< Previous78 JANUARY 2025 SITE SELECTION Southeast. But, with the exception of Frankfurt, no global market has more new data center projects in the pipeline than Northern Virginia. e current situation is a major hit to development in the region, but in the long run, Northern Virginia will remain a dominant global data center hub.” Atlanta: “Atlanta has been one of the fastest- growing data center markets in the U.S. for several years. Aside from recent and ongoing developments from the likes of Meta, Microsoft, Flexential, QTS and Digital Realty, Atlanta benefi ts from the kind of parallel market and sector development that we highlight in the Market Connectivity Score. With the launch of DC BLOX’s submarine cable landing station in late and a new fi ber route to Atlanta passing through Berkeley County, the market has gained signifi cant new paths to hyperscale development east of Atlanta. As new subsea cables are planned to launch in Myrtle Beach, Atlanta will have new direct fi ber routing to destinations in Europe, Latin America and along the Eastern Seaboard.” Richmond: “A coalition led by RVA Connects has spearheaded an initiative to transform the Richmond-Hampton Roads-Virginia Beach corridor into an internet hub. I had the opportunity to consult [for] the group in the early stages of the initiative as they developed a strategic plan. e region had several major advantages in intentionally working to transform itself into a hub — chiefl y, intercontinental submarine cable landings in Virginia Beach, where operators backhauled through the corridor to Ashburn; hyperscale data center development from the likes of Meta and QTS; a major Microsoft cloud region; and a new internet exchange from the world’s largest IX provider, DE-CIX. e coalition hopes to build on these assets and its regional tech talent base to increasingly localize network services, provide deeper access to remote surrounding markets and to attract more tech talent to transform the local economy.” Dallas: “Already a top data center market in the U.S., Dallas is ranked as the nd fastest- growth market right now according to the MCS. is is due both to having more data centers in the near-term pipeline than almost any other market and to the fact that nearly GW of clean energy are planned to enter the grid near the city in the near term. As power availability becomes an urgent concern nationwide and globally for the data center sector, well-developed markets with access to clean power will be in high demand.” We also secured feedback on these fi ndings from a location strategist at a Fortune tech company. “Overall, from examining the rankings and the methodology, this is a strong resource for ranking metros that are positioned to land additional investment, particularly in data center development,” he writes. “ e debate is whether you believe that data center construction and operation is synonymous with Tech Hub. e case could be made that data center ops are just the industrial component of the tech industry, as the facilities have extremely low employee-to-capex or employee-to- sq.-ft. ratios.” In the background, there’s more at play than data centers, he continued. “Due to the low employment requirement ratios for running DCs, and the declining number of more traditional (non-DC) IT roles as more functionality gets automated or turned into an AI capability, there is strong availability of necessary talent in all of the larger metro areas,” he says. “On the fl ip side, in the smallest metro areas competing for DCs, they never received their standard ‘location quotient’s worth’ of the tech talent diaspora, and therefore may actually struggle to staff these facilities. An example: In Tulsa you might need to examine talent availability factors. In Kansas City you would not need to (other than calibrating your planned compensation).” Asked to comment on the top , he says, “Large metros and super-regions will continue to spill over and smaller metros adjacent to large ones will see great benefi ts.” Spillover from Washington and Baltimore to Richmond and Virginia Beach is a prime example of such a megaregion, he says. Others include San Antonio (proximate to Austin); the Milwaukee-Chicago corridor. “Greenville- Jon Hjembo, Senior Manager, Infrastructure Research, TeleGeography SITE SELECTION JANUARY 2025 79 A SIDELONG GLANCE AT THE REST OF THE WORLD W hile the data sources used for this inaugural Emerging Tech Hubs Index did not allow for a global study, one of those sources does so on its own. TeleGeography’s newly launched Market Connectivity Score tooL, offered by subscription through its Data Center Research Service, enables users to compare global data center markets based on 43 data points clustered into nine groups: • Data Centers • Internet Exchanges • Pricing • Cloud Infrastructure • Long-Distance Transport • Local Access • Power • Geography & Demographics • Regulations & Governance Frankfurt, Germany 61.9 London, U.K. 61.1 Tokyo, Japan 60.0 Amsterdam, Netherlands 55.1 Singapore 54.5 New York, U.S. 52.4 Washington, D.C., U.S. 51.9 Paris, France 51.3 Hong Kong, China 49.8 