Intel’s drive to increase U.S. chips production has a positive side. It is not only aligned to government goals regarding competitiveness with China or national security. According to Gartner analyst Alan Priestley and vice president of Gartner, it will provide Intel with the necessary capacity to produce cutting-edge technology for future chips. This is more than Intel’s goal. The multi-billion-dollar plans to build four semiconductor fabrication plants — two in Chandler, Arizona and two just north of Columbus, Ohio — represent something bigger: the potential to be a boon for many U.S. businesses beyond solely the biggest.

This was one of Biden’s soundsbites at the Intel speech segment. He said it would be crucial for “technology that we have not invented yet”.

However, the investment by Intel is seen as a huge win for Ohio’s Rust Belt communities. 

Tim Opsitnick is chairman of Council of Smaller Enterprises, Greater Cleveland Partnership. This chamber of commerce has about 12,000 members in Northeast Ohio. Opsitnick, his constituents, are situated about 100 miles northeast from the planned New Albany, Ohio Intel facility. But he expects the regional business opportunities to spread. Opsitnick said that companies have been asking, “How do we position ourselves to take advantage of these opportunities?” He stated. It is truly unprecedented.

Intel chose to locate near Columbus in Ohio. This is a city with a strong financial sector and white collar government. It will likely be the site of one of America’s largest new clusters for manufacturing jobs. The case is prime evidence of reshoring. Companies from multinational corporations have moved some of their production home from various locations across the globe. This is typically Asia or other countries where labor has historically been more affordable.

Since the Covid-19 pandemic, there has been a steady upswing in reshoring. This is due to U.S. regulatory and corporate tax cuts as well as concerns over rising overseas wages. The Covid-19 Pandemic caused import shortages and supply chains problems, which propelled reshoring at record levels by 2020. Harry Moser, the founder of Reshoring Initiative (a non-profit dedicated to bringing back American manufacturing jobs), said that it was these events.

Moser said that consumers, companies and government saw the consequences of peak-Covid personal protection equipment. Other industries saw it and also warned that this could occur to them.

Reshoring Initiative data shows that 230,000 more manufacturing jobs have been transferred to America in 2021 than 170,000 in 2020. The bulk of these jobs involve transportation equipment, where the size and weight of the products — components for cars, planes and boats — eat away at the total cost savings of overseas production. Today, reshoring is occurring at an increased rate in certain sectors, including computer/electronic goods and electrical equipment components. This includes solar panels, batteries, drones, and lithium-ion batteries.

According to announcements made by Intel, Samsung, Taiwan Semiconductor Manufacturing Company, the U.S. Semiconductor Industry jobs will increase over the next three-years. Priestley says that these plants will increase the supply chain for semiconductors by giving chipmakers the ability to create chips for the products they want in three- to four years. The fabs won’t make the U.S. self-sufficient in terms of total supply chain logistics — chips still need to be shipped around the world to be integrated into products — but adding capacity at home reduces Intel’s reliance on foreign partners.

Terry Esper is an associate professor of logistics in the Fisher College of Business, The Ohio State University. He stated that when an industry becomes so hampered by trade barriers, it’s time to rebalance. All industries have been involved in this larger discussion about network reconfiguration. It involves balancing where manufacturing takes place and where distribution occurs. This also aims to lower the risk.

According to Moser, roughly half of all jobs reshored are held by small companies in the supply chain. Reshoring is a benefit for small American companies in two ways. A multinational corporation may switch from overseas to domestic suppliers or an American company which initially assembled the final product abroad will move its processes to the U.S. and find local suppliers.

Small business proponents near New Albany, Ohio, hope that’s the case once Intel’s new semiconductor fab — its first new manufacturing site in 40 years — goes online in 2025. Intel claims the new site will provide 3,000 jobs for Intel and 7,000 jobs in construction over the course of the next three-years. The announcement also stated that it hopes to provide support for “tens and thousands” of long-term, local jobs through a diverse ecosystem of suppliers partners.

Gelsinger isn’t certain Intel’s economic impact would be equal to his Silicon Heartland prediction. Penn State’s research has shown that areas with large non-local corporations have slower long-term economic development than regions that are bolstered locally by small-owned businesses. Stephan Goetz is a Penn State Professor of Regional Economics and Director of the Northeast Regional Center for Rural Development. He explains that big businesses tend to use in-house systems for accounting, legal supply, and maintenance. He said that Intel should be asking themselves if they are bringing in everything from outside. This would create a completely different impact. [on the region]A firm which sources local supplies is better than one that does not.”

To sustain a viable workforce, Intel said it’s investing about $100 million over the next 10 years in partnership with Ohio universities, colleges and the U.S. National Science Foundation to build semiconductor-specific curricula for associate and undergraduate degree programs. On a national level, in reshoring hotspots like Arizona, Ohio, Tennessee and Oklahoma, more state and local governments — and organizations like Tooling-U SME — are focusing on intercepting and training students at the high school level.

“The ecosystem that’s been developed is why Intel is here — the leadership in Ohio has never stopped making investments in manufacturing, infrastructure and training,” said Kimberly Gibson, the ecosystem director at America Makes, a membership organization in Youngstown, Ohio, for the additive manufacturing and 3-D printing industry. “Intel’s decision not to locate the Ohio facility will have a lasting impact on generations.