A $100 Billion Bet on Semiconductors Hinges on Remaking Upstate New York’s Workforce

CLAY, N.Y.—A shortage of skilled workers in places such as this Syracuse suburb is posing a major challenge for the Biden administration’s ambitious plan to spur chip manufacturing in the U.S.

Micron

MU 0.34%

Technology Inc. plans to invest $100 billion to open a semiconductor-manufacturing campus here, with construction starting in 2024 and production beginning in the latter half of the decade. 

This snowy outpost isn’t an obvious place to reshore an industry from overseas. Its working-age population has declined over the past two decades as other big companies pulled out. The new jobs require highly skilled engineers and technicians already in scarce supply nationwide. At least two other semiconductor manufacturing companies considered expanding here but opted against it after evaluating the area, county leaders said.

To make the plan work, civic leaders are trying to cultivate a new workforce in what they say is a once-in-a-generation opportunity to rejuvenate a postindustrial region. Local colleges and universities are overhauling their education and training programs to vastly increase the number of new engineers they produce and teach technical workers skills such as supply-chain management and orbital welding.

“We have to remake a decade of workforce development in two or three years,” said Duncan Brown, vice president for research at Syracuse University. “It wasn’t just the manufacturing that went offshore but it was also the talent pipeline that went offshore.”

The Micron project is a key part of President Biden’s effort to bring advanced chip manufacturing back to the U.S. and bolster national security by making America less reliant on Taiwan and other far-away countries. Semiconductors, silicon wafers that power most modern equipment, were invented in the U.S., but many companies moved their factories abroad in search of cheaper labor and to tap incentives offered by foreign governments eager to become chipmaking hubs. Chip shortages during the pandemic highlighted the hazards of outsourcing an entire industry. 

To attract chip makers here, Mr. Biden last year signed the Chips and Science Act, which includes $39 billion in manufacturing incentives for companies to build complex fabrication centers and for related suppliers. Micron Chief Executive Officer

Sanjay Mehrotra

met with White House officials frequently while the law was being written, pressed publicly for its passage and announced the company would build in New York several months after the law was enacted.

Boise, Idaho-based Micron has said it would apply for some of the federal incentives, a process that begins at the end of the month. The chip maker also will benefit from $5.5 billion in state subsidies from New York. Micron said it plans to employ 9,000 workers at the Syracuse-area campus when it is fully built by 2045, and predicts another 41,000 jobs for contractors and suppliers.

Syracuse, like other parts of the Rust Belt, experienced population declines starting in the 1970s as manufacturing companies left the region. Major manufacturers that have departed include General Motors Co., Allied Chemical, and Carrier Corp. Onondaga County is roughly the same size as it was in the 1970s, with about 473,000 people. The number of residents between the ages of 25 and 44 has declined 10% in the past two decades, according to census figures.

Regional employment in the Syracuse metro area peaked in 2000, according to the U.S. Bureau of Labor Statistics, and has yet to rebound to prepandemic levels. 

Micron viewed New York’s well-established semiconductor industry as another benefit of the region, the company said, with over 70 such companies operating in the state.

International Business Machines Corp.

is investing $20 billion in the Poughkeepsie area to expand semiconductor manufacturing, artificial-intelligence programs and quantum computing. Yet the pool of talent around Syracuse to fill thousands of highly specialized new jobs isn’t big enough.

“These are some of the most complicated manufacturing facilities ever invented by humankind,” said Sujai Shivakumar, a former director of the Innovation Policy Forum at the National Academies of Sciences, Engineering, and Medicine.

April Arnzen, Micron’s chief people officer, said the company is planning to build a pipeline of workers by investing in local training centers and providing $10 million to K-12 schools to beef up their curricula in science, technology, engineering and mathematics. Micron is also collaborating with local community colleges and universities to make sure their graduates are ready to work for the company, she said.

“Partnership with those institutions is incredibly important because we do have to scale,” Ms. Arnzen said. “Nine thousand jobs is going to be a significant task.”

To help Micron, Syracuse University plans to increase the size of its undergraduate and graduate engineering programs by 50% over the next three to five years.

Photos: There Aren’t Enough Chips—Why Are They So Hard to Make?

Syracuse is recasting an engineering degree to be more welcoming, hoping to increase its ranks in part by attracting more women and minorities who are underrepresented in the field. “One of the biggest problems we have is communicating to this next wave of students that this line of work is for them,” said J. Cole Smith, dean of Syracuse’s College of Engineering and Computer Science. The engineering program has given every student a faculty adviser, a student success adviser and a career adviser to better support them. 

