On Friday, February 10, New York senator and majority leader Chuck Schumer visited the East Fishkill semiconductor fabrication plant (called ‘fab’). He didn’t announce new semiconductor jobs as he has in many other locations in Upstate New York. But the new design and chipmaking foundry owner, ON Semiconductor Corporation – which prefers to be called onsenmi — had promised four years ago to retain the about 1000 jobs the facility employed. (The final number of retained jobs is understood to be 1056).
Even more importantly, the new ownership will produce a kind of advanced chip that it has expressed confidence will expand its business, creating the need for increased investments and many new jobs.
“With my Chips and Science Act as the lighting rod,” said Schumer on a recent occasion, “we are now seeing energy flow into Upstate’s manufacturing sector like never before, and this investment will further cement that the future of microchips will be built with American-made products crafted by New York workers.”
With the power his leadership position and contacts have brought him, Schumer has worked tirelessly for the past several years to assemble a panoply of inducements to attract the businesses he is sure will make Upstate New York one of the world’s significant microchip producers, paying high wages to an estimated 100,000 additional manufacturing workers.
Schumer described the program in 2019 as “a moon shot.”
“This should not be a partisan issue, this is about the future of America, this should not be a political issue,” he argued at that time. “This should be of the same importance as putting a man on the moon.”
A lot of places around the world – including not only in mainland China but also in other states in the US — harbor the same ambitions as Upstate New York. In this highly competitive environment, what are the odds that Schumer’s home state can emerge from its status as an also-ran and become a winner?
Schumer, as ever, is optimistic. A headline in his February 10 press release boasted: “Now onsemi will breathe new life into the Hudson Valley’s legacy of innovation as the home of the only twelve-inch power-discrete and image-sensor fab In America.”
As of May 2022 acquisition-minded onsemi had $6.74 billion in sales and 31,650 employees. The semiconductor supplier, headquartered in Phoenix, is ranked 483rd in the 2022 Fortune 500 listings. It runs a network of manufacturing facilities, sales offices and design centers in North America, Europe, and the Asia Pacific region. Among its products are custom devices for automotive, communications, computing, consumer, industrial, LED lighting, medical, military/aerospace and power applications.
Four years ago, onsemi struck a deal with GlobalFoundries, which with about seven percent of the market is the world’s fourth largest semiconductor firm. GlobalFoundries, which owned the East Fishkill ex-IBM plant and has 14,600 employees, was planning on building a 633,000-square-foot advanced fab in Malta, near Saratoga, on the same campus as a smaller fab it owned. It also had two other fabs to which it could transfer East Fishkill production.
“ON Semiconductor’s decision to expand and grow its operations in New York State is proof positive that smart investments in our innovation economy are working and fueling New York’s unprecedented growth,” governor Andrew Cuomo said in 2019. “We’re glad ON Semiconductor is choosing to deepen its roots here and its commitment to New York State.”
Under the terms of their 2019 agreement, onsemi was to pay GlobalFoundries $100 million up front and $330 million this past December. For its part, GlobalFoundries agreed to manufacture 300mm wafers for ON Semiconductor until the end of 2022. The pact also included technology transfer and license agreements. For its part, GlobalFoundries agreed in 2019 to manufacture 300mm wafers for ON Semiconductor until the end of 2022. The contract also included technology transfer and license agreements.
This is the first of a series of articles on the Hudson Valley’s economic future.
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