Semiconductor focus could boost manufacturing, tech job growth

Buffalo, Rochester and Syracuse joined forces to win $40 million in a competition run by the U.S. Economic Development Administration. Under the NY SMART I-Corridor banner, the three upstate New York regions are concentrating on bolstering the semiconductor industry.

NY SMART’s plans could pay local dividends through the semiconductor industry in three significant ways:

• More manufacturers joining the supply chain, enabling them to increase their revenues and employment.
• More workers getting trained for jobs, with skills that employers in those industries seek.
• Commercialization of new technologies, through institutions such as the University at Buffalo.

The upstate New York partners in the tech hub bid see the $40 million as a starting point, intending to secure funds from other sources to implement their strategy. They believe being among the 12 tech hubs to receive funding – out of the 31 contending for money, from the original pool of 400 applicants – attracts more attention to upstate New York’s semiconductor sector.

Upstate New York’s entry was the only one of the 12 tech hubs to receive funding that was focused on semiconductors, said Dottie Gallagher, president and CEO of the Buffalo Niagara Partnership.

“The federal government has said, the center of the semiconductor universe is right here,” she said. “That’s what we’re a part of.”

Now, it is up to the upstate New York partners to capitalize on the funding.

NY SMART plays up the geographical value of the I-90 corridor. Just to the west, Intel is investing $20 billion in two chip-making facilities near Columbus, Ohio. Outside Syracuse, Micron Technology plans to invest up to $100 billion in a chip-making complex. Within the NY SMART corridor, Edwards Vacuum is developing a $318 million facility in Genesee County to serve the semiconductor industry.

The NY SMART partners would welcome more new companies like those. But part of their mission is to support manufacturers in the three regions that are either already serving the semiconductor industry – there are about 100 of those – or that could adapt their operations to do so.

The University at Buffalo will lead those efforts, through the Supply Chain Activation Network, known as SCAN. That network will support manufacturers and identify gaps in the supply chain that need filling, said Satish Tripathi, UB’s president.

At its Buffalo plant, PVS Solutions makes ultra-pure sulfuric acid used in chip production. Dean Larson, president of the company, said PVS expects to supply Intel, Micron and others from its Buffalo plant.

“Whatever can be done to build a supply chain in the local areas will undoubtedly create momentum around building additional plants in the region,” Larson said. “We would look to expand our facility as opportunities present themselves. The intention to build clusters around the new semiconductor plants makes sense from a logistics and efficiency standpoint.”

Materion Corp.’s plant in Buffalo, which employs about 250 people, has supplied the semiconductor industry with its metal products for decades, said Michael Mallia, director of global sales, power semiconductor and analog.

“I think it’s fantastic this industry is being recognized as so critical to the world economy, and also understanding and recognizing the importance of needing highly skilled labor and needing free-flowing supply chains to support these companies that are building these facilities in upstate New York and the New York region,” he said.

And there are opportunities for more companies to join the semiconductor supply chain, given all the components required, Mallia said.

“Every component is important,” he said. “If one part of the supply chain is disrupted – that can even be bags for our products – everything stops.”

Companies such as SoPark, an electronics contract manufacturer in Lackawanna, are exploring opportunities available to them.

“When you talk about the semiconductor industry, it’s always on the West Coast,” said Rupa Shanmugam, SoPark’s president and CEO. “So to actually have it here in this region is so exciting.”

Training workers to meet the needs of semiconductor manufacturers and their suppliers is a key part of NY SMART’s strategy.

“They can build all these factories, but it really comes down to having the workforce, and having the engineers, having the equipment techs that are able to manufacture these chips,” Mallia said.

“When these chip companies come in, they want to make sure there are workers available,” said Sen. Chuck Schumer, who championed the legislation that created tech hubs. “We have great skills and great hardworking people, but being a chip worker might be a little different from something else, so we need to train people for that.”

Schumer pointed to the Northland Workforce Training Center as one way to train new workers. The state wants to replicate the Northland model with new workforce training centers in other regions, through a $200 million program called ON-RAMP.

Joseph Stefko, president and CEO of ROC2025, a Rochester-based alliance of economic development groups, said the ON-RAMP investment will allow SMART NY to stretch the tech hub funding and “be tactical about layering in a program that will more rapidly produce the skills that semiconductor manufacturers and those supply chain partners really need – technicians and skill sets like that.”

And it is not just about creating manufacturing jobs. The region’s tech sector is expected to get a boost from a more-robust semiconductor industry.

Michael Wisler, chief information officer for M&T Bank, said the push for tech job growth complements efforts already under way locally, from M&T’s own investment in tech centers at Seneca One tower and Lafayette Court, to the Western New York Manufacturing and Tech Workforce Coalition, to 43North and Tech Buffalo.

“I think more juice to those assets that are starting to mature and starting to show some promise is likely what we’ll see,” he said.

Wisler said the push for job growth connected to the semiconductor industry “will only help with telling the story to places outside of Buffalo that this is a relevant place for modern, contemporary skills application, for those that are already experienced.”

“Probably more tangibly for us locally, I think it will just give us more resources to be able to increase the effectiveness of those assets to create more opportunity for underskilled talent here,” Wisler said.

As semiconductor manufacturing operations and their suppliers take root and expand, tech job development is positioned to follow, he said.

“It may not be obvious to many that software demand is going to up, if you’re thinking predominantly about manufacturing chips,” Wisler said. “But what we’ve seen in many of these other places is innovation is drawn into those clusters. I think we’re poised relatively well for the ripple effect of that.”

Wisler said in addition to securing tech hub designation and funding, the collaboration by Buffalo, Rochester and Syracuse to achieve those goals was important.

“The biggest benefit we can get from this thing is, in fact, proving to ourselves that as a region, when we collaborate, better things will happen,” he said.

Syracuse University will lead the NY SMART partners’ work to coordinate commercializing assets and facilities to promote semiconductor-related innovation and entrepreneurship. Locally, that will include resources available through UB.

“At UB, we look forward to building the economy of the future and, at the same time, enhancing our nation’s security,” Tripathi said.

Benjamin Sio, senior vice president of strategy, policy and planning for CenterState CEO, a Syracuse-based economic development organization, said the commercialization work will create “a unified front door for industry interested in interacting with our educational institutions in the semiconductor research space.”

The commercialization efforts will include helping small, mid-sized and minority-owned businesses access those resources and bring their ideas to the marketplace. A new voucher program will help cover those companies’ costs of using laboratory and prototyping resources.