Onshoring push continues with $1.8B semiconductor plant

Dive Brief:

  • Bloomington, Minnesota-based SkyWater Technology plans to build a $1.8 billion semiconductor research and development and production facility in West Lafayette, Indiana, according to a company press release.
  • The 600,000-square-foot plant sits in the Discover Park District, the 400-acre mixed-use development adjacent to the Purdue University campus.
  • SkyWater President and CEO Thomas Sonderman said the project will rely on money from the CHIPS Act, which still hasn’t been funded by Congress.

Dive Insight:

Semiconductor projects remain in high demand in the U.S. as more and more American companies push to onshore their manufacturing facilities. 

That’s because COVID-19 impacts on the supply chain and the war in Ukraine have spurred calls for more domestic production in order to reduce reliance on foreign manufacturers. Manufacturing construction starts reached a record $41.6 billion over the last 12 months ending May 2022. That’s 161% more than the 12 months ending May 2021, according to Dodge data.

But starts in the manufacturing sector in June dropped 14%, as project owners became spooked by the potential of recession in an era of rising interest rates and continued volatility in materials prices. 

Sonderman said the ability to make this large of an investment will be the result of SkyWater, Purdue University and the state of Indiana working together to successfully obtain federal incentives in the form of grants from the CHIPS Act, according to the release.

“Federal investment will enable SkyWater to more quickly expand our efforts to address the need for strategic reshoring of semiconductor manufacturing,” said Sonderman in the press release. “We have a unique opportunity to increase domestic production, shore up our supply chains and lay the groundwork for manufacturing technologies that will support growing demand for microelectronics.”

While the $52 billion CHIPS Act passed in January 2021, Congress has yet to fund its provisions. The Senate did move ahead on Tuesday with a slimmed-down version of the legislation, according to Reuters. Intel postponed groundbreaking of its $20 billion Licking County, Ohio facility due to the delay, while GlobalFoundries also confirmed to Construction Dive plans for its own plant in Malta, New York have been overshadowed by the legislative hold up as well.

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