Onondaga Community College will offer a new degree program for semiconductor technicians starting this fall. College leaders are drawing up plans to install a $10 million cleanroom, which replicates the hypersensitive environment of an advanced manufacturing workspace, in a two-story building occupied by the campus bookstore. Over the summer, the college plans a three-day “chip camp,” funded by Micron, for middle-school students to generate awareness about advanced manufacturing.

Even construction workers will require specialized training to operate in the ultraclean environments the fabrication facilities require, according to union leaders. 

Over the next five years, demand for engineers at U.S. semiconductor facilities is expected to grow by about 20%, according to the Semiconductor Industry Association, adding more pressure to an industry where there are already unfilled jobs.

At the same time, plans for expansion in the semiconductor industry are coming when the industry is going through a slump. Demand for semiconductors dropped off after personal-computer and smartphone sales fell. Micron said in December that it would reduce its workforce by 10% and reduce executive salaries, and that it would cut back on capital spending.

SHARE YOUR THOUGHTS

Can chip manufacturing be successfully revived in the U.S.? Join the conversation below.

That hasn’t changed the company’s plans for New York, said Scott Gatzemeier, Micron’s corporate vice president of front end U.S. expansion. Micron will ramp up chip production in New York as demand for semiconductors rebounds, he said.

Onondaga County has been trying for years to attract a major employer to build on a parcel just north of Syracuse in Clay. Other chip makers considered the site but built elsewhere, prompting the county to expand the site. The county pitched the site to

Taiwan Semiconductor Manufacturing Co.

and

Intel Corp.

, said Onondaga County Executive J. Ryan McMahon. TSMC chose to locate new facilities in Arizona in part because the original parcel was too small, Mr. McMahon said. Intel picked Ohio for a new facility. Both companies declined to comment. 

Local leaders said Micron was initially hesitant about picking the site but was won over after officials including Mr. Mehrotra, Micron’s CEO, visited last year.  

Mr. McMahon organized secret meetings between the company and various community leaders, including top Syracuse University officials, to reassure Micron leaders that the workforce would be able to support the plant. “We had all this higher-ed power in one room, and they talked directly to Sanjay and their team and said, ‘We’re going to develop the talent you need,’” Mr. McMahon recalled.

Write to Annie Linskey at [email protected] and Joseph De Avila at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

CLAY, N.Y.—A shortage of skilled workers in places such as this Syracuse suburb is posing a major challenge for the Biden administration’s ambitious plan to spur chip manufacturing in the U.S.

Micron

MU 0.34%

Technology Inc. plans to invest $100 billion to open a semiconductor-manufacturing campus here, with construction starting in 2024 and production beginning in the latter half of the decade. 

This snowy outpost isn’t an obvious place to reshore an industry from overseas. Its working-age population has declined over the past two decades as other big companies pulled out. The new jobs require highly skilled engineers and technicians already in scarce supply nationwide. At least two other semiconductor manufacturing companies considered expanding here but opted against it after evaluating the area, county leaders said.

To make the plan work, civic leaders are trying to cultivate a new workforce in what they say is a once-in-a-generation opportunity to rejuvenate a postindustrial region. Local colleges and universities are overhauling their education and training programs to vastly increase the number of new engineers they produce and teach technical workers skills such as supply-chain management and orbital welding.

“We have to remake a decade of workforce development in two or three years,” said Duncan Brown, vice president for research at Syracuse University. “It wasn’t just the manufacturing that went offshore but it was also the talent pipeline that went offshore.”

The Micron project is a key part of President Biden’s effort to bring advanced chip manufacturing back to the U.S. and bolster national security by making America less reliant on Taiwan and other far-away countries. Semiconductors, silicon wafers that power most modern equipment, were invented in the U.S., but many companies moved their factories abroad in search of cheaper labor and to tap incentives offered by foreign governments eager to become chipmaking hubs. Chip shortages during the pandemic highlighted the hazards of outsourcing an entire industry. 

To attract chip makers here, Mr. Biden last year signed the Chips and Science Act, which includes $39 billion in manufacturing incentives for companies to build complex fabrication centers and for related suppliers. Micron Chief Executive Officer

Sanjay Mehrotra

met with White House officials frequently while the law was being written, pressed publicly for its passage and announced the company would build in New York several months after the law was enacted.

Boise, Idaho-based Micron has said it would apply for some of the federal incentives, a process that begins at the end of the month. The chip maker also will benefit from $5.5 billion in state subsidies from New York. Micron said it plans to employ 9,000 workers at the Syracuse-area campus when it is fully built by 2045, and predicts another 41,000 jobs for contractors and suppliers.

