Ohio… the new “Silicone Heart”
Later in the world, Intel, one of the world’s largest technology companies, will open two new semiconductor plants on a 1,000-acre plot of land in New Albany, Ohio. This $20 billion investment could create 3,000 jobs. This new Albany plant, in particular, could help meet American demand for semiconductors, the tiny electronic chips used in everything from cell phones to military equipment.
The deficit in these segments has become a prominent symbol of supply chain problems exacerbated by the pandemic and of exacerbating geopolitical tensions between Russia and China. But political and business leaders are beginning to reconsider the increasingly globalized supply chains of the twenty-first century, especially in such integrative pieces of technology.
Many in Ohio see investing in this industry as going beyond just global competition. They believe the New Albany manufacturers are reasserting Ohio’s identity as a place of manufacturing. Republican Governor Mike DeWine described manufacturing and innovation as “part of Ohio’s DNA,” one of the many reasons why Intel chose Ohio out of 40 competing states. Her view reflects the broader aspirations of a region with a heritage of innovation that extends from farm plow developer John Deere to the Wright brothers and Henry Ford.
Mark Morrow, director of policy at Brookings Metro who studies the geography of the digital economy, sees the Intel factory as “an objective lesson in the kind of high-quality economic development we can see in the Midwest, and it builds on the history of manufacturing in the region. This is better for the general sense of opportunity in the country. If 45 states do not participate in the development of basic technology, it means that they are disadvantaged and marginalized.” Although current chip factories in the United States are largely concentrated in the Southwest, the availability of water, a necessary resource for semiconductor production, and the concentration of Ohio’s top-ranked engineering schools may make the state a hub for what Intel CEO Pat Gelsinger considers , the “silicon heart” of the future after it was called the “rust belt” of the industrial Midwest.
Ohio, as the region’s manufacturing leader, accounted for more than 20% of factory employment among 12 Midwest states in 1990. But as the region has deteriorated since then, Ohio has been hit even more, with nearly 360,000 industrial jobs lost. Intel’s new factories will have little effect on offsetting those losses, but it is an important step toward rebuilding Ohio’s manufacturing sector, experts and local workers say.
Congress may help. The House and Senate have passed bills to improve domestic manufacturing efforts. The House of Representatives passed the Competitive America Act with bipartisan support in February, and the Senate passed the American Competition and Innovation Act late last month. Reconciliation between the two bills is expected to begin shortly after Congress returns from the weekend of April 25, with staffers hoping to send a final version of the bill to President Joe Biden by early summer. Both bills, which are popular with Republicans and Democrats alike, include the creation of “Auxiliary Incentives for America’s Semiconductor Production” and allocate $52 billion to semiconductor manufacturing and research.
Intel plans to start work in New Albany even if the two bills are not passed. This is indeed the largest investment in Ohio’s history, but it will not grow at the same speed without this strengthening of existing government subsidies and incentives for the project. Gelsiner, chief executive of Intel, said the company could eventually have investments of about $100 billion and have the world’s largest semiconductor manufacturing site. An Intel official confirmed to the Christian Science Monitor that they expect to hire 3,000 full-time employees at New Albany, ranging from equipment technicians to engineers. To fill engineering jobs, Intel has partnered with Ohio State University — a move that leaders from Ohio State University see could help reverse the long-running “brain drain” from the Midwest for highly educated youth moving to coastal cities.
Only recent geopolitical developments have confirmed the need for such a project, according to some officials and policy experts. They pointed to the Russo-Ukrainian war, which hints at potentially profound economic repercussions, and turmoil in Taiwan. It is true that the United States is a leader in chip design, but 75% of the world’s chips are currently made in East Asia, and most of the most advanced chips come from Taiwan.
And just 150 miles northeast of the barren fields of New Albany, grass cuts through the concrete parking lots in front of empty warehouses the size of football fields. General Motors’ Lordstown plant used to be one of the world’s largest car-producing plants, but is now empty after closing its doors in 2019. As positive as the Intel project may seem to Ohio, the parties involved in this project must “open their eyes” to avoid a fate Similar to what happened to General Motors in Lordstown, says Bill Shkorty, a former Ohio budget manager and current assistant professor at Ohio State. Shakurti continued, “For 20 years, Lordstown has been a very successful factory, but when competition increased, production decreased. It is true that the state official will have to be very busy making sure that Intel succeeds, but they have to continue to support new economic activities.”
Story Hinckley
American journalist
Published by special arrangement with the Christian Science Monitor service.
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