Kansas plans to give US$304 million in taxpayer-funded incentives to a semiconductor company in its largest city to build a huge new factory, but the project would not go forward without funds the US government has promised to rebuild the nation’s chipmaking capacity.
Kansas Governor Laura Kelly on Thursday announced that the state has an agreement with Integra Technologies, based in Wichita, for a 10-year package of tax breaks and reimbursement of expenses. State officials said the new US$1.8 billion plant would cover 92,903m2, have 2,000 employees, and create 3,000 additional jobs among suppliers and other local businesses.
The announcement comes with the US trying to reverse a loss of capacity for making the chips that are vital to smartphones, laptops and other modern-day conveniences, as well as automobiles and life-saving medical devices.
Photo: AP
The US Congress last year approved a measure that provides more than US$52 billion in grants and other incentives for the semiconductor industry.
Kelly told reporters during a news conference that the state’s incentives are crucial to attracting the federal funds and “making Kansas an essential part of our country’s national security efforts.”
“This advanced manufacturing facility is part of a national push to restore our semiconductor industry so that US workers and businesses can compete and win in the race for the 21st century,” Kelly said.
Integra CEO Brett Robinson would not say how much federal funding the firm needs, only that there is “no commercially viable way” to do the project without it.
He and state officials said other states were trying to attract the project, though they did not disclose the competitors.
“It’s not just critical to the United States and to security, but it’s critical to the supply chain,” Kansas Senate President Ty Masterson said.
US President Joe Biden pushed Congress last year to boost the local semiconductor industry, because of a shortage of chips made worse by the global COVID-19 pandemic and concerns about competing with international rivals, particularly China. There has been a decades-long shift to cheaper-to-operate Asian chip plants, and the industry is now dependent on Taiwan.
“If we were ever to lose, for a sustainable amount of time, access to the southeast Asian supply chain, what we just went through would pale in comparison,” Robinson said.
Integra, founded in 1983, has about 500 employees in Wichita and Silicon Valley, and describes itself as the largest US provider of the last two major assembly and testing steps in the chip manufacturing process.
For the company to receive its incentives, it must invest at least US$1.5 billion in the new factory in the next five years and consistently provide the equivalent of 1,600 full-time jobs for 10 consecutive years.
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