On Monday, IQE Inc. announced the expansion of its manufacturing plant in Greensboro, which provides compound semiconductor manufacturing services with a global customer base in the burgeoning technology space. The company plans to create 109 jobs and invest $309 million over several years in the expansion, partially funded by federal dollars through the CHIPS Act.
The federal grant, loan, and tax incentive program, passed under the Biden administration, has spent billions in federal tax dollars in an attempt to spur more robust domestic supply chains in the strategically important semiconductor industry. Questions of the two year old Act’s success or failure remain as some of it’s largest focal points languish.
North Carolina has attracted further private investment in the space due to the state’s unique ingredients of educated labor and a business-friendly legislative environment.
“North Carolina is a manufacturing powerhouse at the intersection of innovation and legacy,” said Gov. Cooper in a press release. “IQE’s major reinvestment in Guilford County is a testament to the quality of our world-class workforce, the strength of our business climate, and our leadership in clean energy and technology.”
IQE Inc. employs 72 individuals and has operated in Greensboro for over a decade. The company manufactures epi wafers using a process called molecular beam epitaxy, serving the defense and aerospace industries. The planned expansion potential investmen will add a new, complementary process called metal-organic chemical vapor deposition (MOCVD) which executives say will provide a clean technology for semiconductor chip production to help serve the electric vehicle market.
“Greensboro has proven to be a strategic location for IQE and has provided access to exceptional talent,” Jutta Meier, Interim CEO of IQE, said in a press release. “We look forward to continuing our partnership with the city as we progress further with our application for Government funding via the CHIPS Act, which, along with funding commitments from the State, will provide us with the capital to invest and expand our local footprint.”
Salaries will vary depending on position but will average close to $65,908 annually, more than $7,000 higher than the average salary in Guilford County of $58,843. The new jobs are estimated to eventually make an annual payroll impact of more than $7 million in the region.
“North Carolina has more than 110 companies exporting $1.2 billion of semiconductors and microelectronics around the world,” NC Commerce Secretary Machelle Baker Sanders said in a press release. “As one of the top states to do business, this expansion validates our reputation for the best talent and research partnerships that continue to attract and retain advanced manufacturers like IQE.”
One North Carolina Fund will provide a $275,000 grant to facilitate the expansion. Unlike the Job Development Investment Grant, this is a performance-based grant. Companies do not receive money upfront and must meet job creation and capital investment targets to qualify for receipt of funding.
One NC Fund uses taxpayer money to assist local governments in attracting economic development investments. The local government and payment must match all grants from One NC Fund, which is contingent on meeting the designated job and impact targets.
Partnering with the North Carolina Department of Commerce and the Economic Development Partnership of North Carolina on this project were the North Carolina General Assembly, the Commerce Department’s Division of Workforce Solutions, the North Carolina Community College System, Guilford Technical Community College, GuilfordWorks, the City of Greensboro, Guilford County, the Guilford County Economic Development Alliance, the Greensboro Chamber of Commerce and Duke Energy.
Despite the program’s popularity among government officials and entities, critics point to the downsides of targeted favoritism versus uniform policy reforms to lower tax and investment burdens for North Carolina business owners large and small.
“Once again, the Cooper administration shows its hypocrisy,” Brian Balfour, VP of Research at the John Locke Foundation, told the Carolina Journal. “For years, Gov. Cooper has railed against the evils of lowering corporate taxes across the board, all the while offering targeted tax breaks to specific corporations. This latest corporate welfare giveaway not only comes at state taxpayers’ expense but will also require payments from Guilford County taxpayers as well. This type of corporate favoritism is unfair to all taxpayers and businesses not receiving the favors while inviting corruption as big government and big business get in bed together at taxpayer expense.”