The outcome of Tuesday’s election raises questions about the long-term outlook for the “tech hub” promoting development of the semiconductor sector in upstate New York.
The Washington political landscape in which the program was created will change in January:
- President-elect Trump has criticized the CHIPS and Science Act, which was signed by President Biden. The act led to the creation of tech hubs, to foster innovation in regions around the country.
- House Speaker Mike Johnson, in a campaign appearance in Central New York just before Election Day, said Republicans would probably try to repeal the legislation, before he walked back those remarks.
- Sen. Chuck Schumer championed the CHIPS and Science Act and advocated for a tech hub designation for the Buffalo-Rochester-Syracuse corridor. But Schumer, a Democrat, will no longer be Senate majority leader, and will lose the clout that comes with that role.
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Proponents of the act, including Schumer and Gov. Kathy Hochul, are calling for Trump to stick with it, instead of scuttling it.
Sen. Majority Leader Chuck Schumer at a tech hub announcement in July. The largest Albany-to-Buffalo development effort since the Erie Canal was supposed to be a transformative workforce and technology catalyst for upstate New York. With President Donald Trump’s reelection, its future is uncertain.
“Anyone threatening to repeal the CHIPS and Science Act is threatening more than 50,000 good-paying jobs in Upstate New York and $231 billion worth of economic growth nationwide,” Hochul said. “Repealing this law would cede economic power to foreign nations like China and allow our national security to be put at risk.”
A total of 12 tech hubs, focused on a host of industries, were awarded $504 million in federal funding last summer. The program promotes innovation in areas outside of hotbeds such as Silicon Valley.
Buffalo, Rochester and Syracuse collaborated under the NY SMART I-Corridor banner to win $40 million in federal funding. The competition was overseen by the Commerce Department’s Economic Development Administration.
The upstate regions’ goal is to fuel the growth of the semiconductor industry along the I-90 corridor, with Micron Technology planning to build a chip-making complex worth up to $100 billion outside of Syracuse. New York state is providing $8 million to supplement the $40 million in federal funding.
The CHIPS and Science Act aims to spur domestic manufacturing of semiconductors, rather than depending heavily on overseas suppliers. Supporters of the legislation say such production is a matter of national security, and a way to avoid the supply chain disruptions that arose during the pandemic.
But the stance among some federal lawmakers and the White House toward the act may soon change.
In an interview before the election, Trump called the CHIPS and Science Act “so bad.” He expressed support for instead using tariffs to spur foreign chipmakers to establish manufacturing operations in the United States.
Is the $40 million that was already awarded for five years to the NY SMART tech hub at risk?
That funding is secure, said Joseph Stefko, president and CEO of ROC2025 in Rochester, which is a partner in the tech hub program.
“Our work to activate the component projects is moving forward,” Stefko said. Those projects include helping existing companies become suppliers to the semiconductor industry, training workers for jobs and promoting innovation.
What is less certain is the long-term outlook for the program. Advocates are making their case for continuing it.
“We are confident that the administration recognizes the strategic importance of American-made semiconductor chips, and we know our congressional delegation will continue to work together to fully realize this opportunity for our region and our country,” said Dottie Gallagher, president and CEO of the Buffalo Niagara Partnership, also a partner in the tech hub program.
A press representative for the Economic Development Administration did not return a message to comment.
The CHIPS and Science Act, signed in 2022, authorized $10 billion for tech hubs. But only about $500 million in funding has been allocated for the program so far. Decisions about additional funding are up to future sessions of Congress.
“I’m confident that bipartisan support will continue, and we’ll continue working with the administration and our congressional delegation to secure further appropriations that build on these investments,” Stefko said.
Schumer defended the CHIPS and Science Act during a recent appearance in Albany, calling it “the most significant and impactful investment ever by the federal government to rebuild and onshore American microchip manufacturing, which is critical to our national security and ability to outcompete China and the rest of the world.”
“I will work non-stop to make sure this vital national security and economy-boosting program keeps delivering for the American people,” he said.
Rep. Nick Langworthy, a Republican, was asked about the House speaker’s comment regarding the CHIPS and Science Act.
“The speaker clarified his comments and support for bringing chips manufacturing to upstate New York,” Langworthy said. “While there are some misguided Green New Deal components to the CHIPS Act that warrant reform, House Republicans are committed to revitalizing American manufacturing, including the growing semiconductor industry right here in upstate New York.
“I will continue working in a bipartisan fashion to designate Western New York as a tech hub and support initiatives that will create good-paying jobs, strengthen our supply chains and keep America at the forefront of manufacturing innovation,” Langworthy said.
Along with tech hubs, the CHIPS and Science Act offers incentives for semiconductor industry manufacturers to build factories in the United States. One of those projects is Edwards Vacuum’s $319 million dry vacuum pumps manufacturing plant, which is under construction in Genesee County.
The Commerce Department has reached a preliminary agreement with Edwards to provide up to $18 million in federal funding to support the project. The federal agency also has preliminary agreements with GlobalFoundries and Micron for their New York State projects. But none of those three agreements has yet been finalized.
A Commerce Department press representative did not return a message that asked when those agreements would be completed.
Micron’s CEO, Sanjay Mehrotra, put in a good word for his company in a social media post.
“Micron’s historic planned investments in domestic leading-edge memory will create tens of thousands of American jobs and transform the economies and quality of life in communities across the U.S.,” he wrote on X. “We look forward to working with the incoming administration, the U.S. Senate, and U.S. House of Representatives to revive U.S. semiconductor manufacturing and strengthen U.S. economic security.”
