Onondaga County’s bid for mammoth chip plant: At crunch time, a new company surfaces, McMahon says

July 25, 2022

Originally published in Syracuse.com | The Post-Standard on July 25, 2022.

Two computer chip giants are now considering Onondaga County as a finalist in their search for sites to build new semiconductor manufacturing plants in the United States, according to County Executive Ryan McMahon.

The companies will likely decide on a site within the next two months if Congress passes a bill this week providing $52 billion in incentives for chip makers to open plants in the U.S., McMahon said.

McMahon said he is trying to close a deal with one of the chip giants that would lead to an investment of $40 billion to $90 billion and the creation of 4,000-8,000 jobs over the next 20 years.

“It’s high stakes right now,” McMahon told syracuse.com | The Post-Standard. “We’ve put ourselves in a position to capture a once-in-a-lifetime opportunity for New York state and the United States.”

He added, “If we land the one that we’ve been competing for, this could be the largest project in the country’s history. I feel really good about this.”

Until now, McMahon had acknowledged that the county was concentrating its efforts on luring one “big fish” chip maker or several smaller manufacturers to the 1,250-acre White Pine Commerce Park in Clay.

McMahon declined to disclose the names of the companies. But he said a second big chip maker has entered the picture and is among the companies that sent chief corporate officers to visit the site off Route 31 in Clay this spring and summer.

“We’ve hosted multiple executives from multiple companies,” McMahon said. “These are critical decisions these companies are making, so they’re doing their due diligence.”

McMahon said White Pine is “the best mega-site the country” to host a chip plant because of its size and availability of reliable power, water and sewage treatment capacity that the plants require.

The county has already committed to spending $200 million to expand the Oak Orchard Sewage Treatment Plant in Clay after previous upgrades to improve its capacity.

U.S. Sen. Charles Schumer, D-N.Y., has touted White Pine Commerce Park to some of the chip makers, saying the site is “one of only a few locations in the world” with the capacity and immediate availability of infrastructure to meet their needs.

Schumer, D-N.Y., the Senate majority leader, has said he is involved in direct talks with the CEOs of several companies actively considering White Pine.

Some companies put their decisions on hold when a broader bill with the incentives became bogged down in Congress after the House and Senate passed different versions.

But Schumer said last week that key Republicans decided to support a narrower bill, known as the CHIPS Act (Creating Helpful Incentives to Produce Semiconductors).

Those Republicans helped the bill pass a procedural hurdle, setting up a vote for final passage this week.

Schumer, the bill’s author, said he expects chip makers to decide within weeks of the bill’s passage if they will build new plants at White Pine and a smaller site at the Marcy Nanocenter in Oneida County.

“This is huge for Central New York and the Mohawk Valley,” Schumer said. “We have two large sites ready to get new tech plants that will bring thousands and thousands of jobs to each. One is in White Pine, and one is in the Marcy Nanocenter. The biggest chip companies in the world are looking at them.”

He said other related technology businesses are looking at expanding to sites near Albany and Buffalo.

“The bottom line is every region in Upstate New York will see dramatic benefits – benefits they haven’t seen in years,” Schumer said.

McMahon said the White Pine park is the single largest that’s available in New York. The property has room for eight fabs, or foundries, the individual plants where silicon wafers are turned into intergrated circuits.

Those semiconductor chips are used in computers, home appliances, cars and other high-tech products including weapons systems critical to national defense. U.S. officials say the availability of a domestic chip supply is a national security issue.

Rep. John Katko, R-Camillus, is among House Republicans who agree and plan to vote for the CHIPS Act. The bill includes investment tax credits for semiconductor manufacturers, a measure opposed by some Republicans.

Katko said the incentives are needed in order to compete with European nations, which have offered their own incentives.

“I spoke to a lot of these manufacturers,” Katko said at a virtual event Thursday with a semiconductor industry trade group. “Some of them are very interested in investing in New York state, which would be the largest single project in the history of New York state, probably the country.”

When asked about the investment tax credits, he said, “This isn’t a corporate handout by any stretch of the imagination in my opinion.”

Syracuse native Bruce Andrews, a corporate vice president for chipmaker Intel, said at the event that it costs 30% to 50% less for manufacturers to make their chips in some Asian countries compared to the United States.

Intel, expecting the federal incentives, has committed to opening a series of new chip plants in the United States, with investments of $20 billion each in new facilities planned for Arizona and Ohio.

Intel indefinitely delayed a groundbreaking for the Ohio project that had been planned for Friday because of the earlier uncertainty over the chips legislation in Congress, The Wall Street Journal reported.

McMahon told syracuse.com that Onondaga County was a finalist competing with Ohio for the Intel plant .

Since then, New York lawmakers approved an incentive package worth up to $10 billion to lure semiconductor chip manufacturers to the state.

New York will provide Excelsior jobs tax credits of up to $500 million per year for up to 20 years to any “green” chip plant that meets environmental requirements for greenhouse gas emissions.

Gov. Kathy Hochul asked two state lawmakers from Central New York – Assemblyman Al Stirpe, D-Cicero, and state Sen. John Mannion, D-Geddes – to shepherd the incentive bill through the legislature in June.

Hochul told syracuse.com | The Post-Standard in January that the state would offer a “very robust incentive package” for an undisclosed company to open a chip plant in Onondaga County that would employ up to 5,000 people. She would not reveal details of the incentive package.

McMahon said the state incentives helped level the playing field for New York, offsetting a concern chip makers had raised about paying higher wages for labor when compared to other states.