Why Not Virginia for Semiconductor Manufacturing Expansion?

Virginia Engineering Programs

by James C. Sherlock

Among the things that the Russian invasion of Ukraine has made clear is the vulnerability of Taiwan and with it, the access of the U.S. economy to the 90% of advanced computer chips manufactured there.

The national security requirement for domestic chip manufacturing brings opportunity. It is the nation’s most urgent manufacturing priority. So, why not build the needed plants in Virginia? Is the Commonwealth organized to attract those investments?

For the answer to the last question I looked at the Virginia Department of Commerce and Industry, the State Council on Higher Education in Virginia (SCHEV) and Virginia’s engineering schools and found nothing to suggest Virginia is making an organized effort.

Much of Virginia’s headline effort in engineering education is to expand opportunities for Amazon workers in Northern Virginia.

I suggest Virginia focus its Department of Commerce and Trade on chip manufacturing, create dedicated educational consortiums, identify available facilities and workforces like those of the shuttered Rolls Royce plant in Prince George County and offer tax abatement packages to actively recruit semiconductor manufacture.

Virginia’s congressional delegation is pushing to make the state a national hub of semiconductor research. It is focusing on Henrico and Chesterfield as a potential location of a federally financed National Semiconductor Technology Center and National Advance Packaging Manufacturing Program.

I hope we get it.

But that is not chip fabrication. Virginia has no organized program that I have been able to find at the Department of Labor and Industry, among its universities or regional consortia to attract chip manufacturers.

Workforce composition. The controlling resources needed for chip foundries are educated and trained personnel.

You may know that Intel is making a huge investment in semiconductor plants in central Ohio. To discover what the work force must look like I consulted an article by the local NBC affiliate’s  Columbus Business First.

About half of the jobs that initially come to Intel’s future semiconductor manufacturing factories in New Albany may only require a high school diploma, a sign that a wide swath of Central Ohio’s workforce may find that a job at Intel is within reach.

Another 40% of the jobs directly hired by Intel may require bachelor’s degrees, according to an analysis of the employment distribution at semiconductor manufacturing plants using U.S. Bureau of Labor Statistics data.

Intel is anticipated to employ 3,000 workers directly as a part of its initial $20 billion expansion to Central Ohio, though the project may eventually get much bigger as Intel builds more factories, or “fabs,” here. Those jobs will come with an average salary of $135,000, 2.5 times Columbus’ median household income.

According to BLS data, nearly 50% of the occupations that typically make up U.S. semiconductor manufacturing plants require only high school diplomas. The biggest group of those workers are likely to be electrical and electromechanical assemblers, followed by semiconductor processing technicians, inspectors and testers, as well as assemblers and fabricators.

The 40% of a semiconductor manufacturing plant’s workforce that requires bachelor’s degrees includes industrial engineers, software developers, electronics engineers, computer hardware engineers and electrical engineers.

The remaining 10% or so of the typical semiconductor manufacturing workforce is scattered between 7% of workers with associate’s degrees, and smaller chunks with no formal education, postsecondary non-degree credentials and some college or no degree.

Current chip plants in Virginia.

Virginia currently has only a few fabrication plants.

There are two Micron facilities in Manassas, and privately-held Virginia Semiconductor Inc. builds chips in Fredericksburg. Micron has announced plans to invest more than $150 billion globally over the next decade in leading-edge manufacturing and R&D, including potential fab expansion in the United States.

In 1998, Motorola halted construction of a $3 billion plant in Richmond just after it was started.

What to do? Virginia, in order to compete for the exploding demand for semiconductor fabrication plants in the U.S., must combine the ability to provide and continually update an educated workforce. That means a combination of engineering schools and community colleges. Virginia’s engineering programs include (see illustration)

  • Engineering schools in Virginia: 47
  • Undergraduate engineering programs: 42
  • Graduate engineering programs: 16
  • Schools with on-campus housing: 15

The geographic dispersion of those college programs, like our community colleges, distributes the opportunities widely across the state.

As an example of what might be done, the University of Virginia School of Engineering

… partnered with the construction industry to 1) expand course offerings; 2) increase exposure to the latest in CEM technology; 3) bring more practicing professionals into our classrooms; 4) connect students directly with career opportunities; and 5) create opportunities for training and coaching students for construction competitions.

