Schumer Wields Political Heft in Bid for New York Chips Funds

on Aug6
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In a darkened hotel ballroom in San Jose, Calif., last November, the most powerful players in the semiconductor industry received a familiar sales pitch.

Senator Chuck Schumer, the majority leader, appeared by video message to urge the industry titans at the Semiconductor Industry Association’s annual awards dinner to work together to strengthen American manufacturing of a critical technology — and to invest more in his home state of New York.

“I ask that more of the industry consider investing in the Empire State, and if you do, you’ll find no greater champion in your corner than me, the Senate majority leader,” Mr. Schumer said, to cheers and laughs of recognition from a crowd accustomed to the senator’s solicitations.

Amid growing fears about China’s dominance of technology and America’s loss of competitiveness, Mr. Schumer last year helped rally Congress to push through the biggest industrial policy programs the United States has seen in a generation. The Biden administration is now preparing to invest tens of billions of dollars in the U.S. semiconductor industry in an effort to boost chip manufacturing across the country and lessen U.S. reliance on foreign factories.

If Mr. Schumer gets his way, a substantial part of that funding will flow to New York.

In his encounters with chip executives, Commerce Secretary Gina Raimondo and President Biden himself, Mr. Schumer has openly and aggressively drawn on his political capital as majority leader to try to channel investment to his home state. During the months where Congress was debating whether to approve that funding, industry executives who set foot in Mr. Schumer’s office or spoke to him on the flip phone he carries in his breast pocket were asked when, not if, they would invest in New York.

Mr. Schumer, a longtime China critic, primarily views the investments as critical to reducing America’s reliance on Beijing for a technology that powers everything from cars and dishwashers to missiles and fighter jets. Most chip production has moved to Asia in recent decades, leaving the U.S. economy highly vulnerable to shortages, as became apparent during the pandemic.

But he also saw the opportunity to fulfill a more personal goal: securing investment that could revive the factory towns of his home state, which had been hollowed out through decades of competition with China. The move would also augment his local political support, attract donations from chip companies to fill Democratic coffers and cement his legacy as a proponent of upstate New York.

“I cared about upstate and I cared about competition with China,” Mr. Schumer said in an interview in Albany in June. “When I drafted the legislation, I did things with New York companies in mind.”

Senate majority leaders and other legislators have long used their clout to drive federal funds back home. But Mr. Schumer is capitalizing on his position at an opportune moment, as the United States prepares to invest nearly $53 billion in the sector, including $11 billion for chip research and $39 billion in manufacturing grants.

Still, some critics have cautioned that economic and strategic factors, not political influence, must determine the investment decisions that could shape the U.S. economy for decades to come.

New York has five main advantages, he told executives: Skilled workers, stemming from New York’s history of manufacturing. Cheap and plentiful water. Cheap hydropower. Shovel-ready sites for companies to build on.

Mr. Schumer said he had personally made that case to a parade of administration officials he brought through the state. That included Mr. Biden, who was pitched on New York’s potential as the two men rode in a motorcade to hear Micron’s investment announcement last October.

By his telling, Mr. Schumer’s efforts on behalf of upstate New York are a personal mission, stemming in part from an early challenge from a political opponent who told voters they would never see Mr. Schumer, a Brooklyn native, west of the Hudson River. As Mr. Schumer watched companies like General Motors, General Electric and Carrier shutter their New York facilities, he said, he vowed to do something to stop the flow of young people out of the state.

Mr. Schumer had also been one of Congress’ earliest China hawks, particularly on the issue of Chinese currency manipulation. During a workout in 2019 in the Senate gym, Mr. Schumer began forming a plan with Senator Todd Young, Republican of Indiana, to bolster the U.S. economy by dedicating over $100 billion to technology research.

It took two years — and an aggressive, coordinated lobbying effort between government and industry — to amass the support and momentum to turn that bill into law. Mr. Schumer and other key Republican and Democratic lawmakers enlisted company executives, university presidents and state officials to talk publicly about the importance of the funding, and put pressure on reluctant members of Congress.

Mr. Schumer also worked closely with Ms. Raimondo to push the bill forward. He called her frequently as obstacles arose, including during Sunday Mass and her daughter’s 18th birthday party, she said in an interview in July 2022.

New York played host to a series of chip companies considering potential investments, particularly for the plot that Micron now plans to build on. TSMC looked at the site in 2019 before it chose Arizona, and Intel considered the same location but ultimately chose Ohio.

Micron was ready to write off New York because the state did not have a big enough site, Ryan McMahon, the local county executive, said. To win the final bid, the county spent tens of millions of dollars acquiring land, including buying out a street of homeowners, and running gas and electricity to the site, he said.

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