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Here's how Ohio won a bid by Intel to build the world's largest chip factory

It was a Christmas morning surprise for Ohio's governor and lieutenant governor: Intel was coming to Ohio.

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It was a Christmas morning surprise for Ohio's governor and lieutenant governor: Intel was coming to Ohio.

Published Updated

Gov. Mike DeWine was enjoying the kind of chaotic Christmas morning at the Governor’s Residence that most parents and grandparents experience. It was 10 a.m. and his children and grandchildren, many of whom had spent the night, were opening presents when DeWine’s counselor, Laurel Dawson, handed the governor a letter. 

It was from Intel CEO Pat Gelsinger and Senior Vice President Keyvan Esfarjani, officially telling DeWine that the semiconductor company had picked Greater Columbus for what will be the biggest economic development project in state history. 

“Ultimately, we hope to establish the largest semiconductor manufacturing site on the planet," the letter said. "We’re very excited to work with you and your state to couple Intel's innovation and world-class manufacturing process with Ohio's exceptional talent, capabilities and vision to strengthen U.S. semiconductor leadership."  

The letter, which was also delivered to Lt. Gov. Jon Husted, promised something that would change Ohio’s business community, the Columbus region's landscape and the governor’s legacy. It was the culmination of nearly eight months of work to convince Intel that Ohio was its best choice. 

Map of Ohio

"It was a great thing to get on Christmas," DeWine said. "It was kind of a surreal scene with kids running around opening presents." 

The first phase of the project calls for Intel to make a $20 billion investment to build two plants, called fabs, in Jersey Township in Licking County northeast of Columbus that will employ 3,000 workers with an average salary of $135,000 per year. There also will be 3,000 construction jobs and as many as 10,000 indirect jobs. 

The project could have three more phases, employing thousands more workers and tens of billions of dollars in additional investment by the Silicon Valley-based semiconductor company. 

DeWine and Husted spent hours with The Dispatch detailing how this project came together.  

May 3: First contact 

Intel reached out to JobsOhio, the state’s economic development arm, looking for potential sites for chip-making factories it wants to build.  

The state routinely receives requests like this, and Ohio has a history as a manufacturing powerhouse. But the request from Intel seemed unusual because Ohio has no experience producing semiconductors, which are necessary for everything from cars to refrigerators.  

Since the pandemic began and global supply lines have struggled to keep up with demand, more companies have reached out to the state about bringing back production that they've shipped overseas, Husted said.

The state never knows how serious the companies are, he said.

"We are getting more of that as of late," Husted said. "This was particularly large and had a lot of particular demands."

Without identifying Intel, JobsOhio sent a request out to its regional economic development directors asking for potential sites that meet the company’s parameters.  

They had just three days to respond. 

Here's what you need to know about Intel
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Intel is an American manufacturer of semiconductor computer circuits. The company's name comes from "integrated electronics." Intel is headquartered in Santa Clara, California.

Read more: Here's what you need to know about Intel

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"They don't give you a lot of information in the initial call about what it is they're doing," Husted said. 

One Columbus was the only regional partner to respond with a potential location: Jersey Township in western Licking County, near New Albany. It hadn’t been on the state’s radar, but the township featured many desirable traits: vast areas of farmland, affordable utilities, ample water supply (the factory would use 5 million gallons a day), and proximity to universities, highways, an airport and more. 

New Albany has already annexed land from Jersey Township for its International Business Park, and the area is home to massive data centers for Amazon, Google and Facebook.  

June 2: A long shot 

Intel agreed that the site meets its specifications, but made it clear that Ohio was a longshot at best to win the project. 

FILE

Ohio officials began the task of convincing Intel that even though there are no semiconductor plants in the state, Ohio can deliver the workforce and infrastructure for a high-tech manufacturing operation — and can do it fast.

And they began working out the logistics. Route 161 would have to be expanded through Jersey Township, and eventually New Albany would annex 3,190 acres of the township – 1,776 acres of which would house the first phase of the factories and potential suppliers. 

The state submitted its first offer of incentives to Intel that week.

“Intel is in a big hurry,” DeWine said. “They want to move, and they want to move quickly." 

On June 6, Intel sent a team to make a site visit.

"It doesn't have the infrastructure to get it done. At the same time, they also saw Facebook, Google and Amazon (all three have data centers in New Albany). If these companies are here, (Ohio) must be doing something right," Husted said of Intel's first impressions.

"The fact that we had other companies here at the top end of technology ... was an important factor. We were up to building the most advanced semiconductor project in the world."

Gelsinger said he didn't expect Ohio to win the competition for the site. The company was looking at 35 to 40 sites across many states, and Gelsinger said the state made Intel feel welcome.

