What's at stake?
Fresno is offering incentives to draw semiconductor manufacturing companies and higher-paying jobs to the city. But questions remain as to where the manufacturing facilities will be located and whether the companies will hire local.
Top government officials are trying to make the U.S. a bigger contender in the microchip manufacturing game – and Fresno’s taking steps to make sure they get a piece of the pie.
A new local measure will be a key part of that. Called the Fresno CHIPS Incentive Program, the legislation promises tax incentives to semiconductor manufacturing companies that set up shop in Fresno.
It already appears to be putting Fresno on the map in the world of microchip makers.
Weeks after the city council passed the local incentive, the Fresno County Economic Development Corporation announced Wyoming-based semiconductor company Tynergy would be relocating to Fresno, thanks to a $15 million California Competes Tax Credit from the state.
With Tynergy’s promise to create 500 jobs in Fresno with a $70,000 starting salary, city leaders say this is exactly the kind of opportunity they’re trying to attract to the city.
“We’re excited about Tynergy,” said Councilmember Nelson Esparza, who sponsored the Fresno CHIPS Incentive resolution, “(and) excited about … opportunities to bring other companies here and raise the standard of what we’re accustomed to here in terms of wages.”
Will Oliver, president and CEO of the Fresno County EDC, said in an email that Tynergy’s move “signifies the potential for Fresno to serve as a strategic location for companies endeavoring to take part of the semiconductor supply chain.”
Some questions remain, however, including where manufacturing facilities like Tynergy’s will be located and whether the manufacturing jobs will be filled by local workers.
The city’s response to those questions could dictate how much the program ends up benefitting Fresno workers and the local economy.
“I want to make sure that I could train workers for such a facility or that I have workers for such a facility,” said Tim Bartik, a senior economist with the W.E. Upjohn Institute for Employment Research, “because economic development is not really a policy that’s trying to make money for the government. It’s a policy that’s trying to improve the labor market for workers.”
Fresnoland made multiple attempts to contact Tynergy leaders for comment.
Microchip maker Tynergy to offer above-average salary and other benefits
The $70,000 starting salary Tynergy will offer is above Fresno’s median household income of approximately $63,000, measured in 2022 dollars, by the U.S. Census Bureau.
The jobs also come with other lucrative benefits like childcare for all employees, according to the EDC.
It’s unclear, however, whether the 500 jobs Tynergy is bringing to Fresno will go primarily to local residents.
The EDC didn’t respond to a question whether Tynergy planned to bring employees with them from Wyoming.
The Cal Competes grant agreement requires “at least 75% of its net increase of full-time employees will work at least 75% of the time in Fresno” without specifying whether these employees should be local hires.
In the average local economy, Bartik said, “about 20% of the jobs end up raising the employment rate,” while the rest are filled by domestic migrants.
However, “Fresno is not an average local economy,” he added, with its unemployment rate of roughly 7% according to October 2023 U.S. Bureau of Labor Statistics figures, compared with a national rate of roughly 4% during the same period.
“When the local employment rate is repressed, you would expect that new jobs would tend to go to the unemployed,” he said.
But that raises another question about whether local folks will be prepared for semiconductor manufacturing jobs.
The training component is mentioned in the Fresno CHIPS Incentive.
Applicants must “commit to appropriate investments to recruit, train, hire, retain, and upskill a diverse workforce at its facility,” according to the city council resolution.
This goes hand-in-hand with the requirements of the federal CHIPS incentive, which requires companies that receive funding to plan out how to develop “a highly skilled, diverse workforce consisting of both construction workers and facility equipment operators,” according to Oliver.
Where will Fresno’s microchip manufacturing facilities will be located?
The EDC said a site hasn’t been confirmed yet for Tynergy’s facilities.
This is another important question that could impact the success of the incentive program, according to Bartik.
“Do I have the land available for it that would be zoned for such a plant, and can I assure a facility that they wouldn’t have to do five years of environmental impact statements before getting into production?” he said.
The expansion of warehouse and manufacturing jobs in south central Fresno specifically has raised concerns among citizens, some of whom took legal action to protect the neighborhood from pollution.
In Taiwan, home to the world’s largest microchip manufacturing company, the industry’s water usage caused tensions between farmers and manufacturers in 2021 during a severe drought year.
Neither the EDC nor Esparza responded to questions regarding environmental concerns with semiconductor manufacturing and how the city is preparing for that.
Among the requirements for Fresno’s CHIPS incentive is one asking the applicants to “adopt sustainability measures to mitigate the project’s greenhouse gas emissions.”
In the EDC’s announcement about Tynergy, they stated that Tynergy’s patented technology “help alleviate the state’s grid demands and energy shortages.”
