Indiana, the US state where SK hynix announced a $3.87 billion investment last week, lost the bid to host Intel’s $20 billion factory in 2022 to neighboring Ohio in a close race.
Was it because Ohio promised more incentives, such as tax credits and direct subsidies, than Indiana? Not necessarily. While the subsidies were similar, according to the U.S. media’s analysis at the time, the biggest difference between the two states was the ‘abundance of labor.’
The availability of skilled semiconductor workers was a key factor, and the number of college graduates in Columbus, Ohio, was attractive. In fact, Intel’s new Ohio factory site is just a 25-minute drive from The Ohio State University. Furthermore, the presence of Carnegie Mellon University within a few hours’ drive also played a role.
Brad Chambers, Indiana’s Secretary of Commerce at the time of the Intel bid, told the NYT, “We learned a lot of lessons. The biggest takeaway was the need to assemble a more attractive package encompassing land, infrastructure, and workforce programs that we could offer to a major semiconductor company.” He learned that although subsidies are significant, a more comprehensive approach is necessary.
Two years after failing to attract Intel, Purdue University, one of the state’s top science and engineering schools, has earned high scores in the ‘talent abundance’ category. In 2022, Purdue created the first semiconductor degree program in the United States. Last year, it announced a $100 million investment to hire more than 50 professors specializing in semiconductors within five years. Additionally, Purdue has established an outreach program to attract bright PhD candidates. SkyWater Technology, a U.S. semiconductor company that has pledged to invest $1.8 billion in Indiana, was so impressed with Purdue’s efforts that it chose Indiana over four other states.
Purdue University has also emerged as a key partner for the SK hynix investment. SK hynix’s new high-bandwidth memory (HBM) packaging production facility will be located in an on-campus research park. Purdue University has also pledged approximately $60 million in support to SK hynix, including a discount on the site.
In addition to the university’s support, the state government’s 1 trillion won in direct and indirect subsidies, the city government’s support, and local energy companies have joined the race to attract SK hynix. “We created a semiconductor ecosystem and put it on the table,” Indiana Secretary of Commerce David Rosenberg reiterated in a phone interview with The Dong-a Ilbo.
Other states that failed in their bids for SK hynix will probably learn from the experience and come up with another ‘semiconductor-friendly’ strategy. It’s quite intimidating to see how quickly things can change through competition. In just two years, since the pandemic gave rise to the concept of supply chain security and sparked a semiconductor subsidy war between countries, Indiana has gone from zero to eight semiconductor factories. I want to ask what did Korea do in those two golden years.
