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Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 306 | July 21-27 , 2023

The $100 billion bet that a postindustrial US city can reinvent itself as a high-tech hub 

By David Rotman | MIT Technology Review | July 6, 2023

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In late April, a small drilling rig sits at the edge of the fields taking soil samples in Syracuse is the first sign of construction on what could become the largest semiconductor manufacturing facility in the United States.

The CHIPS and Science Act was widely viewed by industry leaders and politicians as a way to secure supply chains, bolster R&D spending, and make the United States competitive again in semiconductor chip manufacturing. But it also intends, at least according to the Biden administration, to create good jobs and, ultimately, widen economic prosperity.

Now Syracuse is about to become an economic test of whether, over the next several decades, the aggressive government policies—and the massive corporate investments they spur—can both boost the country’s manufacturing prowess and revitalize regions like upstate New York. It all begins with an astonishingly expensive and complex kind of factory called a chip fab. 

For any city, a $100 billion corporate investment is a big deal, but for Syracuse, it promises a reversal of fortune. Sitting at the northeast corner of the Rust Belt, Syracuse has been losing jobs and people for decades as its core manufacturing facilities shut down—first GE and more recently Carrier, which once employed some 7,000 workers at its East Syracuse plant.

Syracuse, of course, is not alone in its postindustrial malaise. The nation’s economy is increasingly driven by high-tech industries, and those jobs and the resulting wealth are largely concentrated in a few cities; Boston, San Francisco, San Jose, Seattle, and San Diego accounted for more than 90% of US innovation-sector growth from 2005 to 2017, according to a report by the Brookings Institution. Without these high-tech jobs and with conventional manufacturing long gone as an economic driver, Rust Belt cities like Detroit, Cleveland, Syracuse, and nearby Rochester now top the list of the country’s poorest cities.

The Micron investment will flood billions into the local economy, making it possible to finally upgrade the infrastructure, housing, and schools. It will also, if all goes according to plan, anchor a new semiconductor manufacturing hub in central New York at a time when the demand for chips, especially the type of memory chips that Micron plans to make in Clay, is expected to explode given the essential role they play in artificial intelligence and other data-driven applications.

It is, in short, an attempt to turn around a region that has struggled economically for decades. And the project’s success or failure will be an important indicator of whether the US can leverage investments in high-tech to reverse years of soaring geographic inequality and all the social and political unrest that it has brewed.

3 key takeaways from the article

1. In late April, a small drilling rig sits at the edge of the fields taking soil samples in Syracuse is the first sign of construction on what could become the largest semiconductor manufacturing facility in the United States.
2. The CHIPS and Science Act, passed last year was widely viewed by industry leaders and politicians as a way to secure supply chains, bolster R&D spending, and make the United States competitive again in semiconductor chip manufacturing. But it also intends, at least according to the Biden administration, to create good jobs and, ultimately, widen economic prosperity.
3. The project’s success or failure will be an important indicator of whether the US can leverage investments in high-tech to reverse years of soaring geographic inequality and all the social and political unrest that it has brewed.

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Topics:  USA, Manufacturing, Semi-conductor, Poverty