Syracuse, like other parts of the Rust Belt, experienced population declines starting in the 1970s as manufacturing companies left the region. Major manufacturers that have departed include General Motors Co., Allied Chemical, and Carrier Corp. Onondaga County is roughly the same size as it was in the 1970s, with about 473,000 people. The number of residents between the ages of 25 and 44 has declined 10% in the past two decades, according to census figures.

Regional employment in the Syracuse metro area peaked in 2000, according to the U.S. Bureau of Labor Statistics, and has yet to rebound to prepandemic levels. 

Micron viewed New York’s well-established semiconductor industry as another benefit of the region, the company said, with over 70 such companies operating in the state.

International Business Machines Corp.

is investing $20 billion in the Poughkeepsie area to expand semiconductor manufacturing, artificial-intelligence programs and quantum computing. Yet the pool of talent around Syracuse to fill thousands of highly specialized new jobs isn’t big enough.

“These are some of the most complicated manufacturing facilities ever invented by humankind,” said Sujai Shivakumar, a former director of the Innovation Policy Forum at the National Academies of Sciences, Engineering, and Medicine.

April Arnzen, Micron’s chief people officer, said the company is planning to build a pipeline of workers by investing in local training centers and providing $10 million to K-12 schools to beef up their curricula in science, technology, engineering and mathematics. Micron is also collaborating with local community colleges and universities to make sure their graduates are ready to work for the company, she said.

“Partnership with those institutions is incredibly important because we do have to scale,” Ms. Arnzen said. “Nine thousand jobs is going to be a significant task.”

To help Micron, Syracuse University plans to increase the size of its undergraduate and graduate engineering programs by 50% over the next three to five years.

Photos: There Aren’t Enough Chips—Why Are They So Hard to Make?

Syracuse is recasting an engineering degree to be more welcoming, hoping to increase its ranks in part by attracting more women and minorities who are underrepresented in the field. “One of the biggest problems we have is communicating to this next wave of students that this line of work is for them,” said J. Cole Smith, dean of Syracuse’s College of Engineering and Computer Science. The engineering program has given every student a faculty adviser, a student success adviser and a career adviser to better support them. 

Onondaga Community College will offer a new degree program for semiconductor technicians starting this fall. College leaders are drawing up plans to install a $10 million cleanroom, which replicates the hypersensitive environment of an advanced manufacturing workspace, in a two-story building occupied by the campus bookstore. Over the summer, the college plans a three-day “chip camp,” funded by Micron, for middle-school students to generate awareness about advanced manufacturing.

Even construction workers will require specialized training to operate in the ultraclean environments the fabrication facilities require, according to union leaders. 

Over the next five years, demand for engineers at U.S. semiconductor facilities is expected to grow by about 20%, according to the Semiconductor Industry Association, adding more pressure to an industry where there are already unfilled jobs.

At the same time, plans for expansion in the semiconductor industry are coming when the industry is going through a slump. Demand for semiconductors dropped off after personal-computer and smartphone sales fell. Micron said in December that it would reduce its workforce by 10% and reduce executive salaries, and that it would cut back on capital spending.

SHARE YOUR THOUGHTS

Can chip manufacturing be successfully revived in the U.S.? Join the conversation below.

That hasn’t changed the company’s plans for New York, said Scott Gatzemeier, Micron’s corporate vice president of front end U.S. expansion. Micron will ramp up chip production in New York as demand for semiconductors rebounds, he said.

Onondaga County has been trying for years to attract a major employer to build on a parcel just north of Syracuse in Clay. Other chip makers considered the site but built elsewhere, prompting the county to expand the site. The county pitched the site to

Taiwan Semiconductor Manufacturing Co.

and

Intel Corp.

, said Onondaga County Executive J. Ryan McMahon. TSMC chose to locate new facilities in Arizona in part because the original parcel was too small, Mr. McMahon said. Intel picked Ohio for a new facility. Both companies declined to comment. 

Local leaders said Micron was initially hesitant about picking the site but was won over after officials including Mr. Mehrotra, Micron’s CEO, visited last year.  

Mr. McMahon organized secret meetings between the company and various community leaders, including top Syracuse University officials, to reassure Micron leaders that the workforce would be able to support the plant. “We had all this higher-ed power in one room, and they talked directly to Sanjay and their team and said, ‘We’re going to develop the talent you need,’” Mr. McMahon recalled.

Write to Annie Linskey at [email protected] and Joseph De Avila at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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