"I want to give a lot of credit to the governor and lieutenant governor. They pursued us very aggressively," he said.

June 28: Megaproject incentives 

The state budget bill was passed, boosting the incentives Ohio can offer companies that are considered "megaprojects" like Intel’s factories. 

The incentives are available to companies that invest at least $1 billion in the state or create an annual payroll of at least $75 million. In return, they get job creation tax credits for 30 years instead of the usual 15 years.  

"Until that passed, we weren't in the game," Husted said. 

With the change, the state upped its offer to Intel to reflect the legislation.

Conversations among those involved in the project became more regular, daily in some instances, and the number of officials involved in the push to land Intel grew considerably.

Jon Husted, Ohio Lt. Governor
We view this as proving to the world that Ohio was as capable doing something like this as anybody.”

Along with One Columbus and JobsOhio, education partners at Ohio State University, Columbus State Community College and others became involved as did state transportation, environmental and development officials. Local partners became involved too, in New Albany, Columbus and Licking County.

While all the negotiations were going on with Intel, the land for the project was being assembled.

The collaboration along all those involved was critical to the project's success, Husted said.

"We view this as proving to the world that Ohio was as capable of doing something like this as anybody," he said. 

The jobs the factories will create require certifications, two-year degrees, four-year degrees and even doctorates depending on the position. 

What are computer chips, and why are they so important?
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Chips are integrated circuits or small wafers of semiconductor material, usually silicon or germanium, embedded with integrated circuitry. The delicate task of making them is done in so-called clean rooms. Before entering a "clean room," workers don safety gear so as to reduce contamination.

Read more: What are computer chips, and why are they so important?

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“A lot of jobs are going to come from people graduating from Ohio universities,” DeWine said. 

Sustainability also was something that the state needed to address. The plants will use 5 million gallons of water a day, but Intel is committed to eventually recycling all of the water it uses. It wants to power 100% of its operations with renewable energy, reduce its carbon dioxide footprint and have zero landfill waste.

As negotiations with Intel intensified, the state found that there were some things it couldn't do, Husted said. 

"We wanted to win, but we also wanted to build trust. Sometimes you tell people no. That builds trust because we were honest," he said. 

Sept. 24: Getting to know you 

Intel leaders met in the Statehouse cabinet room with DeWine, Husted, first lady Fran DeWine, members of DeWine's cabinet, JobsOhio leaders and others. 

DeWine called it a get-to-know-you meeting along with discussions on the negotiations between the state and Intel over the project. This was the biggest group that Intel had brought to Ohio to date.

"They had to feel we could deliver as we went forward ... they had to have the assurance we have the ability to move forward," he said.

Intel was particularly interested in DeWine's H2Ohio program that began in 2019 with the goal of providing clean and safe water to all Ohio communities. Intel also talked about its interest in hiring veterans.

"We had a discussion about a lot of different things," DeWine said. "This is a kind of them getting to know personally the governor, the lieutenant governor; kind of getting-to-know where we are taking the state."

After the meeting ended, the group talked about the history of the room and some of the art displayed. One guest commented on how much he loved history, Mrs. DeWine said.

She said she suggested a tour of the governor's office, including the story about what, at times, is called the Lincoln Desk where the governor signs most legislation.

Mike DeWine, Ohio Governor
They had to feel we could deliver as we went forward ... they had to have the assurance we have the ability to move forward."

The governor's office is virtually the same as it was in 1861 when Abraham Lincoln sat at the desk across from then Gov. William Dennison Jr. and discussed the impending Civil War. He also found out during this visit that he'd won the presidential election.

Gov. George Voinovich was the first governor to use the office after the Statehouse restoration was completed in 1996. Inside the desk is a drawer where Govs. George Voinovich, Nancy Hollister, Bob Taft and Ted Strickland have signed their names at the end of their terms.

 "I showed them the desk. I went in and told the story about the desk. I opened the drawer and showed them where different governors have signed their name," DeWine said.

"They were asking a lot of tough questions about whether we could deliver all the things we were talking about doing," Husted said. "They wanted to look us in the eye (and ask), 'Do we believe this Ohio team can really do this?'"

"We all left that meeting that day, thinking ‘Wow, we can win this,'" Husted said.

The state had gone from being a longshot to now hosting a big contingency of Intel staff.

"If they weren't serious, they wouldn't be spending their time," he said.

Jon Husted, Ohio Lt. Governor
We all left that meeting that day, thinking ‘Wow, we can win this.'"

October 19: Site visits 

DeWine hosted Intel and state jobs officials for a breakfast at the governor's residence. Among those at the meeting was Esfarjani, Intel's senior vice president for manufacturing, supply chain and operations along with the top decision makers at the company below the CEO and board. 

