< PreviousINVESTMENT PROFILE: CONSUMERS ENERGY Michigan Is Putting Chips On the Table I n the state that put the world on wheels, there is emerging a strategic symbiosis across industry, academia and government to fortify Michigan as No. in the seismic transition of the automotive industry. Its components are semiconductors and electric vehicles (EVs). e point at which they meet is conveyed by the apt description of EVs as “chips on wheels.” Each makes demands of the other, as the average EV is powered by up to , microchips. And consumers are demanding more of both. It’s a complex calculus, one Michigan is on the way to cracking, both by having attracted billions of dollars’ worth of investments from semiconductor manufacturers and automakers alike, and by nurturing physical and talent infrastructures to propel the tandem industries into the future. e semiconductor/EV convergence forms the basis for Michigan’s STAR initiative, which is establishing in Michigan a global center for Semiconductor Talent and Automotive Research (STAR). e public-private partnership, announced in , is co-led by semiconductor company KLA and the Belgium-based technology innovation hub imec, with partners that include the University of Michigan, Washtenaw Community College and General Motors. STAR will focus on developing the talent base and infrastructure necessary to accelerate advanced semiconductor applications for electrifi cation and autonomous mobility. KLA, a Fortune global technology company, is among the many semiconductor and advanced electronics ventures that have chosen to go big in Michigan. Based in California’s Silicon Valley, KLA recently established a $ million second headquarters in Ann Arbor, now home to its AI Center of Excellence, which employs machine learning to advance semiconductor manufacturing. Its ,-sq.-ft. clean room is one of Michigan’s largest. “KLA is focused on investment in research and development to help address key challenges for automotive semiconductors,” said KLA President and CEO Rick Wallace. “ e STAR Michigan initiative accelerates our support for talent development, collaboration and innovation in the region.” Priming the Talent Pipeline STAR builds upon an established and interconnected web of talent development programs Michigan has pioneered to meet the growing demands of the semiconductor and automotive industries. At the center of the web is the Talent Action Team, launched in by Gov. 116 MAY 2024 SITE SELECTION by GARY DAUGHTERS gary.daughters@siteselection.com Photo courtesy of MEDCGretchen Whitmer and the Michigan Economic Development Corporation (MEDC) and touted as the fi rst public- private state talent coalition to specifi cally address the talent gap in the EV and semiconductor industries. e Talent Action Team works across the public sector, industry partners and training institutions to identify semiconductor-specifi c curricula ranging from K- through Michigan’s four-year universities. In March , the team’s eff orts earned MEDC recognition as one of Fast Company’s Most Innovative Companies in the Business Services category. “We here in Michigan understand the landscape and the current labor market and the challenges it presents to employers,” says Kerry Ebersole Singh, MEDC’s chief talent solutions offi cer, who spearheads the Talent Action Team’s eff orts. “We rolled up our sleeves and pulled together some of our strategic employers in the mobility and semiconductor industries and said, ‘What’s the best way we can help you to continue hitting your production timelines and, at the same time, to participate in a robust innovation sector?’ ” A key component of that is e Michigander Scholars program, which is off ering scholarships of up to $, to tech students at the University of Michigan, Michigan State University, Wayne State University, Kettering University and Michigan Technological University. Recipients must commit to signing a letter of employment with a participating industry partner, the list of which includes such powerhouses as Bosch, Ford, DENSO, Mahle, LG Energy Solution, KLA, Hemlock Semiconductor, SK Siltron and Shape Corporation. Scholars must also commit to staying on the job for months. “Something we tell our employers,” says Ebersole Singh, “is that any guarantee they can off er, whether it’s a guaranteed internship, guaranteed interview or ultimately a guaranteed job, is going to be a powerful recruiting technique to get folks into these training modules and to ensure they’re getting their workforce needs met. “We want to be supportive,” she says, “in understanding how to build out and broaden the pipeline with the skills that are going to feed the careers of the st century. is is what makes Michigan diff erent. is is about a deep investment over time to ensure employers get what they need.” A Utility Steps Up Consumers Energy, Michigan’s largest energy provider, is another major player that has committed