The Lehigh Valley could soon have a new moniker if the Lehigh Valley Economic Development Corp. has its way.
The organization in charge of bringing business to the Valley has submitted an application to the U.S. Economic Development Administration for a Tech Hub designation. Tech Hubs — officially termed Regional Technology and Innovation Hubs — were created by the CHIPS and Science Act of 2022 to supercharge innovation areas for technologies that are essential to economic and national security. The original tech hub legislation was introduced in 2021 by U.S. Rep. Susan Wild as the Regional Innovation Act.
The statute authorized $10 billion for the program over five years. Congress appropriated the EDA $500 million to launch the program.
“When we introduced the Regional Innovation Act, it was written for the country but I absolutely had to believe that the Lehigh Valley was the perfect location for the kind of investment that a tech hub is designed to make,” said Wild, D-7th District.
The LVEDC said Tuesday that being picked as a tech hub could boost and expand the region’s semiconductor and related industries and help strengthen the supply chain for a critical sector to national economic and security interests.
“The history of the Lehigh Valley is very rich but one aspect that few realize is the role this region has played in the birth and development of the technology and semiconductor industry,” said Don Cunningham, president and CEO of LVEDC.
The Lehigh Valley is seeking to be designated as a Tech Hub for semiconductors, in particular where their production overlaps with advanced manufacturing and advanced materials sciences. A designation could qualify the region for $50 million to $75 million in CHIPS Act funding to grow the industry so it can contribute to providing a secure, domestic supply of components for current and future communications technologies.
First phase
According to the EDA, it will designate at least 20 tech hubs across the country, including at least three in the Northeast, and will separately award approximately $15 million in strategy development grants. A second phase will then have the EDA making at least five additional awards to designated hubs.
Wild said the next step will come at the end of the year or in early 2024.
“It’s a highly competitive process and everybody’s applications were due Aug. 15,” she said. “The second step will require refinement of applications for those people who make it to the qualifying round. It is anticipated, by this time next year, we will know where those first hubs will be.”
Wild said the idea is to help bring manufacturing back to the U.S., and spread it across the country.
“We are doing this country a disservice when we only have a few select areas that are creating the kinds of tech that literally makes the world go round,” she said. “The original genesis of this act was to spread the wealth. Let’s not just have Silicon Valley or Austin, Texas, or the North Carolina Triangle, but let’s create hubs all over the country.”
Another factor was the COVID pandemic, which created havoc with supply chains. Chip manufacturers in China were especially affected and there was a worldwide shortage of products that used them such as new cars and appliances.
“When [COVID] all first started, the average American wasn’t talking about semiconductors or chips, and now it’s kind of part of everybody’s vocabulary,” Wild said.
It also revealed how dependent the U.S. is on foreign chip manufacturers
“What it all came down to was we were completely reliant on foreign sources for these very, very important semiconductors,” Wild said. “It was not exclusively, but largely, China, and we were at their mercy. This bill evolved because of what we saw in terms of supply chain issues.”
Technological history
Cunningham said the Valley has been producing technology for decades. Western Electric began the nation’s first mass production of transistors in 1951 at its Allentown plant on Union Boulevard.
“We were the first Silicon Valley and still have many of the country’s leading technology firms — and some great new ones — thriving here,” Cunningham said. “Companies in the Lehigh Valley touch nearly every element of semiconductor development. The Lehigh Valley is part of the nation’s semiconductor history and its present. With this federal government designation, the Lehigh Valley will help the U.S. to once again lead the world in all aspects of technology.”
Companies participating in the consortium seeking the designation include AAYUNA, Broadcom, Cisco, Coherent, Infinera, iDEAL Semiconductor, Intel, Air Products, EMD Electronics, LBN and Evonik, along with labor, educational and economic organizations.
“It was a huge collaborative effort that I think exemplifies what the Lehigh Valley is all about,” Wild said. “We’ve seen it in all different kinds of areas where private/public partnerships and our economic development sector and our labor force and everybody else are able to come together to solve problems and this is, I think, the premier example of that.”
