Written by: Stan Puszcz, CP President & CEO
Last month, I was honored to join eight fellow business leaders and CEOs of New Jersey companies to speak to state legislators during a meeting of the NJ Legislative Manufacturing Caucus at the State House in Trenton. On invitation from John W. Kennedy, Ph.D., former CEO of NJMEP and now senior advisor to the CEO of the New Jersey Economic Development Authority (NJEDA), our purpose was to educate our legislators on the status of manufacturing in the state – the market, the process, and the facilities. We also discussed the CHIPS and Science Act, federal legislation signed into law in 2022, as well as how industry leaders are coming together in NJ to strengthen manufacturing in the state and what the legislation’s potential infusion of funds could mean.
What is the CHIPS and Science Act?
The CHIPS Act, Creating Helpful Incentives to Produce Semiconductors, and Science Act (CHIPS Act) is bipartisan legislation that aims to strengthen American manufacturing, supply chains, and national security, as well as invest in research and development, science and technology, and the workforce. It’s part of the Biden Administration’s efforts to revive manufacturing, create jobs, and bolster supply chains in the US to help avoid future supply chain disruptions like we experienced during and in the aftermath of the COVID-19 global pandemic.
Even though the semiconductor was invented in the US (in NJ in fact), only about 10% of the world’s supply of semiconductor chips are produced here. Seventy-five percent of global production happens in East Asia.(1) We use semiconductor chips in many things – phones, vehicles, medical devices, and consumer products, and analysts predict that we could soon experience a worldwide shortage.
Specifically, the CHIPS Act provides $52.7 billion for American semiconductor research, development, manufacturing, and workforce development. This includes:
It’s important to note that while there are many funding opportunities available, the CHIPS Act isn’t just a windfall of federal funding. It requires public and private sectors to work together and invest to ensure the success of the effort. According to the White House, in the days following final passage of the bill, companies announced nearly $50 billion in additional investments in semiconductor manufacturing in the US.(1) Manufacturing construction and private sector investment in semiconductor manufacturing has also increased in New Jersey since the legislation became law. The bill also requires that funding recipients demonstrate significant worker and community investments, including opportunities for small businesses and disadvantaged communities to support equitable economic growth and development.
What Does This Mean for New Jersey?
You may be wondering why an engineering, architecture, and environmental services firm is interested in legislation that promotes domestic semiconductor production. We don’t manufacture, modify, or test chips or the equipment that does. But we do work hand-in-hand with companies who are looking to build or renovate their facilities to do so, as well as help them navigate the environmental and regulatory challenges they may face along the way. But outside of those benefits, though indirect, we are excited about this legislation for what it brings to New Jersey.
It Reaffirms NJ’s role as a manufacturing state.
There’s a prevailing, yet inaccurate, perspective in the state that manufacturing has been on the decline. And while it’s true that some types of manufacturing have declined, it was more than offset by the highly skilled talent developing advanced products. According to the National Association of Manufacturers, NJ has over 340,000 people working throughout the state for more than 10,000+ manufacturers. The industry adds $62.9 billion to the state’s economy and exported $40.1 billion worth of goods in 2022.(2) Manufacturing is thriving in NJ, and there is a multitude of semiconductor development and production facilities in the state.
It enhances NJ’s strengths.
Semiconductors are integral to military and defense resources and operations. With Picatinny Arsenal, the Joint Base McGuire-Dix-Lakehurst, Earle Naval Weapons Station, and the FAA Tech Center NJ is a strong candidate for CHIPS Act funding. With added federal funding, as John Kennedy correctly points out, our state is poised to support these facilities, strengthening their ability to be on the cutting edge, bolstering our military, security, and the industry as a whole.
We also have incredible research educational institutions, including Princeton, Rutgers, and NJIT, just to name a few, that are doing incredible work in this area and have developed strong partnerships with the private sector that will stand as a solid foundation for the cooperation required to receive CHIPS Act funding.
It supports the overall vitality and success of the state.
The manufacturing sector offers New Jerseyans good-paying jobs with abounding opportunity –according to Kennedy, it is estimated that New Jersey currently has 40,000 open jobs in the manufacturing sector. To fill those positions, we need talented engineers and technicians. CHIPS Act investments in STEM education and workforce development can help us get more young people interested in the field, give them a good education, and keep them in our state. This is an area that CP has focused on throughout our existence, creating partnerships and internships in the communities where we work. And with our elite educational institutions, we are set up for success.
What’s Next?
While we know that New Jersey is a strong candidate for CHIPS Act Funding, we also know states all over the country are competing for the same pot. To ensure we receive a piece of the pie, we must make a strong case. That’s why we’re participating in this public and private partnership to help produce a plan to showcase the success that will come out of New Jersey with the help of federal funding that will not only benefit the state, but the whole country.
While the effort is in the early stages, we are honored John Kennedy, and the NJEDA CHIPS Task Team values our perspective and proud to be a part of the solution.
(2) https://nam.org/manufacturing-in-the-united-states/regions/new-jersey/
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