itself to the statewide eff ort to drive the EV/semiconductor convergence. “Both are sources of load growth,” explains Sarah Nielsen, executive director of the utility’s Transportation-Renewables and Storage team. “Whether you’re building semiconductor facilities or you’re manufacturing EVs, you’re using huge amounts of energy. at’s fundamental to what the utility cares about and plays directly into our economic development strategy.” With a legacy of serving some of the largest industrial customers in the nation, Consumers Energy is ready to serve EV/ semiconductor companies and help cement Michigan as the nation’s leading EV industry destination. rough accelerating investments in wind and solar power — with the goal of reaching carbon neutrality by — the utility is helping Michigan’s large manufacturers meet their sustainability goals. And crucially, Consumers Energy has staked out a claim as a leading promoter of EV adoption, having launched one of the nation’s fi rst incentive programs for home charging stations. Its $ rebate to residential customers for the installation of overnight chargers, says Nielsen, can knock down the installation cost by around one-third. It off ers even larger incentives for Level chargers in public places and fast chargers along highways and other major travel routes. Easing “range anxiety” among drivers and helping them navigate their way through EV ownership “are just what the market needs right now,” Nielsen says. For consumers, “it’s a decent amount of change and there’s technology involved. But what we’ve found is that once people get in these cars and start driving, there’s no going back.” This Investment Profile was prepared under the auspices of Consumers Energy. For more information, contact Valerie Christofferson at 616-648-2777 or at valerie. christofferson@cmsenergy.com. On the web, go to www.ConsumersEnergy.com/econdev. SITE SELECTION MAY 2024 117 Sarah Nielsen MAJOR CHIP INVESTMENTS SK Siltron $300 million/150 jobs (Bay City) Hemlock $375 million/170 jobs (Thomas Township) KLA $200 million/600 jobs (Ann Arbor) CalumetElectronics$50million/270jobs (Calumet) indieSemiconductor$12.5million/180jobs (Auburn Hills)118 MAY 2024 SITE SELECTION T wo recent preliminary memoranda of terms (PMT) signed by the U.S. Department of Commerce and two leading microchip manufacturers are good news, if fi nalized, for Arizona’s high-tech sector and the state’s future as a U.S. semiconductor powerhouse. More than $ billion in CHIPS and Science Act funds could soon make their way to Intel ($ . billion) and TSMC Arizona ($. billion) facilities. In Intel’s case, plants in Oregon, Ohio and New Mexico also would benefi t. On March , Intel and Commerce signed their PMT, which in addition to the $ . billion in direct funding for Intel semiconductor projects would see a Treasury Department Investment by MARK AREND mark.arend@siteselection.com Aviation and space industry investment is skyrocketing. A crawler crane, the world’s largest of its kind, lifts trusses into place in September 2023 for Intel’s Fab 52 and Fab 62 in Chandler, Arizona, where an estimated 50 cranes are needed at the $20 billion project site. Photo courtesy of Intel Corporation STATE SPOTLIGHT Arizona Preliminary CHIPS Deals Would Boost Intel, TSMC Plans for Arizona (Continued on page )122 MAY 2024 SITE SELECTION Tax Credit of up to % on more than $ billion in qualifi ed investments for federal loans up to $ billion, according to a company press release. Intel expects to create more than , direct jobs and more than , indirect jobs through its investments. Intel previously announced plans to invest more than $ billion over fi ve years in the four states in which it operates chip plants. In Arizona, it’s earmarked $ billion for two new chip plants, Fabs and , and modernization of Fab at its Ocotillo campus in Chandler. AI-driven computing is among the applications planned for chips produced because of this investment. “Today is a defi ning moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation,” said Intel CEO Pat Gelsinger at the PMT announcement at the Ocotillo campus. “AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.” In April, Commerce signed a PMT with TSMC Arizona, owned by Taiwan Semiconductor Manufacturing Company Ltd., to support its $ billion investment in three Phoenix-area fabs. e fi rst two were announced in May and April , representing a combined investment of $ billion. A recently announced third fab in Phoenix, to be built by the end of the decade, brings TSMC’s foreign direct investment in Arizona to $ billion. e PMT funding would result in about , direct jobs and tens of thousands of indirect jobs. (Continued from page ) (Continued on page ) Intel CEO Pat Gelsinger (right) and U.S. Secretary of Commerce Gina Raimondo announced on March 20 at Intel’s Chandler facility a non- binding preliminary memorandum of terms whereby the CHIPS and Science