Ohio Giving Intel a $2 Billion Incentive Package for its New Fab
Intel made headlines recently by revealing its plans to build a next-generation silicon fab in the heart of the Midwest, creating what it hopes will become the “silicon heartland.” New details have emerged on what the state of Ohio offered Intel to get it to choose the Buckeye state over the other 38 sites it considered. Turns out it was a gigantic amount of cash. Of course, the state didn’t just write Intel a check and call it a day. Most of the actual money involved is in tax credits, infrastructure improvements, and so forth.
When we originally reported on Intel’s plans for its newest fab, we wrote that Ohio had offered the company an incentive package that was worth approximately $1 billion dollars. According to a new report from the Associated Press, the actual number is double what was originally reported. Intel has estimated the cost of building its new facility would be roughly $20 billion, but as part of the deal Ohio will give Intel $600 million to help offset that cost. The state is also pitching in another $700 million for road and water infrastructure upgrades. Water management is a critical piece in the puzzle, as silicon fabs use up to four million gallons of water a day to cool equipment and clean wafers. The upgraded water system will let Intel reuse wastewater.
In addition, the actual town where Intel is putting its fab — New Albany — won’t require Intel to pay any property taxes on its new 1,000 acre site for a whopping 30 years. Intel will also receive “job creation” tax credits for 30 years as well, which is worth another $650 million, along with $150 million in “economic development” grants. All told, it’s not hard to see why Intel chose Ohio given the generous package it was offered.
For its part, the state of Ohio believes it’ll be getting much more than what it’s paying back in the form of economic renewal. The project will provide up to 7,000 construction jobs that will last at least three years, as Intel plans to have its facility operational by 2025. Once it’s up and running, Intel says it will employ over 3,000 people at the new plant, almost all of them highly-skilled jobs. That many employees in one location will then lead to tens of thousands of new jobs for associated businesses and partners. The company also hopes its presence will usher in a new era of engineering education for the local colleges too, making the state of Ohio the newest “tech hub” in the US, where graduates go straight from college into Intel’s various engineering programs.
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