Officials with the Orange County Partnership report that two key sectors it will focus on for new investment are the high-technology and clean energy-related industries.
With New York State embracing clean/green technology to power its energy needs in the future, the Orange County Partnership has seen increased interest from solar component, clean battery technology and offshore wind component parts manufacturers in establishing operations in the county.
Incentives from the federal Investment Reduction Act and the CHIPS and Science Act are spurring investment in the clean energy and high-tech sectors respectively across the nation.
“Despite economic headwinds, the high-tech, clean energy sectors are generating billions of dollars in sales and are experiencing significant growth paths,” said Orange County Partnership President and CEO Maureen Halahan. “Spurred by federal legislation that incentivizes investment, major companies such as Micron, IBM and others are committing billions of dollars for expansion programs and Orange County offers distinct advantages to host new high-tech and clean energy facility initiatives.”
Deloitte USA released recently its “2023 Renewable Energy Industry Outlook” that noted that the U.S. renewable energy growth slowed in 2022 due to rising costs, supply chain disruption, uncertainty over trade policy, increased interest rates and other factors.
While these challenges still exist in 2023, Deloitte analysts predicted that growth will likely accelerate, powered by robust demand and the record-breaking number of clean energy incentives in the Inflation Reduction Act. In fact, the report stated that the renewable energy industry “is ready for takeoff.”
“Growing demand in 2023 could exacerbate supply chain constraints and interconnection bottlenecks, further boosting prices and extending project timelines. Also, transmission limitations could continue to hamper growth until capacity is significantly expanded,” the report stated. “However, the evolving trends and opportunities that follow could help the industry navigate headwinds as it grows in 2023 and set the stage for faster growth in 2024.”
Recent reports and analysis of the semiconductor sector only provides more evidence of this sector’s potential economic impact for Orange County.
On April 12, The Semiconductor Industry Association reported that worldwide sales of semiconductor manufacturing equipment increased 5% from $102.6 billion in 2021 to an all-time record of $107.6 billion in 2022.
For the third consecutive year, China remained the largest semiconductor equipment market in 2022 despite a 5% slowdown in the pace of investments in the region year-over-year, accounting for $28.3 billion in billings. Taiwan, the second-largest destination for equipment spending, recorded an increase of 8% to $26.8 billion, marking the fourth straight year of growth for the region. Equipment sales to Korea contracted 14% to $21.5 billion. Annual semiconductor equipment investments in Europe surged 93%, while North America logged a 38% increase. Sales to the rest of the world and Japan increased 34% and 7% year over year, respectively.
“The record high for semiconductor manufacturing equipment sales in 2022 stems from the industry’s drive to add the fab capacity required to support long-term growth and innovations in key end markets including high-performance computing and automotive,” said Ajit Manocha, SEMI president and CEO. “Additionally, the results reflect investments and determination across regions to avoid future semiconductor supply chain constraints like those that surfaced during the pandemic.”
Global sales of wafer processing equipment rose 8% in 2022, while other front-end segment billings grew 11%. After robust growth in 2021, assembly and packaging equipment sales decreased 19% last year while total test equipment billings contracted 4% year over year.
The SIA recently announced global semiconductor industry sales totaled $39.7 billion during the month of February 2023, a decrease of 4.0% compared to the January 2023 total of $41.3 billion and 20.7% less than the February 2022 total of $50.0 billion.
“Global semiconductor sales continued to slow in February, decreasing year-to-year and month-to-month for the sixth consecutive month,” said John Neuffer, SIA president and CEO. “Short-term market cyclicality and macroeconomic headwinds have led to cooling sales, but the market’s medium- and long-term prospects remain bright, thanks to growing demand across a range of end markets.”
Regionally, year-to-year sales increased slightly in February in Japan (1.2%), but decreased in Europe (-0.9%), the Americas (-14.8%), Asia Pacific/All Other (-22.1%), and China (-34.2%). Month-to-month sales were down across all regions: Europe (-0.3%), Japan (-0.3%), Asia Pacific/All Other (-3.6%), the Americas (-5.3%), and China (-5.9%).
The SIA noted that since the CHIPS Act was introduced in the spring of 2020 through the months following its enactment in August 2022, companies in the semiconductor ecosystem announced dozens of projects to increase manufacturing capacity in the U.S.
As of March 2023, some highlights of announcements spurred by the CHIPS and Science Act include:
· More than $210 billion in new private investments has been announced across 19 states to increase domestic manufacturing capacity.
· More than 50 new semiconductor ecosystem projects were announced across the U.S., including the construction of new fabs, expansions of existing sites, and facilities that supply the materials and equipment used in chip manufacturing.
· A total of 44,000 new high-quality jobs were announced in the semiconductor ecosystem as part of the new projects, which will support many more jobs throughout the broader U.S. economy, the SIA reported.
