Biden signs CHIPS Act, paving way for Intel buildout of New Albany site

The CHIPS Act has officially become law and with it, the potential of New Albany becoming the site of the world's biggest semiconductor manufacturing operations.

President Joe Biden signed the bill into law Tuesday morning in a ceremony on the South Lawn of the White House in front of politicians and business, labor and educational leaders. The law provides $52.7 billion in aid to the semiconductor industry along with other incentives.

In January, Intel announced plans to spend $20 billion to build two plants in New Albany that will employ 3,000 workers earning on average $135,000 per year. But it said with federal aid, the site could have eight factories and a total investment of $100 billion.

Though Intel has yet to hold a formal groundbreaking ceremony, excavation work has started at the site.

"In my State of the Union (speech in March) I described a field of dreams on 1,000 acres outside of Columbus, Ohio, where America’s future is going to be built,’’ Biden said before signing the bill.

Intel CEO: We could open factory after factory in Ohio

Intel CEO Pat Gelsinger has said he can see the semiconductor company opening a plant every year or two over the next 10 years in New Albany, but that it was dependent on the aid package.

“We are thrilled to see funding for the CHIPS Act enacted into law. Intel is committed to restoring end-to-end leadership, innovation and manufacturing here in the U.S. We are doing our part and the federal government has now done their part," Gelsinger said in a statement released by the company Tuesday.

“The CHIPS Act is now law, and we are ready to reestablish America as a leading chip manufacturer and Ohio as the best state to do it," Lt. Gov. Jon Husted said. "Our work has just begun."

"This was a very important day. The president signed the bill. Congress had passed it and it really incents Intel to move forward exactly as they told us they would," Gov. Mike DeWine told reporters at an event where first lady Fran DeWine was hosting Dolly Parton. 

The legislation, called Creating Helpful Incentives to Produce Semiconductors in America, allocates $52.7 billion in subsidies for companies to research, design and manufacture semiconductors and to help with workforce development.

Of that money, $39 billion is for manufacturing incentives, including $2 billion for the legacy chips used in automobiles and defense systems, $13.2 billion in research and development and workforce development, and $500 million to provide for international information communications technology security and semiconductor supply chain activities.

The legislation provides a 25% tax credit for capital expenses for making semiconductors and related equipment. 

Semiconductors: The life blood of modern manufacturing

The White House has said the incentives will secure domestic supply, create tens of thousands of good-paying, union construction jobs and thousands more high-skilled manufacturing jobs, and be a catalyst for hundreds of billions more in private investment.

Semiconductors are tiny devices, about the size of a fingernail, that have become the brains of everything from cellphones to gaming consoles to military equipment. The pandemic has exposed global weaknesses in supply chains that have made it tougher to buy new cars and appliances as U.S. production of the world's semiconductors has fallen from 37% in 1990 to 12% today,

Intel has said it doesn't know yet how much it will benefit from the law and that it doesn't expect to see benefits from the bill until next year.

Beyond the federal legislation, Ohio is providing Intel with more $2 billion in aid, and New Albany is giving the company a property tax abatement on the site.

Several local officials were among those in attendance for the ceremony, including Columbus State Community College President David Harrison, Ohio State University President Kristina M. Johnson and Kenny McDonald, president and CEO of the Columbus Partnership, the region’s most-powerful civic and business organization that is made up of more than 80 area CEOs. 

Intel has announced a $100 million commitment in semiconductor education and research programs in order to staff its newly announced factory near New Albany.

Of that amount, half will go to Ohio higher education institutions, with an additional $50 million to be matched from the National Science Foundation for national funding opportunities.

"It's a reflection of the importance not just by Intel but the industry places on community colleges and technician education," Harrison said of his invitation to attend the event.

Those kinds of wages can close the gap on income inequality issues that the region faces, Harrison said.

"We've got a lot of communities in our region that haven’t been connected to the economic prosperity in our region. The ability to connect this opportunity to our priorities of closing gaps for income inequality and economic mobility, I really think we’ve got an opportunity to do that here,’’ he said. 

The bill-signing marks the beginning of what is possible with Intel in Greater Columbus, Harrison said.

Passage of the bill means the region needs to do more and do it faster, he said.

"As a community, we need to be ready to do that. I absolutely believe we are," he said.

“The CHIPS Act is a significant down payment on our future and signals that the U.S. intends to compete on the international playing field of the fast-growing semiconductor industry," Johnson said in a statement. "The significance of this legislation cannot be understated. It bolsters U.S. economic competitiveness and makes a significant investment in our most important asset — the American workforce — ensuring our success for years to come. Ohio State is proud to be able to play a part in this transformative effort.”

Nothing about the CHIPS Act has been easy.

The House and Senate initially passed their own versions of the bill, but then struggled to reconcile the differences as the Biden administration and the semiconductor industry pressured Congress to act. Congress finally passed the legislation last month, leading to the signing ceremony at the White House.

"This is real. It's big. It's happening. You feel both a great sense of responsibility and pride," Partnership leader McDonald said before the House vote last week. "We want to do things right."

mawilliams@dispatch.com

@BizMarkWilliams