NY tech hub partners ready to capitalize on $40 million in federal funds

The three-region bid, under the NY SMART I-Corridor banner, was among 12 regions awarded funding through the “tech hub” competition run by the U.S. Economic Development Administration.

“This just really is gasoline in our tank to move faster together,” said Dottie Gallagher, president and CEO of the Buffalo Niagara Partnership. “We think it’s the beginning of a lot of great opportunities and a way to work together to really build our communities.”

Senate Majority Leader Chuck Schumer hailed the funding award at a news conference Tuesday at the Northland Workforce Training Center.

“There is no greater national spotlight than being a tech hub,” Schumer said.

Schumer said he had recently met with representatives of tech companies from Japan and Taiwan. “They want to know about New York, because they know we are in the lead, we have already attracted some great companies.”

Here is where the tech hub partners’ work will go beyond the funding award:

• The upstate New York partners view the $40 million as akin to “seed capital” to implement their strategy for developing the semiconductor industry. New York State is supplying $8 million to bolster the plan. And the upstate New York partners are determined to secure other sources of funding.

Robert Simpson, president of CenterState CEO, a Syracuse-based economic development organization, said being one of the tech hubs awarded funding “sends a pretty strong signal to the market that these are the 12 hubs around the country that are most prepared to execute today.

“That validation goes a long way, whether we’re going back to another federal agency or going to the state or a philanthropic partner or going to a corporate partner,” Simpson said.

The NY SMART bid sought about $54 million from the tech hub program, but two of the proposals in its application were not funded.

“We were perfectly prepared that not every project would get funded and we tried to design it in a way that the strategy would stand up,” Gallagher said. “I think we all have said, whatever doesn’t get funded, we’ve got to figure out a strategy to make it happen another way. We’re not going to complain about $40 million, let’s put it that way.”

Two of the 12 tech hubs received smaller allocations than NY SMART bid’s. Four of the tech hubs were awarded $51 million each, the highest amount any received.

When the 31 tech hubs were announced – out of 400 applicants – it was expected somewhere between five and 10 of them would receive funding.

The original federal legislation creating tech hubs – championed by Schumer – authorized $10 billion for the program, but only $500 million of that has been funded so far. Joseph Stefko, president and CEO of ROC2025, an alliance of economic development groups based in Rochester, said the authorization for the higher amount is a positive signal for future federal funding.

“That leaves me optimistic that as we prove the benefits of this program and when the rubber really meets the road with implementation, there will be an appetite to continue investing,” Stefko said.

• Just as it was during the application process, collaboration will be key among the three upstate New York regions in order for the semiconductor program to advance.

“I think we built up that trust among these communities and are in a really, really good position to execute,” said Benjamin Sio, CenterState CEO’s senior vice president of strategy, policy and planning. “The tough thing is to execute. We’ve gone through the difficult part of the competition, but now we have to make good on what we said what we would do.

“Yes, it’s great we’re one of the 12, but now we’re one of the 12 with the spotlight on us,” Sio said.

Each region will be responsible for leading one component of the work across all three regions.

The University at Buffalo will take the lead on efforts to build up the supply chain for the semiconductor industry. Monroe Community College will take the lead on workforce development efforts for semiconductor industry employment. And Syracuse University will lead efforts to commercialize semiconductor technologies.

“Each of these institutions recognizes that their role is to lead this, not on behalf of what happens within their four walls or just within their one community, but they are leading this with the hub on behalf of the entire corridor,” Stefko said. “Each of these are corridor-wide investments.”

• Massive new semiconductor investments are expected to generate opportunities for suppliers.

Outside Syracuse, Micron Technology has unveiled plans for a chip-making complex near Syracuse that could reach $100 billion in investment. To the west, Intel is investing $20 billion in two chip-making operations near Columbus, Ohio. The NY SMART corridor stretches between those massive investments.

Inside the corridor, Edwards Vacuum is building a $319 million plant in Genesee County to produce dry pumps for the semiconductor industry.

Amid all the big-ticket new projects, the tech hub program calls for helping existing manufacturers to adapt their operations to enter the semiconductor supply chain, Gallagher said. That’s the mission of the Supply Chain Activation Network, or SCAN, that UB will lead for the three regions.

“Some of them may not even realize there’s an opportunity there,” Gallagher said. “For this region, I think our legacy manufacturers will have a huge opportunity to be able to pivot and grow into it.”