The Virginia Department of Commerce and Trade has initiatives in broadband, energy and workforce development. Its efforts in manufacturing are focused on advanced materials, aerospace, automotive and wood products. Those are important industries, but are not exploding opportunities like chip manufacturing.

The Commonwealth will also have to compete in the tax abatement contests that accompany the  quests for such investments. The states far ahead of Virginia in new plant construction include Arizona, Texas and Ohio.

We need to get in the game.

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35 responses to “Why Not Virginia for Semiconductor Manufacturing Expansion?”

  1. Tom Blau Avatar
    Tom Blau

    Interesting and valuable.

  2. Ironically, despite Federal noise about increasing chip manufacturing it may well be diminishing. EPA just passed stringent regulations phasing out HFCs and these are central to chip making. The law exempts chips for five years but under the exemption EPA gets to ration the HFCs chip makers can use. There is almost no growth in the rationing formula EPA came up with. China is looking good for growth since they supply most of the HFCs.

    1. James C. Sherlock Avatar
      James C. Sherlock

      The law requiring EPA regulation (https://www.federalregister.gov/documents/2021/05/19/2021-09545/phasedown-of-hydrofluorocarbons-establishing-the-allowance-allocation-and-trading-program-under-the) of the step-down of the use of HFC’s is basically a good idea. It is EPA regulation that is dangerous.

      Applied Materials and their competitors worldwide will figure out how to replace HFCs in the chip making process. They are used primarily as a chemical bath in the etching process, and they will find an alternative.

      That said, the EPA will screw it up if given the opportunity. Pause a minute, think of who applies for a career at EPA, and you have the picture. Green absolutists who consider the economy to be irredeemably destructive.

      Congress will intervene if the computer chip industry is threatened.

      Biden regulators are trying to destroy every industry in America. Heavy manufacturing, farming, oil and gas, electricity, pharmaceuticals, motor vehicles, airlines, and others are feeling their heavy hand.

      Only 2 1/2 years until a Republican appointee heads the each of the regulators.

      1. LarrytheG Avatar

        The EPA was DIRECTED by Congress and Trump to do the phase-out:

        ” The bill was passed by both houses of Congress on December 21, 2020, with large bipartisan majorities in support.

        After initially criticizing the bill, President Donald Trump signed it into law on December 27.[11][12][13]

        “A phase-out of hydrochlorofluorocarbons (HFCs), a powerful greenhouse gas that contributes to climate change; the measure will decrease HFC usage by 85% over 15 years, to avert what would otherwise be an additional 0.5 °C of global warming.”


  3. I expect that Virginia’s economic-development establishment recalls the high expectations for semiconductors in Virginia dating from the Allen administration, when George Allen boldly proclaimed Virginia the “Silicon Dominion” based Motorola’s announcement that it would build a major plant in Goochland County and White Oak Semiconductor’s announcement of a facility in eastern Henrico. The Motorola plant was never built, and White Oak (which became to Qimoda) was build but subsequently closed. Meanwhile, Micron in Manassas is still in business, but it expanded only with the assistance of massive state subsidies. It would be interesting to know what kind of subsidies Ohio is providing Intel.

    Virginia certainly should explore the potential for recruiting semiconductor facilities here, but we need to remember our history.

    1. Lefty665 Avatar

      Anecdotal note, my son was an early EE graduate from VCUs Engineering school that was part of the “Silicon Dominion” debacle. He works in C’ville with a company that has its own fab to make the unique semi conductors their products use. Although not remotely on the scale the “Silicon Dominion” envisioned, Virginia does have electronics R&D and Mfg that is world class.

      Remember that Manassas was built as an IBM fab and has been through a couple of hands to get to Micron. Large scale chip fabrication is a tough business, capital intensive, long lead time and cyclical as hell.

    2. James C. Sherlock Avatar
      James C. Sherlock

      The package Ohio gave Intel: a $600 million onshoring grant, $691 million for infrastructure improvements and $650 million for state tax credits. It appears it will prove a good investment if the facilities thrive.

      Intel, Texas Instruments and Micron will ask and get tariffs if their American plants do not thrive.

      The difference between now and when George Allen was Governor: the national security implications of relying on Taiwan production are just too intense.

      From an article on the subject of onshoring. https://www.thomasnet.com/insights/what-is-onshoring/#:~:text=What%20Are%20The%20Advantages%20of%20Onshoring?

