Klobuchar, executives pledge expansions to Twin Cities tech factories

The lobbying of Congress to pass a law for government grants to the nation's high-tech manufacturers is over. Now, the line is forming to get the grants.

Leaders of three Minnesota tech manufacturing companies joined U.S. Sen. Amy Klobuchar on Tuesday to celebrate passage of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, which President Joe Biden signed into law last week.

In an event at SkyWater Technology, Minnesota's largest chip factory, the executives said they all expect to pursue grants that will help pay for expansions and new hiring.

Klobuchar noted that the semiconductor makers are spread across the country. "But we've got to make sure when this money goes out that it goes out to places like Minnesota, Ohio and Indiana … that it reaches the heartland," she said.

Tom Sonderman, chief executive of SkyWater, repeated earlier statements that the federal funds will speed some of its capital projects. The company's fab in Bloomington employs about 600 people, and it has smaller research facilities in Florida and Indiana.

Data-storage firm Seagate Technology, which employs 2,100 in Bloomington at its largest U.S. plant, also will seek to tap the funds for future growth. The company earlier this year began expanding the plant, where it makes data storage drives and components.

"We look forward to continuing and deepening that relationship both through the initial phase of fab expansion that's going on just down the street, and hopefully through future additional investments that the CHIPS Act can bring to the United States and, specifically, Minnesota," Jeff Nygaard, Seagate's operations and technology chief, said at the event.

Cody Harlow, chief operating officer at Onto Innovation, said a tax credit for chip manufacturers would likely encourage more spending at firms like his, which provide test measurement devices and other equipment.

"We also hope to take advantage of the tax credit to help fund an expansion at our Bloomington facility, which will bring more good-paying jobs to Minnesota," Harlow said.

The legislation represents a compromise between different measures in the Senate and House that were briefly considered in 2020 but didn't start to get traction in the legislative process until last year.

At one point early this year, the legislation looked in danger of falling apart over competing views on other legislation, including the climate and spending measures that ultimately became the Inflation Reduction Act.

"What we ended up doing was focusing on the most important part, which was the semiconductors as well as the science piece of it," Klobuchar said.

The legislation was one of several measures that came together in the two weeks before Congress' summer recess. "When everyone had counted us out for dead, we came back and got a whole bunch of responsible things done, and so many of them were about bread-and-butter economics," Klobuchar said.

For the tech companies, the attention now turns to the U.S. Commerce Department, which will process grant requests.

"In the pandemic, we realized you can get government money out faster than some people have come to expect," Klobuchar said. "Now we need to focus on getting these semiconductor grants out."