Can Fresno attract computer chip companies to town? Councilmember has plan to do it
A proposed package of economic incentives is being offered by a Fresno City Council member with the hope of attracting high-tech computer chip manufacturing and supply to Fresno.
Councilmember Nelson Esparza will introduce a resolution to create the Fresno CHIPS Incentive Program at Thursday’s City Council meeting, building off of the federal CHIPS and Science Act signed by President Joe Biden in August 2022 as a means of encouraging manufacturers of computer chips to establish production facilities on American soil.
The federal act included almost $53 billion for U.S. semiconductor research, manufacturing and workforce development, including $39 billion in manufacturing incentives.
Esparza and Will Oliver, CEO of the Fresno County Economic Development Corporation, said they believe Fresno would become the first locality in California to offer such supplemental incentives if the resolution is approved.
“In short, this legislation will provide us with the edge that we need to be competitive in this market as the industry begins to grow again here on U.S. soil,” Esparza said. “Fresno could lead the way in attracting those companies in the semiconductor supply chain here to the Central Valley.”
To qualify for the incentives, which could take the form of sharing property taxes, sales taxes and other means, a participating company would first have to:
- Demonstrate eligibility for the federal CHIPS incentives.
- Create at least 60 new jobs.
- Depending on company size, make a 10-year investment in the city of at least $20 million for smaller firms or at least $300 million for larger companies.
In exchange, the city would be able to offer property or sales tax incentives to participating companies at the rate of $1 for every $15 in wages paid to employees.
“By incentivizing manufacturers … we are in essence attempting to create a semiconductor hub here in Fresno,” Esparza said, “and in turn, positioning our city as a center for technological advancement and economic growth.”
“We’re constantly asking ourselves, ‘What can we do to raise the economic bar for our city?’” Esparza said. “What can we do to spur economic activity? What can we do to diversify our local economy? What can we do to create new quality jobs that exceed the median wage near Fresno?”
Oliver, who worked with Esparza to craft the proposal, said the program would foster growth in the semiconductor industry by providing performance-based incentives to companies that establish facilities in Fresno.
“It’s a unique opportunity for Fresno to help grow the U.S. supply chain and innovation ecosystem,” Oliver said, “due in part to the city’s business-friendly environment and proximity to Silicon Valley and two major seaports.”
Oliver added that Fresno also has multiple daily nonstop flights to Phoenix, which is emerging as a hub for companies that fabricate products using semiconductors and microchips.
Adding to Fresno’s potential attractiveness to manufacturers are lower wages relative to California’s major technology hub in Silicon Valley and the Bay Area – an average of 18.4% lower for occupations such as electrical, electronic and electromechanical assemblers.
Genelle Taylor Kumpe, CEO of the San Joaquin Valley Manufacturing Alliance, said she believes the Fresno CHIPS incentives could add to the growth already being experienced in the local manufacturing sector.
“Manufacturing jobs in Fresno have been and continue to be on the rise,” Taylor Kumpe said, adding that the pace of the increase is greater than the state and national average. “This achievement of growth underscores our city’s commitment to fostering innovation and driving prosperity for all of our residents.”
“This new sector can and will find its rightful place alongside the ever-evolving landscape of the manufacturing industry here in Fresno,” she added.
Oliver said the program also aligns with a $24 million grant the Fresno County EDC received last year from the U.S. Department of Commerce’s Good Jobs Challenge for workforce training in the central San Joaquin Valley.
Where such companies could locate in Fresno would need to be determined on a case-by-case basis depending on the intensity of use and appropriate zoning, Esparza said. Oliver said his agency has been fielding more inquiries from companies that could potentially benefit from the incentive program.
This story was originally published October 31, 2023 at 12:19 PM.
