Kansas tech projects involve billions in funding, hinging on federal CHIPS Act funds

At least two businesses have promised billions in investments in Kansas. Both rely on funding from the U.S. CHIPS Act. Shawn Loging explains what it means.
Published: Feb. 21, 2023 at 6:11 PM CST
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WICHITA, Kan. (KWCH) - This month brought two major economic development project announcements to Kansas, involving billions of dollars and thousands of jobs.

Integra Technologies is looking at a semiconductor plant in Wichita, investing about $1.8 billion. Monday brought the announcement that EMP Shield plans to build a $1.9 billion computer chip manufacturing facility in Burlington. CHIPS Act funding is essential for both projects, company and government officials say.

Last August, President Joe Biden signed the CHIPS and Science Act into law. The legislation is meant to spur the manufacturing of semiconductor chips, as the U.S. makes up 10% of global production.

“[CHIPS Act] puts in a very good position to reverse this rather troubling fall in our manufacturing capacity around the world. The big difference is governments around the world for decades have been incentives chips manufacturing on their shores. Our federal government has not been doing that, and as a result, we have fallen behind,” said Semiconductors Industry Association President and CEO John Neuffer.

Neuffer said once the CHIPS act passed, “we’ve seen quite an outflow of commitments by our industry.”

Neuffer said nationwide, through CHIPS act funding, there are 40 projects announced, equating to more than a $200 billion investment. These projects include what’s planned for Integra in Wichita and EMP Shield in Burlington.

While the application process hasn’t been announced, when introducing his company’s $1.8 billion plan on Feb. 2, Integra CEO and President Brett Robinson explained part of what’s needed.

“A state and local incentives package is required to apply for CHIPS Act funding,” Robinson said.

The CHIPS Act will provide about $200 billion over the next decade.

“In our industry, fabs cost a lot of money. A high-end fab, ten to 20 billion dollars

This includes $52 billion in subsidies for manufacturers and workforce development.

“Getting work force correct is going to be a critical variable in the calculus of success here. The good news is that embedded in many, many parts of the CHIPS Act are workforce development requirements. They’re built into the grants. All grantees are going to have to workforce programs,” Neuffer. “There’s also $200 million set aside for the National Science Foundation to help build state and local workforce programs. This is a critical piece. You can put the fabs, but if you don’t have the workforce to run the fabs, you’re not going to have an effective outcome.”

About $24 billion is in tax credits for new facilities. There are also tens of billions of dollars for research and development.

“My guess is companies are going to be competing quite fiercely for the money. It’s not just going to the leading-edge chips, the leading-edge chips or memory chips. There’s going to be what we call more mature node chips, a lot of the chips that go into cars, refrigerators or toasters,” Neuffer explained of planned projects.

He said the shortage of chips during the pandemic showed their importance. While that’s largely been resolved, he said the CHIPS Act is looking to the future.

“Put together with the mid-term and long-term perspective in mind. It just takes two to three years to get these FABs (fabrication plants for semiconductors) up and running,” Neuffer said.

The Kansas projects are also partnering with local schools and colleges to train workers. Federal funds through the CHIPS Act would launch those courses.

Integra Technologies also has been approved for $300 million from state APEX incentives. If Integra does not secure federal CHIPS Act funding by Oct. 1, the state can withdraw the offer.