      “Companies may benefit from onshoring in several ways:

      1. “Cost-saving – The days of cheap overseas labor and resources are coming to an end. Asia used to provide plentiful, affordable labor, but as countries like China and India continue to rapidly develop, the cost of wages and materials increases. Onshoring and reshoring can also stimulate national economies, so some countries may offer financial incentives for companies to keep their operations onshore.”

      2. “Easier to meet regulations – Production standards and regulations vary across the world. By maintaining domestic manufacturing operations, it is easier for businesses to meet quality demands, material standards, and to retain intellectual rights to things such as product design.”

      3. “Simplified supply chains – Rather than shipping goods across the globe, everything can be done and managed in one place using domestic partners, making the supply chain shorter and easier to manage.”

      4. “Political advantages – A lean toward protectionism in the U.S. and Europe means that companies increasingly prefer to trade inside their borders or with their closest neighbors.”

      1. LarrytheG Avatar

        None of the protectionist measures above will actually work unless the US blocks/prohibits trade from counties that are also our allies and buy products from us.

        It’s called trade and strongly supported by business and Conservatives in times past.

        And we’re essentially telling our allies like Taiwan and Korea that we’re going to do our own chips and we will no longer allow theirs to compete with our domestic chips.

        So, no need to be allies any more. Just let those countries deal on their own with their own economic security and the likes of China and North Korea.

        So we have Conservatives turning into nationalists and protectionists… “go it alone” instead of building and maintaining alliances

        Someone better come to their senses before this ends really badly….. as it has before….. we are ignoring history….

        1. James C. Sherlock Avatar
          James C. Sherlock

          I don’t support protective tariffs except for national security purposes. This is one.

      2. Lefty665 Avatar

        The difference between now and when George Allen was Governor: thenational security implications of relying on Taiwan production are just too intense.

        The implications were just as intense then, but the attractions of short term profits were more intense, even to flag waving ‘Muricans. As ol’Marx observed, a capitalist will sell you the rope to hang him with, and
        we have.

        Even moving hardware fabs back onshore leaves us with
        the vulnerability of firmware and drivers, most of which are world sourced and black box.

  4. Ruckweiler Avatar

    Would love to see this industry grow here in the Old Dominion but I’d rather see them proliferate across the country eliminating our use of Red Chinese products.

  5. DJRippert Avatar

    Why would any tech company build a multi-billion dollar chip fab in the Richmond area? You need lots of water and cheap electricity, I hear. Richmond has the former but not the latter (thanks to Northam, et al).

    Add Columbus to the list of state capitals that has thrived while Richmond was asleep at the wheel. That list includes Raleigh, Nashville, Atlanta, and Austin. You could even argue that Oklahoma City and Tallahassee have outpaced Richmond over the past 100 years (and lately).

    Richmond will never thrive until there is a top flight engineering school in the area and the city is allowed to annex some of the more populous areas on Henrico or Chesterfield. Or, until the city is in a county.

    Virginia’s legal and political structure os designed to thwart the development of real cities. Richmond is a case in point.

    1. LarrytheG Avatar

      It’s an interesting discussion. A related question to “why Richmond” might be why not other US cities like Charlotte or Oklahoma City and then of course, why China or Taiwan?

      Well, they don’t call it a global economy for nothing…….right?

      Should we stop offshoring and bring back industry to this country even if it costs more for labor or we don’t have the workforce we need?

      DJ talks like it’s just a matter of places like Richmond doing what is necessary to out-compete China or Taiwan or Oklahoma City….

      There are echos of MAGA in these questions, no?

      Which is a bit strange coming form folks who claim to be capitalists… and such….

      1. DJRippert Avatar

        Jeez, Larry – Maybe we should outsource our Army to Ukraine. They seem pretty competent on the battlefield.

        Do you understand national security at all? Do you really see no risk with semi-conductors being produced in Taiwan? Do you read the papers?

        As for Richmond …

        Raleigh has Research Triangle Park.
        Atlanta has Georgia Tech.
        Nashville merged a city and county to make governance easier.
        Austin has a vibrant music scene and the University of Texas.

        100 years ago Richmond was bigger than any of those cities.

        So, once again … why would any company put a semi-conductor fabrication plant in Richmond?

        There’s the Old South and the New South. Raleigh, Atlanta, Nashville and Austin are the New South. Richmond, Jackson (MS), Montgomery (AL) are the Old South.

        Richmond needs to make some changes if it wants to keep up with the New South cities.

