Jul 10, 2022 - Politics & Policy

Postcard from Ohio: Semiconductor blues

Illustration of a semiconductor chip with the shape of Ohio cut out of the center.

Illustration: Allie Carl/Axios

COLUMBUS, Ohio Inflation, guns and abortion are shaping midterms races everywhere. But in Ohio, a more niche concern — Congress' stalled China competition bill and its $52 billion for the domestic semiconductor industry — has grabbed candidates' attention even as voters are still figuring out why they should care.

Why it matters: Senate rivals Rep. Tim Ryan (D) and J.D. Vance (R), as well as GOP Gov. Mike DeWine and Democratic challenger Nan Whaley, all know that the fate of the CHIPS Act could impact thousands of jobs and carry long-term economic implications for the state.

The big picture: Intel has pledged to spur a "Silicon Heartland" starting with a $20 billion project creating semiconductor fabricating plants in Licking County on the outskirts of Columbus.

  • That could create 3,000 full-time jobs there, plus ripple effects for hundreds of suppliers across the state and investment and partnerships with universities.
  • Passing the CHIPS Act could speed and maximize the project's scope. But if the bill doesn't pass, there are concerns it could slow or diminish Intel's commitment and shift money and jobs overseas.

Senate Minority Leader Mitch McConnell (R-Ky.) has threatened to sink the CHIPS Act if Democrats push ahead on a climate, energy and tax deal without GOP support.

  • Rather than back down, Democrats hope to pull together votes to bypass McConnell and get the semiconductor funds without sacrificing other priorities.
  • With the bill stalled, Intel has delayed a groundbreaking ceremony set for this month. Spokesperson Nancy Sanchez told Axios that "while the ceremony is delayed, our construction plans have not changed" — but the scope and pace will depend on the legislation.

Zoom in: In Licking County, where Donald Trump received 63% of the vote in the 2020 presidential race, stretches of cornfields, small farms and rural homes dot the area where Intel will begin to build. Local governments have started hiring planning and development directors to prepare.

  • Jamie Karl, communications director for the Ohio Manufacturing Association, said the impact goes beyond central Ohio. "We have 1,500 members all across the state ... from mom and pop shops to Whirlpool and Honda — and nearly all of them are being affected by the chip shortage."
  • "There's a hundred suppliers in the state of Ohio that are going to supply Intel," Ryan told Axios. "If you land a monster like Intel, that is the beginning of a cluster of economic development."

What we're hearing: In conversations around the state last week, only some voters told Axios they were familiar with the CHIPS Act controversy — and none called it key to deciding their vote.

  • Those familiar with Intel's plans know they are massive. But there was a common refrain of "where's our Intel plant?" — revealing a sentiment that resources regularly flow to the Columbus area while other parts of the state are left behind.
  • At a tavern in East Dayton, Tommy Boyd, 66, an electrician who supports Donald Trump, and Rob Jones, 56, a funeral director and lifelong Democrat, debated the effectiveness of COVID-19 vaccines and whether Gov. DeWine had handled the issue well. Semiconductors were not on their minds.
  • One Republican retiree who attended a Ryan event in Cincinnati told Axios he may split his votes — DeWine for governor but Ryan for Senate — because it bothered him that Vance went from Trump critic to courting Trump when it was expedient. Semiconductors aren't part of that voter's calculus.
  • "I don't know what all is going to happen" with the Intel plant, Edward Coil, 56, a machinist at Flex Machine Tools in Wapakoneta, told Axios. "But I think Trump is going to be back."
Tim Ryan at a factory
Tim Ryan, who is running for U.S. Senate, visits a machine tool manufacturer in Wapakoneta, Ohio, that has struggled to obtain U.S.-made components and find software talent. Photo: Sophia Cai/Axios

Donald Trump isn't on the November ballot. But as Vance and Ryan vie for the claim of champion for Ohio's working class, Ryan is making McConnell's gamble with the CHIPS Act — and the future of Ohio's semiconductor economy — a top campaign issue.

What they're saying: "This is a full-frontal attack on the state of Ohio, from a senator of a bordering state who's in a position of power," Ryan told Axios in an interview between campaign stops last week.

  • "Every Republican in central Ohio and every voter in Ohio will know that Mitch McConnell blew this off, and I'm going to hang it around J.D. Vance's neck."

The other side: Vance declined an interview request but in a statement to Axios cast the stalled legislation as a bipartisan failure. “The death of the CHIPS Act is a terrible indictment of our do-nothing leadership," he said.

  • "It has all the parts of the usual Washington story: a terrible problem, a group of local governments and companies coming together to solve it, and Democrats tanking it with their leftist wish list."
  • "Ohio may have just lost thousands of good jobs, and we may not have the computer chips necessary to power the modern economy."

Be smart: Ryan and Democratic gubernatorial challenger Whaley both face uphill contests. Sabato's Crystal Ball last month ranked the governor's race as "safe Republican" and the Senate race as "likely Republican."

  • Both Dems see championing Ohio's future role in the semiconductor industry as a way to show their commitment to creating skilled, high-paying jobs in the state.
  • "We need to pass that and then hit the gas pedal," Ryan said. "That needs to be a down payment on new industrial policy in the United States."
  • "There's no one in Ohio that doesn't want this plan to happen," Whaley said.
Tim Ryan and Nan Whaley
Tim Ryan and Nan Whaley. Photos: Drew Angerer; Chip Somodevilla via Getty Images

Between the lines: Beyond semiconductors, Ryan and Whaley are making different appeals to voters.

  • "Independent," Ryan says when asked to use one word to describe himself politically.
  • He believes "we did a great disservice to the country when we started touting the idea that everybody had to go to college."
  • "I'm a Democrat, but I don't think the government has all the answers," he told a group of Black entrepreneurs.

Whaley, a former mayor of Dayton, is the first woman to be nominated for governor in Ohio by a major party.

  • She's offering a rare all-female ticket, with Cuyahoga County Council vice president Cheryl Stephens. "These doors have been closed for women in Ohio for a long time," Whaley said. Their platform includes investing in child care and other issues that disproportionately impact women.
  • Whaley told Axios that the Supreme Court's overturning of Roe v. Wade triggering state bans — such as Ohio's at six weeks — may motivate turnout more than the fate of federal semiconductor funding.
  • But both issues impact Ohio's ability to recruit and retain women in the workforce, she said. "This is not a place that says, 'Yes, I am welcoming.' And I want women that are talented to come to Ohio right now."
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