Ohio Governor Mike DeWine still has high hopes Inteleven as the company announced that its plans to build a massive semiconductor factory east of Columbus could be downsized or delayed.
“I really believe this is the era of the Midwest. I believe this is the era of Ohio,” DeWine, a Republican, said in an interview.
Intel said it would cancel its July 22 groundbreaking ceremony at the site pending Congress’ passage of the CHIPS Act, which includes $52 billion in aid to the U.S. semiconductor industry to revitalize a key link in the domestic supply chain.
“The idea of delaying the official announcement, it sucks,” Intel CEO Patrick Gelsinger told CNBC during an appearance on CNBC’s Sara Eisen on Wednesday. Aspen Festival of Ideas.
But Gelsinger said it would be pointless to move on without legislation and aid.
“This is a huge signal to the industry, the tech community and the world that America is serious about building this industry on American soil,” Gelsinger said.
company report Profit last year was $20 billion.
DeWine said the delay was a negotiating tactic the company used to pass the legislation.
“I don’t think they want to be in a position to say to Congress that we’re breaking ground and Congress still hasn’t passed the CHIPS Act,” he said. “I think it might be a bit of leverage, or a bit of, hey, let’s pay attention to that.”
Dwyane, a former U.S. senator and congressman, said he had reassurances from former colleagues in both parties that the law would be passed soon.
He said Intel has been telling state officials that the scope of the project depends on CHIPS Act funding.
Republican Gubernatorial-elect Ohio Attorney General Mike DeWine gives his victory speech after winning the Ohio gubernatorial race at the Ohio Republican Party’s election night party at the Sheraton Capitol Square on November 6, 2018 in Columbus, Ohio.
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Gelsinger confirmed that Intel remains committed to Ohio, but said the scope of the project depends on the passage of legislation.
“When we make announcements, we say we’re either going to be slow and small, or we’re going to be big and bold,” he said.
DeWine said Intel told his team that the CHIPS Act funding would be the difference between a $20 billion project built in a few years and an $8-100 billion investment “in a relatively short period of time.”
“But they also said, ‘Look, if we don’t have the CHIPS Act, we can’t do this. We’re going to come to Ohio, but we’re not going to roll it out anytime soon.'”
In Aspen, Gelsinger said that if the CHIPS Act does not pass, more investment may be diverted to Europe.
Rust Belt “Silicon Heartland”
Even a scaled-down development has the potential to be transformative for Ohio, once thought to be the buckle of the rust belt. Intel calls the project and the supporting businesses expected to grow around it the “Silicon Heartland,” leveraging the region’s manufacturing heritage and leveraging a new tech talent base from nearby Ohio State and other schools in the Midwest.
The Ohio State University has added 100 new engineering faculty positions when it announced the plant, and President Christina Johnson sees the school playing a role similar to that played by her alma mater Stanford University in Silicon Valley.
“I’ve seen how you can work with community colleges to create pathways to university research universities like Stanford or Berkeley,” she said in an interview. “We’re creating a network. A Midwestern semiconductor research network.”
The ability to develop a regional talent pipeline was a key consideration in choosing Ohio, said Keyvan Esfarjani, Intel’s chief global operating officer, who oversaw the site selection process.
U.S. President Joe Biden puts his arm on Intel CEO Patrick Gelsinger during an event on ongoing supply chain issues in the South Court Auditorium of the Eisenhower Executive Office Building on January 21, 2022 in Washington, DC. Gelsinger announced that Intel Corp. will invest $20 billion to develop a new semiconductor manufacturing facility in Ohio.
Chip Somodevilla | Getty Images
“We can go there, we can build talent, we can build skills.[There are]top universities. We have Purdue, University of Michigan, University of Illinois, Ohio State, Carnegie Mellon, Georgia Tech, I mean, these are target schools,” he said.
Another draw, he said, is the region’s infrastructure, including a 1,000-acre site in rural Liking County, east of Columbus, with ready access to the vast water resources needed for a modern semiconductor factory. Intel will include nearly $700 million in infrastructure improvements of the $2 billion in awards it collects in Ohio.
As the U.S. seeks to underpin domestic supply chains for products like semiconductors, these factors — labor and infrastructure — are often at the top of the list for companies looking to build large-scale projects, site-selection experts told CNBC.Workforce and infrastructure are also CNBC’s two most important categories for 2022 America’s Best States for Business The rankings will be announced on July 13.
Inclusiveness of site selection
The Intel fab came too late for Robert Yengo, a fresh graduate of Ohio State engineering who grew up in the Columbus area and will start his first job in Texas. But he’s excited to see potential developments, and he hopes Intel will bring opportunities to underserved communities in the region.
“Columbus has a lot of human capital, but it’s underdeveloped,” he said.
Diversity, equity and inclusion were priorities in Intel’s site selection process, Esfarjani said, and he said some states — he didn’t specify which ones — were excluded from consideration because they weren’t inclusive enough.
“The diverse talent pool we have in Ohio is second to none,” he said. “Whether it’s race, or women in tech from surrounding colleges or community colleges, I mean, that’s a big check mark.”
A potential stumbling block, especially on the “women of technology” side, is Ohio’s strict ban on abortion after six weeks of pregnancy, which DeWine signed into law in 2019 and is now in effect after the Supreme Court overturned Roe v. Wade.
Intel declined to comment on the law but reiterated its commitment to pay for out-of-state travel for employees who need reproductive health care.
“Health-related decisions are the most personal, and Intel respects the rights and privacy of our employees to choose what best meets their health needs,” the company said in a statement. “As part of our overall Planned Parenthood benefits, our health care options in the U.S. cover a wide range of medical treatments, including abortion.”
DeWine said the topic of abortion was not mentioned in the state’s discussions with Intel, either before or after the Supreme Court ruling.
“Abortion is something for rational people on both sides of the issue,” he said. “My emphasis in Ohio is that we need to focus on what we can agree on. We can agree because we need to help the child.”
DeWine said he has no problem with Intel paying employees for out-of-state travel.
“If they obey the law, and they will obey the law, then we won’t be involved,” he said.