Los Angeles, U.S. 48.1 TOP 10 MOST CONNECTED CITIES IN THE WORLD ACCORDING TO THE MCS Spartanburg could see spillover from Charlotte and to a lesser extent Raleigh and Atlanta,” he observes. “Atlanta could also spill into Chattanooga, Birmingham, Augusta. Phoenix spillover to Tucson; Cleveland spillover from Detroit and Columbus; Worcester will spill from Boston; Kitchener-Waterloo spill from Toronto.” He sees potential for an even more in-depth methodology that incorporates such factors as STEM skills, cost of living and particular higher education degrees. “I want to know what’s happening in these zones, and building a methodology to accurately capture they dynamism over the next five years will be very interesting.” He says some metros just missing the top 25 are worth noting as well: Detroit (26), Indianapolis (28) and Salt Lake City (31). “All three have more than adequate talent, good connectivity/infrastructure and flat land to build,” he writes. “I also think that the Upstate New York region, which didn’t even make it into your model, holds great promise. All of Buffalo, Rochester, Syracuse and Albany have adequate talent and infrastructure to house the modeled development. “Overall, I see investment getting clogged up in the markets at the top of this list and spilling into adjacent metros and regions. The areas poised for the most growth are those proximate to the super regions, but also larger Tier 2 metros with space to expand, deep talent pools, lower cost of living/ operation and good connectivity, but also a lack of major weather/environmental impacts. These would be places like Columbus, Denver, Minneapolis, Richmond, Kansas City, Detroit, Indy, Salt Lake City and Cleveland.” 80 JANUARY 2025 SITE SELECTION T he U.S. will triple its semiconductor manufacturing capacity from , when the CHIPS and Science Act went into eff ect, to , according to a report from the Semiconductor Industry Association (SIA), in partnership with the Boston Consulting Group. e projected % growth is the largest projected percent increase in the world over that time. e study, “Emerging Resilience in the Semiconductor Supply Chain,” also says the U.S. will grow its share of advanced logic (below nm) manufacturing to % of global capacity by , up from % in , according to an SIA release. Additionally, America is projected to capture over one-quarter ( %) of total global capital expenditures (capex) from - , ranking second only to Taiwan ( %). In the absence of the CHIPS Act, the U.S. would have captured only % of global capex by , according to the report. e report also analyzes the eff orts underway in other countries to incentivize chip production and innovation and the criticality by MARK AREND mark.arend@siteselection.com Report: U.S. Set to Dominate Global Chip Production SEMICONDUCTORS & SUPPLIERS Photo: Getty Images SITE SELECTION JANUARY 2025 81 of ensuring chip companies have open access to global customers and suppliers, among other topics. “Effective policies, such as the CHIPS and Science Act, are spurring more investments in the U.S. semiconductor industry,” said Rich Templeton, chairman of the board at Texas Instruments and SIA board chair, in the release. “These investments will help America grow its share of global semiconductor production and innovation, furthering economic growth and technological competitiveness. Continued and expanded government-industry collaboration will help ensure we build on this momentum and continue our next steps forward.” Other key report findings per SIA: • America’s world-leading 203% projected increase in fab capacity from 2022 to 2032 stands in stark contrast to its modest 11% increase from the previous decade (2012- 2022), which ranked last among all major chip-producing regions, according to the SIA/BCG report. • The U.S. share of the world’s chip manufacturing capacity will increase from 10% in 2022 — when the CHIPS and Science Act was enacted — to 14% by 2032, marking the first time in decades the U.S. has grown its domestic chip manufacturing footprint relative to the rest of the world. In the absence of CHIPS enactment, the U.S. share would have slipped further to 8% by 2032, according to the report. • The U.S. continues to lead the world in its overall contribution to the global value chain, with strong leadership positions in high value-added areas of semiconductor technology, including chip design, electronic design automation (EDA), and semiconductor manufacturing equipment. See charts throughout this article for SIA visuals.Robert Hess, Vice Chairman, Global Strategy, and Vice Chairman, Global Corporate Services, Newmark Gregg Wassmansdorf, Senior Managing Director, Global Corporate Services, Canada, Newmark 82 JANUARY 2025 SITE SELECTION Landing a semiconductor fab facility is transformational for any community. For better or worse, depending on one’s perspective, things will never be the same. The ramifications can be overwhelming. But effective leadership and communication with stakeholders can turn local trepidation into optimism. In December, Site Selection spoke with two veteran site selectors