choir, the Ohio State University Band (“The Best Damn Band in the Land,” noted more than one speaker) and a panorama of dump trucks and diggers. Intel CEO Pat Gelsinger and other speakers highlighted the promise of bringing to the Midwest a profitable high-tech industry previously located primarily on the West Coast. With the investment, “we have declared the end of the Rust Belt and the beginning of the Silicon Heartland,” Gelsinger told the crowd. The federal subsidies, part of the chip law signed into law last month, are fueling a wave of investment in chips. Micron is holding its own groundbreaking ceremony Monday for a $15 billion chip factory near its headquarters in Boise, Idaho. Chipmaker Wolfspeed on Friday announced plans to build a new manufacturing facility in Chatham County, North Carolina. In Detroit, the lack of chips has left the city woefully short of cars Taiwan’s TSMC, the world’s largest chipmaker, said it will seek subsidies for a $12 billion factory it has begun building in Phoenix and plans to complete by the end of next year. And a partnership between SkyWater Technology and Purdue University will apply for a federal grant to build a new $1.8 billion plant and research facility next to the university in West Lafayette, Ind. The United States today is heavily dependent on Asia and particularly Taiwan for chip manufacturing, a dependence that has worried American officials as the self-ruled island’s tensions with China rise. Concerns about that dependence have soared in the past two years amid global chip shortages that have plagued all manner of manufacturers, including automakers, which have been forced to halt production for weeks at a time. Asian governments have long subsidized chipmaking, helping them to eat up the lion’s share of production in recent decades, at the expense of the United States and other Western countries that have taken a more laissez-faire approach. Chip factories are among the most expensive manufacturing facilities to build, costing $10 billion or more, making many investors reluctant to build them without government help. About 37 percent of the world’s semiconductors were made in the United States in 1990, up from about 12 percent in 2020, according to the Semiconductor Industry Association. Willy Shih, a Harvard Business School professor who specializes in technology and manufacturing, praised the subsidy program for spurring vital investment, but said that to compete with Asian chipmakers, domestic manufacturers and the U.S. government must she is ready to “play a very big game”. That could require even more federal spending down the road. “The US and the president should not be misled that the $52 billion from the CHIPS and Science Act is nothing more than a down payment,” Shih said. Congressional enthusiasm for additional subsidies is far from certain. Some Republicans remain skeptical of using taxpayer funds to incentivize the industry. Some progressives are also wary, including Sen. Bernie Sanders (I-Vt.), who ultimately voted for the Chips Act but called it corporate welfare for a highly profitable industry. The two new Intel factories, scheduled for completion in 2025, will create 3,000 Intel jobs and about 7,000 manufacturing jobs, the company said, adding that those numbers will increase significantly if Intel chooses to continue building the site, which can accommodate eight chip factories in all. Dozens of suppliers creating thousands of additional jobs are expected to cluster around the factories, creating secondary economic benefits. With striking similarity, speaker after speaker at the event expressed hope that the investment will allow young Ohioans to stay in the state instead of leaving for the coasts to pursue careers. “We’re going to keep more of our children and grandchildren here in our state because of opportunities like this,” JP Nauseef, CEO of the economic development group JobsOhio, told the crowd. Local residents who attended the ceremony expressed modest optimism about the project and the jobs it will bring. However, some worry that property values will exceed the means of current residents. And Todd Huston, a local IT professional with a degree in biology, said he has concerns about the environmental impact. “My daughter lives half a mile from the factory – they are building a house – and my granddaughter is one year old. So I had concerns about their health,” Houston told The Post on the sidelines of the ceremony. “So I started looking at the chip-making process, the facilities, and I was concerned because of the amount of chemicals, acids, solvents used in the process.” He was also concerned about air emissions from factories. Houston said an Intel official contacted him after seeing his social media posts about the issue and answered his questions about the environmental impact. “I haven’t seen or experienced any kind of redirection or violation in terms of questions that I present to them, so that’s encouraging,” he said, adding that he’s partly reassured to learn about the Environmental Protection Agency regulations the project must follow . Intel has said its manufacturing plants will meet the highest environmental standards. Neighboring states hope to take advantage of the cluster of suppliers that industry experts say is set to develop around the Ohio site. Giant chip factories need chemicals, white silicon wafers for etching, and suppliers of equipment and services. “Microelectronics comes in clusters. We think Indiana and Ohio are a cluster,” Indiana Commerce Secretary Brad Chambers said in an interview this week. “This Silicon Heartland idea I think is real.” Indiana has created a task force to try to attract some of that investment, hoping to use Purdue University and the many engineers it trains as a draw.