"Fran DeWine and Mike DeWine immediately put everybody at ease," Husted said. "This is where they are at their best about making people feel at home."

The first lady coordinated a menu that morning meant to reflect Ohio.

"So we did a version of eggs benedict, except instead of serving a poached eggs over an English muffin with hollandaise sauce, we served it over fried green tomatoes," she said. "We had brought in so many green tomatoes from the residence garden that we thought that would be a good way to highlight our produce. We also served good Ohio bacon and sausage, and lemon ricotta pancakes served with Flying Mouse Farm maple syrup, made by our son John."

DeWine asked Husted to give the prayer before breakfast, as is common when the two are hosting meals.

"Thank you for the opportunity to gather," he said. "We welcome our special guests. We hope they will have a wonderful visit in Ohio.’’

After everyone said "Amen," Husted added, "See, we’ll even appeal to divine intervention in this deal," as everyone laughed.

The visit included a stop at the tour site on what turned out to be a picture-perfect fall day for Ohio: Cloudless and 72 degrees.

Jon Husted
Brooke LaValley/Columbus Dispatch
Brooke LaValley/Columbus Dispatch

"We made them feel very confident that we were going to be honest, that we were no drama, that folks from Ohio work hard. They value manufacturing. That we understood this is an American play for economic and national security and that people of Ohio would embrace those values," Husted said. 

Husted said state officials believed going into the meeting that Esfarjani was going to be the tough sell. 

"By the end of the meeting, he was talking about, 'Well, could you get more land, could you do more things, if we decided ultimately to go bigger,'" Husted said. "At this point in time, we were like wow, this is exciting."

On Oct. 29, a team from Ohio traveled to Arizona to see Intel operations there, to learn more about how Intel works, how the site is laid out and how Intel recycles water.

November: The Chips Act 

State leaders began to more aggressively lobby the Ohio congressional delegation to fund the CHIPS for America Act that was enacted as part of the annual defense bill passed in early 2021.  

Last June, the Senate passed the United States Innovation and Competition Act that includes $52 billion in funding for the semiconductor research, design and manufacturing provisions of the CHIPS bill that had been previously passed, but the House has yet to consider the bill. 

State officials were becoming more confident that Intel would pick Ohio for the site of the project, but they also knew that funding the CHIPS Act was important for the project and the speed in which it could be developed. 

They even engaged with House Republican Leader Kevin McCarthy of California when he was in town that month. 

By Thanksgiving, state officials anticipated they would win the project, but it they were still trying to grasp the size and scope. 

"We're going to win, but still not knowing what that meant with the CHIPS Act out there still undone," Husted he said.

Dec. 7: A preferred choice 

DeWine, Husted and other officials received a call from Intel CEO Gelsinger. 

"He told us Ohio is the preferred site and we're getting close," DeWine said.

On Dec. 10, Gelsinger had another call with DeWine and Husted as the state continued to hash out details over the deal. 

By this point, Husted said Intel executives around the world were involved in the talks, which were going on 24 hours a day. 

Jon Husted, Ohio Lt. Governor
This is greatest professional gift that I could ever achieve. I remember turning to my wife and saying, 'Ohio won.' This is an historical economic achievement."

With the holidays approaching, all involved were pushing to get the deal wrapped up quickly, and Husted said JobsOhio staff were working on multiple details.

"It was going on around the clock because some of Intel's people were around the world," he said. "We had some of them on calls at 3 a.m. It was crazy how much back and forth was going on. You could just see with the holidays coming on, everyone was exhausted on all sides. Everybody was so professional and committed to help each other understand what could be done and what couldn't be done."  

The city of New Albany has started the process of annexing as much as 3,190 acres from Jersey Township in Licking County.
The city of New Albany has started the process of annexing as much as 3,190 acres from Jersey Township in Licking County. City of New Albany

On Dec. 23, DeWine, Husted and other officials received another call from Gelsinger as state officials worked through Christmas Eve to conclude the project. 

Then on Christmas, DeWine and Husted received letters from Gelsinger confirming that Intel would move ahead (there was no timetable yet for construction). DeWine said he's proud Ohio will be part of the solution to the chip shortage, which he called a matter of national security. 

Husted said he opened his letter as his wife was making Christmas dinner. 

"This is greatest professional gift that I could ever achieve,'' he said. "I remember turning to my wife and saying, 'Ohio won.' This is an historical economic achievement." 

 mawilliams@dispatch.com 

@BizMarkWilliams 

Photo and video credits: Doral Chenoweth/ Columbus Dispatch; Tim Herman/Intel;  Corp.; Liz Dufour/The Enquirer; Adam Cairns/Columbus Dispatch; Patrick Semansky, AP

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