READER’S VIEW: Urgency needed to strengthen supply chains, grow US semiconductor industry

By David Catalfamo

The future of America’s economy is semiconductors. And the future of semiconductors is in New York. That is, if Congress understands the urgency of passing two vital initiatives before time runs out.

These two initiatives – $52 billion in CHIPS Act grant funding to support domestic chip manufacturing and an investment tax credit to incentivize capital expenditures in the construction of new semiconductor facilities – could become law by the end of the month. Congress only needs to act. Both measures have broad support from Members of Congress of both parties.

They’re just getting bogged down in the kind of political horse trading that is frustrating so many Americans.

Semiconductors are ubiquitous. They power our personal electronics. They are used in the operation of our electric grid. They make medical care more accessible and accurate. From your cell phone, to your refrigerator to our cars they are everywhere and power almost every aspect of our daily lives.

Semiconductor manufacturing employs over 10,000 New Yorkers and ranks as the Empire State’s 10th largest export.

And when chips become hard to obtain, their scarcity disrupted our entire economy. Look no further than what has transpired in the auto industry over the past 2 years. The congested global supply chain exasperated a chip shortage that caused automakers to idle plants all over the country. The cost of new, and even used, cars skyrocketed. Employees were sent home wondering if they would ever go back to work.

This is what happens when we allow foreign governments to outmaneuver us. Other countries have spent decades instituting policies and incentives that boosted their own chip-making capacity, such that American semiconductor manufacturers now have a declining share of global chip-making capacity. Make no mistake. U.S.-headquartered chip makers are the most innovative and industrious in the world. But US policy has hamstrung them.

Semiconductor manufacturing is among the most capital-intensive industries in the world, with the average chip-making facility requiring billions of dollars in upfront investments before production even begins. Before investing those kinds of resources, employers need to know they have a policy pathway that supports their decision. And guess what? The decisions about where to break ground on new facilities is happening now.

Demand for these products is at an all-time high.

Today, America doesn’t have the ability to make the most advanced chips. In fact, 75 percent of chip production takes place in East Asia and 90 percent of the most advanced chips are made in Taiwan. We want them made right here, from a national security perspective we need them made. Not in China or Taiwan.

When I had the privilege of serving as senior vice president of the Empire State Development Corporation during the Pataki administration, we looked into the future and knew we had to establish semiconductor manufacturing as a key sector of our state’s economy. Through initiatives like Semi-New York, the Empire Zone Program and the creation of Albany Nano, we did just that leading to the attraction of what we know today is GlobalFoundries.

New York State has the workforce and the infrastructure to compete and win in this industry as demonstrated by Wolfspeed’s decision two years ago to build a new $1.2 billion silicon wafer fab in Marcy, New York, just outside of Utica.

But we can’t go it alone anymore, with massive investments and opportunities on the drawing board for many chip manufacturers, for New York to win – for America to win – we need a partnership with the federal government. Today, there are active and serious negotiations with chip manufacturers to build in communities literally across the state. Passage of the CHIPS Act funding and an investment tax credit is a bold, forward-leaning strategy that will position the U.S. and New York as a world leader in chip making.

The failure to act will chase jobs and investment overseas and make America less safe.

Congresswoman Elise Stefanik has been a strong and vocal leader in advocating for these initiatives.

That is because she understands how this industry has boosted the economy of the Capital Region and the Mohawk Valley. Unfortunately, some in Congress have tried to attach other superfluous spending and policy priorities to these initiatives bogging down negotiations. In the coming weeks her continued leadership is critical to convincing her colleagues in Congress for the immediate passage of these two pro-American, jobs-creating proposals as standalone measures.

Dave Catalfamo, a Town of Wilton resident and the current economic development Director for Oneida County, is a former senior vice president at Empire State Development and has been involved in the siting of every chip fab built in New York State for the last 30 years. He is a candidate for the 113th Assembly District.

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