New York State Gets Tapped for New Chip War Offensive

The center of gravity in the US-China battle for semiconductor supremacy is shifting to an unlikely part of the country: Upstate New York.

Photo of New York Governor Kathy Hochul
Photo by Metropolitan Transportation Authority via CC BY 2.0

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The center of gravity in the US-China battle for semiconductor supremacy is shifting to an unlikely part of the country: Upstate New York.

The state and multiple tech companies will invest $10 billion toward outfitting the University of Albany’s NanoTech Complex with some of the world’s most advanced chipmaking machines. 

Betcha Can’t Make Just One

Most of us have never seen a microchip, but they’re pretty much the brains for everything from iPhones to washing machines. However, the pandemic disrupted supply chains, leading Washington and its allies to realize how dependent they’d become on an increasingly hostile China for this critical industry.  

The Chips Act shored up nearly $53 billion for US-based chip research and development and just this week, BAE Systems was awarded the first allocation for a military aircraft chip plant in Nashua, New Hampshire. In the past three years, companies have announced more than $200 billion in their own investments for domestic microchip production. Additionally, the US has placed sanctions on the exporting of advanced chips and the machines used to make them to China, in order to deny their development for military purposes.

While the US appears to be ahead of China in some regards, it still has some catching up to do: America’s share of global chip manufacturing shrunk to 12% in 2020 from 37% in 1990, while China’s share has gone from basically nothing to about 15%, The Wall Street Journal reported. Taiwan still owns the largest market portion with roughly 20%, and the fear is that China could easily dominate the chip space if it eventually invades its neighbor. As the US attempts to speed toward microchip dominance, the latest plans for the Albany NanoTech Complex could be its ace in the hole:

  • The complex has been around for decades, producing notable successes in chip research, and now the state along with partners including IBM, Micron Technology, Applied Materials, and Tokyo Electron will help fund the construction of a new building and stock it with machines from Dutch company ASML Holding.
  • ASML’s hardware, which costs hundreds of millions of dollars, makes the most advanced microchips. The machines going to the Albany center make chips that won’t even be on the consumer market until 2025.

Excelsior! Tech companies including GlobalFoundries, ON Semiconductor, and Wolfspeed also operate chip factories in New York, and Micron is planning to invest up to $100 billion in facilities near Syracuse, the WSJ reported. So in addition to having the best pizza, the best bagels, and the most hated (if not best) baseball teams, New York might soon be home to the best microchips.