Northwest Arkansas Democrat-Gazette
Kansas to give $304M to chipmaker
Company officials say promised federal funds also needed to build factory
TOPEKA, Kan. — Kansas plans to give $304 million in taxpayer-funded incentives to a semiconductor company in its largest city to build an expansive new factory, but project officials say the effort will fizzle without funds promised by the federal government to rebuild the nation’s chipmaking capacity.
Democratic Gov. Laura Kelly announced Thursday that Kansas has an agreement with Wichita-based Integra Technologies for a 10-year package of tax breaks and expense reimbursements. State officials said the planned $1.8 billion chip plant spans 1 million square feet, potentially employing 2,000 residents and creating an additional 3,000 jobs among suppliers and other local businesses.
The announcement comes as the United States tries to rebuild domestic chipmaking capacity. The chips are vital to smartphones, laptops and other modern conveniences, as well as vehicles and lifesaving medical devices. Congress last year approved a measure, the Chips and Science Act, that promised more than $52 billion in grants and other incentives for the semiconductor industry.
Kelly told reporters Thursday the state’s incentives are crucial to attracting the federal funds and “making Kansas an essential part of our country’s national security efforts.”
“This advanced manufacturing facility is part of a national push to restore our semiconductor industry so that U.S. workers and businesses can compete and win in the race for the 21st Century,” Kelly said.
Integra CEO Brett Robinson would not disclose how much federal funding the company needs, only saying there’s “no commercially viable way” to complete the project without federal funding. He and state officials said other states were trying to attract the project but did not specify which states.
President Joe Biden pushed Congress last year to boost the U.S. semiconductor industry because of a shortage of chips made worse by the global coronavirus pandemic and concerns about international rivals, namely China. For decades domestic chip production has shifted to cheaper-to-operate Asian plants, and the industry now largely depends on Taiwan, which China has long claimed as its territory.
Integra, founded in 1983, has about 500 employees in Wichita and California’s Silicon Valley. Its planned factory in Kansas is expected to pay an average annual wage of $51,000, about 46% higher than the state’s average of about $35,000.
For Integra to receive the state’s incentives, the company must invest at least $1.5 billion in the new factory in the next five years and consistently provide the equivalent of 1,600 full-time jobs for 10 consecutive years.
The incentives are part of a program Kansas created last year to boost its ability to compete with other states for large factory projects. Under the program, Kansas was allowed to offer up to $1 billion in incentives to a single company in 2022 and again this year.
In July 2022, Kelly and other state officials announced that Panasonic plans to build a factory to produce electric vehicle batteries for Tesla and other carmakers. The state lured the Japanese electronics giant to the edge of the Kansas City area with incentives worth $829 million over 10 years, the most the state has ever offered.