Micron Picks Syracuse Suburb for Huge Computer Chip Plant that Would Bring Up to 9,000 Jobs
Micron Technology plans to spend up to $100 billion building a mega-complex of computer chip plants in Syracuse’s northern suburbs in what would be the largest single private investment in New York history.
Micron plans to announce details today about the project, which would create up to 9,000 jobs over the next 20 years at the White Pine Commerce Park in Clay, U.S. Sen. Charles Schumer and Gov. Kathy Hochul told syracuse.com | The Post-Standard.
The project is expected to bring an additional 40,000 supply-chain and construction jobs to the Syracuse area and New York state.
“This is incredible and transformative news for Central New York and for the entire U.S. economy,” said Schumer, D-N.Y. “It’s going to make Central New York one of the centers of high-end chip manufacturing, not just in the United States but in the world.”
Micron would build up to four separate semiconductor fabrication plants in phases at the 1,300-acre site off Route 31, Micron President and CEO Sanjay Mehrotra told syracuse.com | The Post-Standard.
The first project would employ 3,000 people in one $20 billion “mega-fab” that would begin production in the latter half of the decade, Mehrotra said. Site preparation would begin next year, with construction starting in 2024.
The fabs, or foundries, are plants where silicon wafers are turned into integrated circuits, the tiny chips that power personal computers, cell phones and other electronic devices.
Micron said the local employees would be paid an average salary of more than $100,000 per year.
The company’s plans call for building a massive 7.2 million-square-foot complex that will include the nation’s largest clean-room space. The clean-room facilities alone would cover about 2.4 million square feet, about the size of 40 football fields.
“It’s stunning in its scale,” Hochul said in an interview. “The impact is going to be felt for generations. The numbers are staggering. As the first Upstate governor in 100 years, I’ve seen the rise, I’ve seen the fall. Now I’ve been around long enough to see Upstate rise again, and this is going to be the catalyst.”
Hochul said the project would boost the economy across Upstate New York over the next two decades, expanding a corridor focused on semiconductor manufacturing from Albany through Utica and Syracuse.
The news is a huge win for the Syracuse area and New York, which competed with at least four other states including Texas to land the Micron plant. New York offered state and local incentives worth at least $6 billion over 20 years, the officials said.
The deal connects Onondaga County to one of the world’s biggest producers of memory chips. Micron, based in Boise, Idaho, employs more than 44,000 people worldwide and recorded revenue of $30.7 billion in its last fiscal year.
Micron’s investment would tie for the largest by any chip manufacturer since Congress passed the Chips and Science Act that provides $52 billion in incentives for companies to make more components in the United States.
ntel plans to invest up to $100 billion to build eight chip fabs on 2,000 acres outside Columbus, Ohio. The company broke ground last month on the first two plants on 1,000 acres.
Mehrotra said the investment in Central New York would also be the largest in Micron’s history, equipping it to build high-end memory chips for a market that is expected to double in the years ahead.
Schumer, Hochul and Onondaga County Executive Ryan McMahon said they formed a bipartisan team that worked for almost two years trying to lure Micron to Central New York with a package of incentives and a relentless effort to showcase the region’s assets.
“We had at least a weekly meeting,” McMahon said of the team that worked with Micron. “We basically lived together the last 90 days. It was the greatest site-attraction team ever assembled.”
Schumer, the Senate majority leader, said he spoke with Mehrotra more than 50 times over the past two years about the federal incentives and why the White Pine site would be ideal for the company.
“He was very eager for the U.S. to pass the Chips Act,” Schumer said. “And every time we spoke, I told him: I want you to look at Central New York.”
Billions in incentives
Micron would have to apply to the U.S. Commerce Department for the federal incentives. Schumer said he would do anything he could to support the company’s application.
Separately, New York state agreed to an incentive package that includes up to $5.5 billion in Excelsior tax credits over 20 years, Hochul said.
The governor said the incentives would be dwarfed over time by the return on the state’s investment. Hochul said the state expects to collect almost $600 million per year in additional tax revenue, totaling more than $17 billion over 30 years as a result of Micron’s project.
The state also agreed to spend $200 million on road and infrastructure improvements around the site.
Separately, Micron and the state agreed to fund a $500 million community benefits program. Details on the program were not immediately available. Hochul said the program would help create opportunities for people in underserved communities in Syracuse and make sure everyone in Central New York benefits from Micron’s investment.
Micron agreed to invest $250 million into the fund. New York would provide another $100 million. The remaining $150 million would come from local, state and national partners, officials said.
Onondaga County’s incentives include a $10 million investment with Syracuse University to establish a semiconductor research and development center, and $5 million to fund a skills development program for the chip industry at Onondaga Community College.
A Thruway chip corridor
For New York, the deal boosts the state’s profile as an emerging tech hub for chip manufacturing, building on successes in the Capital Region at Global Foundries and at the Marcy Nanocenter near Utica that together employ more than 5,000 people.
Micron would build the largest chip complex in New York – the eighth-ranked state nationally for the number of people in the semiconductor workforce.
The company’s decision is expected to transform the Central New York economy over the next decade, as thousands of high-paying jobs are created and other related tech businesses and vendors for Micron are lured to the region.
Chip manufacturers pay more than $100,000 per year, on average, for skilled production workers that include assemblers and fabricators, maintenance and repair technicians, electricians and engineers.
Most of the openings are filled by college-educated and high-skilled workers, but about 20% of the jobs go to those without a college degree, according to the Semiconductor Industry Association.
