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Friday’s unveiling of Silicon Valley chip maker Intel’s $20 billion investment for a new central Ohio factory won’t have an immediate impact in Ohio or the Mahoning Valley when it comes online, expectedly in 2025.
But local, state and federal officials told Mahoning Matters it has a vast future potential to relieve electronics supply chain disruptions now holding local companies back and reshore future-facing manufacturing jobs in what officials on Friday dubbed the “Silicon Heartland” — as many as 3,000 permanent jobs at the Licking County facility in the first year, and 7,000 jobs for builders.
“This is a monumental day here in Ohio. The impact of the Intel announcement is going to be felt in every corner of Ohio,” U.S. Rep. Tim Ryan of Howland, D-13th, told reporters Friday, adding that the Silicon Valley chip maker’s projected $100 billion in investments nationwide over the next decade “could mean a lot for our local communities.”
“I’ve already been in touch with mayors and economic development people to get ready for that. They’re beating the bushes to figure out how everyone can get a little piece of this action,” Ryan said.
Andrew Resnick, spokesperson for the Youngstown-based America Makes, a national public-private partnership for additive manufacturing, or 3D printing, told Mahoning Matters on Friday the ripples from the Intel deal are “an innovation windfall. It’s a brain power windfall.”
There’s an “incredibly strong base” of about 500 additive manufacturing companies in Ohio.
“Any time you get this large of an investment into an innovation ecosystem that’s already up and running, it’s gonna lift the whole thing. It’s going to spur innovation even more,” he said.
“All that’s coming [to Ohio] is going to benefit the existing infrastructure here,” Resnick said. “The Mahoning Valley is the place to be. The Mahoning Valley is the center of it.”
The factory’s location in central Ohio will also likely be a great logistical boon for any nearby manufacturer, he added.
Electric-vehicle parts-maker Lordstown Motors Corp. in its most recent quarterly report told investors the global semiconductor shortage has had “wide-ranging effects across the automotive industry,” including a lack of supply that could delay the testing and production timelines for its all-electric pickup truck, the Endurance.
“A growth in popularity of electric vehicles without a significant expansion in battery cell production capacity or sufficient availability of semiconductors could result in shortages, which would increase our cost of materials or impact our prospects. These factors could also delay our overall production timeline and limit production volume,” reads the report.
That report was filed in November, not long after the company inked a deal with Foxconn, which would see the Taiwanese electronics giant take over the 6.2 million-square-foot former General Motors plant as well as production of the Endurance. Foxconn also plans to manufacture another electric vehicle, for Fisker Inc., at the Lordstown plant.
“The demand for automotive semiconductors will continue to soar and domestic production is critical,” Dan Ninivaggi, CEO of Lordstown Motors, wrote in a statement Friday to Mahoning Matters. “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.”
It’s unclear how parts buyers like Lordstown Motors could integrate into new supply chain growth in the state, Ryan told reporters Friday, but said Intel’s move is promising.
“This is starting to look a lot like the old-school supply chain here in Ohio, where we had steel production, aluminum production, rubber in Akron, glass in Toledo, and now it’s chips in Licking County north of Columbus,” Ryan said. “It’s electric trucks and cars in the Mahoning Valley.”
Forrester analyst Glenn O’Donnell told The Associated Press on Friday the chips to come from the New Albany factory likely won’t be used for automobiles, instead for corporate data centers, many of which have just recently come to Ohio, and high-end home computers used by gamers.
The video game industry is also feeling the semiconductor pinch, which has contributed to long-running unavailability and soaring aftermarket costs for the latest graphics processors.
Rick Stockburger, president and CEO of BRITE Energy Innovators in Warren, the state’s only energy technology incubator, said semiconductors are “unbelievably important” to his clients’ developments and electromobility efforts in the state.
But the Intel move has a much broader impact, he said.
“The bigger sea change it’s going to bring is re-Americanizing our supply chain. Semiconductors have been an issue since before COVID,” Stockburger said, adding it’s also an opportunity for “good-paying ‘future’ jobs” in emerging industries.
The #IntelOhio megaproject will be the largest single private sector company investment in our state’s history. The semiconductor manufacturing facilities will generate more than 20,000 Ohio jobs. #BuiltForThishttps://t.co/sWXk0rAfQP@intel@LtGovHusted@JobsOhiopic.twitter.com/8xrkayOG9C
— Governor Mike DeWine (@GovMikeDeWine) January 21, 2022
#IntelOhio will have nationwide impacts. Decades of offshoring chip manufacturing led to supply-chain disruptions in the U.S. that crippled major sectors of the economy during the pandemic. #IntelOhio will help reverse this trend. https://t.co/sWXk0rAfQP#BuiltForThispic.twitter.com/txaZ9lwvyU
— Governor Mike DeWine (@GovMikeDeWine) January 21, 2022
Ohio’s U.S. senators joined Gov. Mike DeWine, Lt. Gov. Jon Husted, Intel CEO Patrick Gelsinger and other state and federal officials for a boisterous live event Friday at The Midland Theatre in Licking’s county seat of Newark.
“Today, we are burying the term ‘rust belt,’” U.S. Sen. Sherrod Brown of Cleveland, D-Ohio, said in a statement Friday. “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.
“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.”
U.S. Sen. Rob Portman of Cincinnati, R-Ohio, said in a statement Friday: “This historic investment is great news for Ohio and for our nation. 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, [Ohio] has a highly trained workforce. It’s a great match.
“While bringing thousands of high-paying jobs to Ohio, this historic investment will also help reshore semiconductor chip manufacturing, which has faced an international shortage over the past few years,” Portman continued. “U.S. dominance in semiconductor manufacturing has been dwindling for decades, and it’s both an economic and national security concern.”
At the outset of the COVID-19 pandemic, auto sales dropped — so automakers stopped buying as many semiconductor chips, Portman’s office noted. As many Americans started working from home, consumer electronics companies started scooping up those available chips to meet the rising demand for at-home computing.
Though auto sales have since rebounded, Portman’s office noted, automakers now can’t find enough chips to meet demand.
Ohio Manufacturers’ Association President Ryan Augsburger lauded Intel’s decision in a statement Friday:
“This project is a once-in-a-generation opportunity for the Buckeye State and its manufacturing community,” he wrote. “All 88 counties of our state will benefit from this major investment, which serves as the nation’s leading example of reshoring — a [return] to domestic manufacturing. Ohio is where world-class manufacturers go to reshore American manufacturing.
“Over the past two years, the chip shortage has cost manufacturers hundreds of billions of dollars in lost revenue. The trickle-down effect has impacted every American family and business, and magnified the need for a resilient domestic supply chain of semiconductors. Where better to do that than right here in Ohio?”