with years of experience working with companies and communities on the sometimes-thorny process of siting and establishing megaprojects, including chip plants. Following is a Q&A with Newmark Vice Chairman, Global Strategy, and Vice Chairman, Global Corporate Services Robert Hess and Senior Managing Director, Global Corporate Services and Senior Managing Director, Canada Gregg Wassmansdorf. What is meant by “placemaking” in the context of new chip fab facilities being built? Robert Hess: I met recently with a large South Korean client that we have done many battery plant and semiconductor studies for. We met about the site selection projects we’re working on, but we also met with two other divisions that were focused on placemaking around those assets. They were talking about multifamily housing, housing for their workers, live-work-play environments — everything we’ve seen being important post-COVID is on their minds also, making these large projects successful. I’ve been thinking about this for years and years looking at sites, but how are the developers thinking about this? It’s about communities and economic development coming together. This has been a big thing for some time, but it will be even bigger going forward. NOTES FROM THE FIELD: What to Know About Siting a Semiconductor Plant84 JANUARY 2025 SITE SELECTION Gregg Wassmansdorf: In some locations, community development and economic development have gone in diff erent directions with separate staff s, separate budgets and separate agendas. What we have been emphasizing as a practice to communities and regions is you have to bring community development and economic development back together. If the housing, the daycare, the public transportation, if the public infrastructure isn’t there, what economic development ends up selling becomes a fi ction, so divorced from what the community can support that the projects you attract end up struggling or even failing. You have to bring the two back together. is is especially true of the mega projects, these fabs where without a concerted, focused eff ort on these placemaking initiatives you run the risk of bending or breaking the community in which you land. It becomes an all-hands-on-deck eff ort, and we sometimes see it formalized in an incentives package. For example, in New York you won’t get Green CHIPS [Community Investment Fund] money if you are not committed to doing some of these things. In other places it might not be documented in that way, but it’s understood that we must get everybody moving in the same direction to raise the capacity of the whole community to support what is about to come. With so much chip production coming back to the U.S., is NIMBY resistance an issue as companies look for suitable sites? Gregg Wassmansdorf: e short answer is yes. ese projects are so large it’s hard to imagine what these projects will mean when they land in a community. Photo by SweetBunFactory: Getty Images If the housing, the daycare, the public transportation, if the public infrastructure isn’t there, what economic development ends up selling becomes a fi ction, so divorced from what the community can support that the projects you attract end up struggling or even failing.” — Gregg Wassmansdorf , Senior Managing Director, Newmark f the housing, the daycare, the public If the housing, the daycare, the public 86 JANUARY 2025 SITE SELECTION ere is concern, fear and uncertainty. ere is excitement as well, a whole blend of emotions that percolate to the surface and everyone is motivated by diff erent concerns, such as loss of agricultural land or congestion on the roads or the kinds of jobs it’s creating in these hard times. It takes a lot of education by state, regional and local leaders and workforce development agencies. Like I said, it’s all hands on deck. It takes a lot of public education to bring communities along the path of accepting economic growth generally and I think that it is magnifi ed when it’s a megaproject. ese things are infl ection points that change the future of a community and a region. So it requires discussion about what this really means. Robert Hess: It helps to look at it by asset type. A hyperscale data center is not a gigafactory, a cell plant is not a fab and it’s not advanced manufacturing in some other industry. ey all have a “NIMBYism” meter. Economic impact studies by third parties have shown that the multiplier eff ect for hyperscale data centers is just short of what a semiconductor is. With fabs there is generally less NIMBYism. It also depends on whether the area is targeting the industry and whether they are preparing for it. Transparency is important and it helps to have coalitions up front so that things will go smoothly when you get to that city council meeting. We want more sites, and we want more ready sites, more qualifi ed sites. at’s our mantra. But I’m wondering if there isn’t some decent product out there that just needs to be reimagined, repositioned and repurposed.” — Robert Hess , Vice Chairman Global Strategy, Newmark We want more sites, and we want We want more sites, and we want Next >