Act would fund $8.5 billion in Intel semiconductor projects. Photo courtesy of Intel Corporation 2023 Workers’ Comp Index Rate: 0.87 Industrial power cost per kWh: $7.86 Total Rev. as Share of Total Expenses, FY 2007-21: 104.4% Selected Top Projects by Capital Investment COMPANY CITY INVESTMENT $M LG Energy Solution Queen Creek 3,200 LG Energy Solution Queen Creek 2,300 Amkor Technology Peoria 2,000 Nextera Energy Resources / Linde Tonopah 1,000 Desert Studios Buckeye 900 Source: Conway Projects Database Business Tax Climate Rank Change 2023–2024: +5 Higher Ed. R&D Expenditure in $000s: 1,690,904 BY THE NUMBERS ARIZONA 14 th 20 th 33 rd 43 rd 25 th 17 th Number of NCRCs: 9,919 | Percent Improved 2022–23: 4.81%T he transition thirty years ago from a closed military base to a thriving airport mitigated the loss of thousands of jobs and heralded a new era of economic vitality for Phoenix-Mesa Gateway Airport (Gateway Airport). The Airport has flown under the radar to emerge as a 3,000-acre economic development project with significant aeronautical and non- aeronautical opportunities. Located 30 miles southeast of Downtown Phoenix, in Mesa, Arizona, Gateway Airport has surpassed even the loftiest projections that were made when envisioning what has now become a growing hub of jobs and economic activity. In 2024, Gateway Airport has a long list of celebrations to commemorate the progress made, with a foresight of what is yet to come. This summer, Gulfstream Aerospace will open its brand new 225,000 sq. ft. West Coast Service Center. Since announcing its arrival in November 2021, the company has hired more than 250 employees and already occupies over 100,000 square feet of space for its Maintenance, Repair, and Overhaul (MRO) activities. Virgin Galactic will also complete construction of two large facilities totaling more than 150,000 sq. ft. located between Cessna/ Citation and Embraer’s Service Centers. One large hangar will house the “mothership” Eve, and the other will include four assembly bays to produce Delta Class spaceships. The mothership will transport the spaceships manufactured at Gateway Airport to New Mexico for horizontal launch as part of Virgin Galactic’s space tourism program. Gateway Airport has two world-class airport business parks currently under development. SkyBridge Arizona (SkyBridge), which includes 360 acres of aeronautical and non-aeronautical land, is being developed by Mesa SkyBridge LLC. SkyBridge has invested more than $75 million in horizontal infrastructure and will soon cut the ribbon on two 250,000-square-foot industrial buildings. Gateway East is a 270-acre non-aeronautical development opportunity strategically located on the east side of the Airport adjacent to two major freeways (SR 24 Freeway and the Loop 202 San Tan Freeway). The Boyer Company, LC (Boyer) from Salt Lake City, UT, is planning a mixed-use airport business park that includes office, industrial, and commercial retail space. Boyer recently announced their first tenant, XNRGY Climate Systems, which will occupy a 275,000 build-to- suit headquarters and manufacturing building. At full build-out, SkyBridge and Gateway East will represent thousands of new high-wage jobs in the region. This job growth is fueled by a unique concentration of higher education institutions within walking distance of Gateway Airport that are creating a local pipeline of experienced engineers and technicians. Further supporting this dynamic ecosystem are a stable political environment, less red tape and regulation, and a suite of incentives to encourage quality job growth. Gateway Airport has become Greater Phoenix’s centerpiece for the development of aeronautical, advanced manufacturing, warehouse, and industrial opportunities. This growth can be attributed to several things, such as Foreign Trade Zone and Opportunity Zone eligibility, Military Reuse Zone designation providing construction sales tax and property tax savings, and a significant real property tax exemption. Proximity to Interstate 10, Union Pacific Rail, and plentiful power and other infrastructure makes Gateway Airport a ready-to-build location. Finally, with Arizona State University and Chandler- Gilbert Community College adjacent to the Airport, the prepared workforce is within walking distance from the exciting careers that await them. This redeveloped former U.S. Air Force Base now contributes more than $2 billion annually to Arizona’s economy, making it an internationally recognized economic powerhouse with a growing reputation for attracting leading global companies in addition to serving approximately two million annual commercial passengers. Gateway Airport stands out as the country’s most successful Air Force Base redevelopment project, and it’s just getting started! PHOENIX-MESA GATEWAY AIRPORT: SOARING BEYOND EXPECTATIONS AVERTISEMENT Virgin Galactic, Cessna, and Embraer anchor the Gateway Executive Airpark.Next >