Could Fresno be a destination for technological innovation?

City Councilman Nelson Esparza is introducing the CHIPS Incentive Program — set to be discussed at Thursday’s city council meeting. He offered a preview at a Tuesday news conference at City Hall.

Eligible companies would be able to negotiate tax breaks with the city. The goal is to recruit companies that receive federal funding for microchip manufacturing to come to Fresno. The exact amount of how much Fresno would spend was not revealed.

The pandemic exposed a major semiconductor shortage. Congress passed incentive programs in 2022 to increase domestic production. The act provided $53 billion for semiconductor research and development.

“This legislation will provide us the edge that we need to be competitive in this market as the industry begins to grow again here on U.S. soil. And Fresno can lead the way in attracting those companies and the semiconductor supply chain,” Esparza said.

Esparza said Fresno could be the first city to offer incentives. Local or state incentives are required for companies applying for federal dollars.

Incentives, Esparza said, would be tied to the number of jobs created. Fresno will aim at companies looking to invest $20 million to $300 million. Each plant could employ up to 70 people.

Fresno ‘Uniquely Positioned’

Esparza’s proposal has buy-in from the Fresno Economic Development Corporation, Fresno Chamber of Commerce, and the San Joaquin Valley Manufacturing Alliance, all which had representatives at the news conference.

“Fresno was uniquely positioned to take part in this program and legislation,” said Fresno EDC president/CEO Will Oliver.

Oliver cited Fresno’s geographic location in the center of the state; multiple daily flights to Phoenix, where chips manufacturing plants are set to open; and an available workforce.

Fresno EDC was recently awarded a $23 million Good Jobs Challenge grant, which will help with recruiting and training employees.

“The semiconductor industry is really on the cusp of rapid expansion. And Fresno, I believe, is well poised to capitalize on this opportunity. Implementing this incentive has the power to attract new businesses, create high-quality jobs, and foster innovation within our city,” said Genelle Taylor Kumpe, CEO of the manufacturing alliance.

Where Would Plants Go?

The locations for future plants — whether those that produce chips or any parts along the supply chain — are an open question.

“It’s going to depend on ultimately the zoning and exactly what the uses are,” Esparza said.

Esparza Oliver said it would be on a “case-by-case” basis.

Environmental groups have strongly objected to industrial projects, especially in the south side of Fresno.

“Any mitigating measures that we need to take or that are proposed by individuals or groups, I mean, will certainly be taken into consideration. But we’re really taking this one step at a time,” Esparza said.

Oliver did not specify if existing buildings in Fresno could meet the semiconductor industry’s needs.

“The CHIPS Act allows for modernization and renovation of existing buildings, as well as the construction of new facilities. We anticipate the federal funding of that aspect will cover those activities,” Oliver said.