On June 28, Oregon company Rogue Valley Microdevices announced Palm Bay will be the site of its second manufacturing facility. It will be located in an existing commercial space at 2301 Commerce Drive.
The adaptive re-use project will kick off this year once Rogue Valley has selected front-end process tools and support equipment, President and CEO Jessica Gomezsaid. The new factory represents a $25 million capital investment. She also said good-paying jobs are on the way, with some key hires being made in late 2023 and more in 2024.
The company plans to hire 75 employees during the first five years of operation with an average salary of $65,267, along with a comprehensive benefits package including full medical coverage, 401(k) with company match and tuition reimbursement, Gomez said.
She explained that after 25 years of sending jobs like these to other countries, the U.S. government got wise to the economic benefits of manufacturing and packaging microelectronics here in the States. It implemented an industrial strategy to revitalize domestic manufacturing in 2021. Since then, the CHIPS and Science Act went into effect, dedicating over $50 million in taxpayer dollars to support the development of on-shore industry in the space.
While Rogue Valley hasn’t received any grants or direct Department of Defense contracts at this time, Gomez said her firm will apply for CHIPS funding.
Orlando Inno spoke with Gomez to get the story on why Rogue Valley chose Palm Bay and the movement bringing business back to the U.S. — where semiconductors were invented and the industry first took off.
When did you get started in the semiconductor manufacturing industry?
In the late ’90s. It’s been 25 years. I started as a minimum-wage lab operator. It doesn’t feel like a long time when you’re doing the work. At some point, you look back and suddenly realize decades have gone by. Starting the way I did gives me a different perspective as a CEO, and I think it has served our company well over the long term.
Knowing how things work helps with decision-making and can create a competitive edge when it comes to keeping costs down. If you don’t understand the technical piece of it, you can get into the trap of spending money where it doesn’t need to be spent.
What is it about Palm Bay that you’re excited about?
For one, like many of us in the industry, we’ve been struggling with workforce challenges. Many of the really amazing technical people that grew up in this industry are getting closer to retirement, so we were looking for a place where we would have access to a strong workforce of people who have a technical background. It doesn’t just need to be people with semiconductor experience. Look, if you’ve got technical ability and you’re interested in our industry and want to make a career, we want to make that investment in our employees. Brevard County and Palm Bay have the raw ingredients and strong manufacturing base that really appeal to us.
After a multi-year search for the right site, we found it. The tax structure made sense. It’s a business-friendly community. The incentives they offered will help with our CHIPS application.
Also, for us, owning our own facility was very important. We were looking for a region that was not completely landlord controlled. Owning our own real estate helps to keep the operational cost at a minimum.
What are the positives of being in close proximity to the Florida Institute of Technology (FIT)?
One of the challenges of our Oregon location is that we don’t have an engineering school within a reasonable distance. At our company, we really encourage professional development and continuous education. Having FIT in the Palm Bay corridor allows us to collaborate more with higher education. So much leading-edge technology is being developed there. We met some of the students. They are amazing. And the FIT team knows how to work with industry.
Bringing business back: Semiconductor fabrication resurgence
According to the Semiconductor Industry Association, the U.S. share of semiconductor manufacturing decreased from 37% in 1990 to 12% in 2021 — and even more telling, in 2019, 100% of the world’s most advanced logic semiconductors were produced overseas.
“In the ’90s and early 2000s, we had a lot of new technology coming online, and the investment community was really supportive,” Gomez said. “But what ended up happening is that companies started building their own fabrication facilities, and it was very, very expensive. Many of them weren’t successful.
“The investor community started pushing the companies to find off-shore manufacturing partners, and that had a global impact.”
Along the way, Taiwan became the dominant force in the semiconductor industry, producing over 60% of the world’s semiconductors and over 90% of the most advanced ones, increasing American concerns about the island country’s vulnerability to China.
On its website, The White House published this statement:
“The CHIPS and Science Act will boost American semiconductor research, development, and production, ensuring U.S. leadership in the technology that forms the foundation of everything from automobiles to household appliances to defense systems. America invented the semiconductor, but today produces about 10 percent of the world’s supply — and none of the most advanced chips. Instead, we rely on East Asia for 75 percent of global production. The CHIPS and Science Act will unlock hundreds of billions more in private sector semiconductor investment across the country, including production essential to national defense and critical sectors.”
Last year, GlobalFoundries (Nasdaq: GFS), Intel (Nasdaq: INTC), Micron (Nasdaq: MU), Samsung (Nasdaq: SSNLF), Texas Instruments Nasdaq: TXN) and Taiwan Semiconductor Manufacturing Company Limited (Nasdaq: TSM) all announced new semiconductor production facilities in the U.S.
By Sarah Kinbar