        1. LarrytheG Avatar

          Fair enough. Are we labeling consumer products as national security or just things that are truly national security? Are you talking about any/all chips or just those the military wants/needs?

          Do you not think already that the military doesn’t make sure their components are domestic or sources secure already?

          Why would we put a semi-conductor plant in Richmond vice Mobile Ala or Shreveport, La or for that matter NoVa which you’ve said is not even a city even compared to Richmond!


          At any rate, I’m quite sure DOD already is careful about where they get their components , perhaps not 100% bullet-proof but fairly secure and usually very expensive.

          but again – consumer goods? domestic autos? TVs, cell phones, security cams, etc? all domestic now?

    2. Lefty665 Avatar

      Richmond and Virginia have good engineering education, and VCU adds a shiny piece with bio medical engineering. But there may be, as you note, other reasons the area is less attractive.

  6. Super Brain Avatar
    Super Brain

    We did get Route 288 out of the last microchip push.

    1. Nancy Naive Avatar
      Nancy Naive

      Rte. 288? Isn’t that the piece of a beltway that doesn’t make a beltway?

  7. Nancy Naive Avatar
    Nancy Naive

    Maida Development, Hampton, Va. One of the larger manufacturers of capacitors and a few other electric willies moved manufacturing to South Korea and Taiwan years ago. No intention of ever bringing it back — ever. So, no. You’ll buy your pair of Levis from Haiti and your chips from SE Asia.

    BTW, your York Peppermint Patties all say “Hecho en Mexico”. Now, about Canadian baby formula…

  8. killerhertz Avatar

    You need an engineering degree to do design, not work at a fab. The fabs should be in a location w/ the cheapest labor that can be trained up. It seems like the rust belt would be an ideal location.

    1. Nancy Naive Avatar
      Nancy Naive

      Uh yep. The rust belt of Afghanistan…

      1. Lefty665 Avatar

        But they have to compete with the wages of opium.

        1. Nancy Naive Avatar
          Nancy Naive

          Hmmmm, Intel? No intel? Tough choice.

          Police show amazing restraint not shooting heavily armed, uh, white guy. Same police force who shoves old guy to the ground.

    2. Lefty665 Avatar

      You’re right, it doesn’t take much education to put on a bunny suit. Cheap fine motor coordination keeps pushing the fabs and other tech mfg further back into the 3rd world. Places like Ohio and Indiana…Virginia.

      OTOH, as each generation of tools gets more capable and more highly automated the labor for each unit of output drops, so why not do them here?

      Long ago there were shops doing nat sec mfg scattered along the Appalachians. They were physically secure, there was an available trainable workforce, and it put money into the communities. It was a win, win, win.

      1. killerhertz Avatar

        I’m a proponent of not enabling critical industries to offshore. However, this is what our government policy has done as part of an effort to hide inflation.

        My point was that the universities in our region are irrelevant to the location of fabs.

  9. LarrytheG Avatar

    So we block commodity chips from being imported but we allow Toyota , Kia, etc..to source chips from Asia and then import the car while American-made cars can only have chips made in the USA which will be more expensive and harder to get?

    what’s worse than EPA regs? Trade regulations?

    1. Nancy Naive Avatar
      Nancy Naive

      Tariffs on baby formula.

  10. Nancy Naive Avatar
    Nancy Naive


    Not beyond the possible… perhaps if Youngkin behaves more like Abbott… and less lke Costello.

  11. Nancy Naive Avatar
    Nancy Naive

    Just as a note… if you think black lung is fun, wait’ll you get a gander at the carcinogens in chip making. Locate them well… like west Henrico.

    1. technology is dangerous – do away with ALL of it….

      1. Nancy Naive Avatar
        Nancy Naive


    2. Lefty665 Avatar

      Locate them well…Louisa and New Kent???

  12. Lefty665 Avatar

    Deindustrialization has been a long process and it will be long coming back if ever, Semi conductors have been a profoundly cyclical business, boom and bust, since their inception. That is a downside, along with pollution from the manufacturing process. There ain’t no free lunch.

    As we are seeing with many things, offshoring mfg has costs and vulnerabilities. The US has been foolishly killing our national industrial capacity aggressively for the 40 or so years since we let the MBAs, CPAs and Wall St. drive our economy. There is more to our national well being than the next quarter’s profits and stock price.

    1. energyNOW_Fan Avatar

      Agreed and many Americans feel all chemicals should be banned. So that is something we are going to have to rely on imports and/or Red states.

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