Starting New Site Startups: The Challenges of Intra-State Group Mobility – A Corporate Relocation PerspectiveSharon Richards - May 17 2023
Now is the time for mobility specialists to prepare in order to respond immediately and effectively to the upcoming needs and demands of the semiconductor industry.
With the passage of the Chips and Science Act 52B bill and the call for the return of semiconductor manufacturing to U.S. soil and the electric vehicle mandate goals, America’s electronic industries will be expanding their existing facilities as well as building new greenfield sites.
This newly approved CHIPS Act will pump $52 billion into U.S. “chip”-based factories called fabs that make semiconductors. Manufacturers have eagerly seized the benefits of this new legislation and already have announced expansion and new site growth plans.
Five major chip makers—Global Foundries, Intel, Samsung, TSMC, and Texas Instruments—are building new semiconductor facilities in the U.S.
- Intel will be spending over $40 billion to bring up four U.S. plants that will come online in three years—two in Arizona and two in Ohio.
- TSMC, the world’s largest contract chipmaker, which has only built two fabs outside of Taiwan, has announced intention to build a fab in Arizona.
- Global Foundries has said it would build an all new fab in Malta, New York, utilizing financial support from the U.S. government provided under the CHIPS Act to build and equip the new fab in New York quickly.
- Samsung has announced plans to build an all new fab near Taylor, Texas, with future plans to expand through 2042.
- Texas Instruments launched a massive new plant in Sherman, Texas, which will be built up in four phases with the first fab coming up in 2025.
Not only will these major corporations drive corporate mobility, but there will be a ripple-down effect to food chain suppliers and ancillary services also needing relocation services.
Additionally, Elon Musk plans to develop a utopia like new town near Austin, Texas, to provide more affordable housing close to the booming manufacturing sites.
This upcoming movement creates broad and wide-reaching challenges for corporations and service providers who support their needs. Now is the time for mobility specialists to prepare in order to respond immediately and effectively to these upcoming needs and demands of the semiconductor industry. They need to be proactive rather than reactive if they wish to take advantage of the oncoming tsunami of corporate mobility opportunities.
In order to seize these opportunities, relocation professionals need to move from a mindset of individual real estate transactions to an understanding of corporate business strategy and how their skills and expertise can support corporate objectives and goals.
Although target goals seem years ahead, time is of essence in planning and execution. Given the myriad tasks that need to be accomplished, the following issues will need to be addressed and resolved both internally and with external support suppliers, services, and resources.
- Site selection or expansion development
- Manufacturing construction
- Employee recruitment and staffing
- Development of technical training instruction and certification programs
- New employee onboarding training and technical specific training
- Employee relocation including senior management, key critical managers, and new-hire employees for new startup sites
- Reverse relocation for expat employees and their families returning to U.S. soil due to workforce reduction and redistribution
Other key considerations:
- State and local (political) laws and political perspectives (e.g., health and abortion laws) of resident states
- While cost of housing at new startup sites may be less, scarcity of inventory and rising mortgage rates may impact purchasing power
- Unionization of workforce policies and practices
- Return of expats will require corporations to develop new relocation policies for the specific situation
- Corporations will need to get the commitment of some 20% of existing employees to move from the existing site to new site to ensure smooth manufacturing transition
- The requirement for providing childcare benefits in order to obtain federal funding
Service providers and suppliers who will be challenged to meet corporate startup needs:
- Construction planners, developers, and suppliers
- Recruitment and staffing services and expertise
- Academic institutions/organizations developing technical training external and internal training programs
- Corporate mobility relocation services including area orientation, home finding/temporary living and real estate home purchase capabilities
- Relocation policy benefits development including third party home sale assistance, if necessitated
- Employee orientation and onboarding services, if outsourced
Like interlocking gears, it is essential that these activities and services are implemented in an integrated and timely, well-coordinated manner. The challenge for corporations launching new site startups is in project management and identifying competent/capable service providers as partners in this formidable task.
The challenge for service providers is to seize these opportunities with creativity, flexibility, competence, and a commitment to shared partnership with the corporation and other co-operating service providers.
Rarely is there such an opportunity for mobility specialists and professionals with this call for new U.S. site startups and expansions presented to the mobility industry.
Knowing the quality and capabilities of the Worldwide ERC® community, they will, no doubt, rise up to the occasion and enable this strategic U.S. initiative to be successfully implemented.