By Anne Cosgrove
From the January / February 2023 Issue
JobsOhio: Intel is investing $20 billion to build its first semiconductor facility in the U.S. in four decades, choosing Licking County, Ohio.
JobsOhio, the state’s private, nonprofit economic development entity, has had remarkable success since its creation in 2011, but the full power of the entity’s unique model was realized on January 21, 2022, when Ohio Gov. Mike DeWine was joined by President Joe Biden and Intel CEO Pat Gelsinger to announce that the chip manufacturing giant had chosen Ohio’s Licking County as the site for a $20 billion investment in two state-of-the-art semiconductor fabs.
There were 46 sites vying for Intel’s first U.S. semiconductor facility in four decades, and Ohio began as an underdog, but over seven months of negotiation conducted at breakneck speed the economic development team made the case to establish what Intel now is referring to as the “silicon heartland.”
The record investment for Ohio is expected to create 3,000 direct, permanent Intel jobs, with average annual salaries of $135,000, bringing an infusion of income-tax revenue to cities around the region. The benefits of Intel’s investment will extend to all income ranges, through 7,000 construction jobs and thousands more indirect jobs. This is the first major semiconductor operation in the American Midwest, creating the need to build out the supply chain. Today, more than 169 companies in Ohio are already suppliers to Intel.
Intel has said the project could eventually grow to eight fabs, with a total investment of $100 billion. Passage by Congress of the federal CHIPS and Science Act in August made the prospect of further Intel investment even more likely.
The career opportunities and community investment sparked by Intel promises to slow the “brain drain” of young, educated adults leaving Ohio. As part of the deal, Intel has pledged $50 million in grants over 10 years to bolster certificate and degree programs at Ohio institutions.
The Intel effect on education is likely to extend to K-12 schools, too. Writing in The Columbus Dispatch, Frederic Bertley, President and CEO of the Center of Science and Industry in Columbus, OH, likened Intel’s advent to a “Sputnik moment” that will catalyze improvement in public schools, declaring, “The impact of Intel’s investment on STEM education in central Ohio cannot be overstated.”
The Intel project represents a major reshoring initiative in the critical semiconductor industry. In 1990, the U.S. made 40% of the world’s semiconductors, but by 2020 that share had fallen to 12%. Securing the two fabs, with the prospect of up to six more, ensures that Ohio will be a player in the economy of the future.
Yet, when Intel began the search for a site in May 2021, few would have picked Ohio to win. Competitors included 46 other sites and well-established technology clusters on the East and West coasts.
Even after Intel determined that the site in Licking County’s Jersey Township technically met its needs, company officials made clear it was a long shot. JobsOhio’s structure allows it to respond to business opportunities quickly and negotiate confidentially. JobsOhio serves as the convenor of potential partners around the state—regional development groups, local and county governments, educational institutions and state leaders—who can put the necessary resources in place.
Intel’s timeline was extremely short — JobsOhio and its network had only three days to identify a site — and delivered. Then, over the course of seven months, the team was able to assemble a vast tract, work out road and utility issues, and advocate for the state incentives that would seal the deal.
JobsOhio’s governmental affairs team helped bring about a critical interim step with the General Assembly’s bipartisan approval in the 2021-22 state budget of new language for economic development incentives. The change authorized tax credits lasting 30 years (instead of 15) to be considered for “megaprojects”—those involving investments of at least $1 billion and an annual payroll of at least $75 million.
PROJECT IMPACT ESTIMATES
- In 2028, when plant is fully operational, 23,335 jobs, $6.45 billion in economic impact, and $1.9 billion in labor income.
- During the six-year construction, 6,800 jobs, $2.57 million in total economic impact, and $446 million in labor income.
Lt. Governor Jon Husted told The Dispatch, “Until that passed, we weren’t in the running.”
Partners in the Intel deal include: One Columbus, the Central Ohio Regional Development Entity, along with the cities of New Albany and Columbus, Licking County, Ohio State University, Columbus State Community College, and state agencies involving transportation, environmental protection, and development.