The plant will require a massive effort to build, train and attract a skilled workforce that can excel at advanced manufacturing jobs. Those familiar with Micron’s plans say the company is expected to fill the jobs by recruiting locally, nationally and globally.
In addition to the permanent workforce, Micron will need thousands of construction workers to build out its massive complex in Clay for the next 20 years.
An intense recruitment
Micron’s decision culminates an intense effort by county, state and federal officials to lure a semiconductor chip manufacturer to the county-owned White Pine Commerce Park.
State and local officials talked confidently throughout the competition for the plant. They bet on a big piece of available land, generous tax breaks, access to cheap power and an ample water supply from Lake Ontario.
Only a few weeks ago, Schumer, Hochul and Mehrotra, Micron’s CEO, met in Albany in an attempt to close the deal.
During a visit to the New York State Fair on Aug. 30, Schumer said New York leaders were making a full-court press aimed at convincing Micron to choose the state over a competing bid in Texas.
Mehrotra said the company was ultimately drawn to Central New York because of the region’s strong educational system, focus on environmental sustainability and its diversity of talent, including people of color, women and veterans.
“There is just a great alignment between Micron’s values and the values of this community,” April Arnzen, Micron’s senior vice president and chief people officer, said in an interview. “That is really important to Micron.”
Federal chips plan
Micron announced earlier in August that it plans to spend $40 billion between now and 2030 to expand manufacturing capacity for its high-end memory chips in the United States.
The company will be able to draw on unprecedented state and federal incentives aimed at bringing semiconductor chip manufacturing back to the United States.
Supply-chain interruptions during the Covid-19 pandemic exposed what Schumer and other members of Congress viewed as a national security risk with semiconductor chips.
The U.S. accounts for only about 12% of global chip production. Almost all of the world’s most advanced chips are made overseas, mostly in Asia, according to the Semiconductor Industry Association.
Schumer pushed a bill through Congress this summer that will provide incentives for chip makers to open U.S. plants, ensuring a steady supply for products that include computers, smart phones, household appliances, automobiles and military weapons systems.
In the House, Rep. John Katko, R-Camillus, was among 24 Republicans who defied GOP leaders and helped Democrats pass the Chips and Science Act.
Semiconductor manufacturers who apply for the federal incentives will be required to show the U.S. Commerce Department that they have already secured a site for their proposed plant with the backing of the state where they want to build.
Hochul told syracuse.com | The Post-Standard in January that the state had offered a “very robust incentive package” to an undisclosed chip manufacturer to locate at the White Pine Commerce Park.
In June, state lawmakers approved tax credits worth up to $10 billion specifically to lure chip fabricators to the state. Hochul signed the bill into law Aug. 11.
New York will provide Excelsior jobs tax credits of up to $500 million per year for up to 20 years for each chip plant.
To be eligible for the New York incentives, a chip maker would have to create at least 500 net new jobs and spend at least $3 billion in capital investments over 10 years.
Manufacturers who meet those terms could apply for a second 10-year incentive package by creating at least 500 more new jobs and $3 billion more in qualified investment beyond the first phase of the project.
The state would require chip makers who receive the tax breaks to build “green” plants that limit their greenhouse gas emissions and expand employment opportunities for economically disadvantaged workers.
The manufacturing complex could consume up to 10 million gallons of water per day, enough to supply a whole town or village. The entire city of Syracuse, by comparison, uses an average of 40 million gallons per day.
Onondaga County’s strategy
McMahon called White Pine “the best mega-site in the country” to host a chip plant because of its size and availability of reliable water, power and sewage treatment capacity that the plants require.
The county has already agreed to spend $200 million to expand the Oak Orchard Sewage Treatment Plant in Clay after previous upgrades to improve its capacity.
The seeds for White Pine were planted more than 30 years when the county decided to create a large, shovel-ready piece of land for industrial use. For years, nothing happened. McMahon said the spot came close to landing a semiconductor plant in 2019.
Schumer disclosed last year that he was in direct talks with the CEOs of several companies, including Micron, that were actively considering White Pine.
Schumer said he told the CEOs that the Onondaga County site is “one of only a few locations in the world” with the capacity and immediate availability of infrastructure to meet their needs.
New York officials touted the White Pine site in Central New York as a natural extension of a growing tech corridor. Global Foundries in Malta, Saratoga County, employs about 3,500 people in the Capital Region. Wolfspeed, near Utica, recently opened a plant expected to employ about 600 people.
New York lost out earlier this year on an effort to lure chip giant Intel Corp. to White Pine.
Intel broke ground Sept. 10 for its new chip plant outside of Columbus, Ohio. At the groundbreaking, President Joe Biden touted the federal chips incentives as a key to the project.
Biden said Intel’s initial investment of $20 billion will create 7,000 union construction jobs and 3,000 full-time jobs that will pay an average of $135,000 a year.
Micron is considered an industry leader in the development of memory chips that can store data.
The new plant in Central New York will make Micron’s DRAM (dynamic random-access memory) chips, which use a type of memory found in all modern computers. DRAM sales account for more than 70% of Micron revenues.
Micron, traded on the Nasdaq exchange, reported a profit of $8.7 billion in its 2022 fiscal year, which ended Sept. 1. The company said its profit increased 48% from $5.9 billion reported in its previous fiscal year.
Micron’s stock price is down about 44% for the year, consistent with stocks of other semiconductor manufacturers and tech companies. The stock was up $1.68 per share (3.25%) at $53.40 before the market opened Tuesday.
In an earnings call with stock analysts Thursday, Micron said it would reduce its capital expenditures in the short term because of weakening demand. The company said it will move forward with the new memory chip plants because it sees demand growing in the decades ahead.