A manufacturing company has canceled plans to invest $150 million in Monroe County, impeding local leaders' efforts to diversify the local economy.
Chicago area-based NHanced Semiconductors announced plans late last year to create 250 local jobs with annual salaries of about $100,000.
On Tuesday, the company’s president, Bob Patti, said project financing had fallen through.
“We are greatly disappointed,” he told the Monroe County Council, which had provided tax breaks for the investments, which one local official called “staggering.”
Patti said the company was not able to secure funding from the federal CHIPS and Science Act, and the enormous investments being made in semiconductors have some investors worried about overproduction.
Patti said governments have put forward about $500 billion globally to boost semiconductor production, possibly beyond demand.
“The private funding at this point is very concerned that the huge investment made worldwide now in semiconductors … may result in a glut in the market,” he said.
Patti had previously said the industry was expanding faster than the rest of the economy in part because the share of things that contain electronic components continues to grow. The industry was boosted further by geopolitical considerations and lessons from the pandemic.
During the COVID-19 pandemic, many U.S. companies struggled to access their usual supply of computer chips — for everything from cars to laptops — because the chips were being made largely overseas, Patti said. In addition, the shortages reinforced federal legislators’ concerns about the brittleness of supply chains and America being dependent on foreign suppliers, especially in geographic areas close to U.S. adversaries.
NHanced had planned to make the investments in Bloomington at 301 N. Curry Pike, the former General Electric site, which NHanced planned to lease from Cook Group. Patti had said the 250 jobs projection was conservative and he expected the plant to have closer to 400 employees by 2029.
'Staggering:'$150M high-tech semiconductor investment coming to Southern Indiana
In addition, he said NHanced was talking with many other companies that expressed an interest in operating in the facility, and he said it was “not inconceivable the site will eventually host as many as 1,000 high-tech jobs.”
Local officials had hoped the plans by NHanced, combined with a recently announced investment of $111 million from Indiana University and related developments near Crane, would help diversify the local economy and set up Bloomington as a hub for research, development and production of components that are critical to the nation’s national security as well as the next generation of consumer technologies.
Jennifer Pearl, president of the Bloomington Economic Development Corp., had said the NHanced project provided an “incredible opportunity” and indicated the “development of an ecosystem here.”
Pearl told council members Tuesday that the project's cancelation was not the news she wanted to present, but business conditions sometimes change, and she also wanted to keep local leaders apprised in the interest of transparency.
She said she was encouraged by NHanced’s plans to continue operations near Crane, and said the company’s interest in the former GE site has reframed how economic development leaders see the property and may help in finding a different tenant.
Boris Ladwig can be reached at bladwig@heraldt.com.
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