Fresno needs high-paying jobs. Pact with semiconductor industry could be the ticket | Opinion

Fresno’s economy cannot thrive on agriculture and distribution centers alone.

The missing component is tech and in particular semiconductors, those tiny integrated circuits (sometimes referred to as “microchips”) that serve as the electronic brains of virtually all modern electronics.

The semiconductor industry directly employs more than 200,000 people in the United States, while also creating several times that many jobs through the multiplier effect.

But so far, practically none of those jobs, or the economic benefits they bring, have found their way to the San Joaquin Valley.

Opinion

Last week, during a semiconductor industry trade show in San Francisco, the cities of Fresno and Clovis, Fresno State and the Fresno County Economic Development Corporation took a significant step toward altering that narrative. Leaders signed a memorandum of understanding between themselves and two key industry players: SEMI, a global semiconductor manufacturing association; and Silicon Farms, an Atherton-based tech consultant group co-managed by a Fresno State alum.

The formal agreement’s goal, according to a media release, is “to leverage the strengths of partners to bring new business and career opportunities to the Fresno region.”

“We need jobs but not just any jobs,” Fresno City Councilmember Nelson Esparza said. “We need jobs that pay a living wage, jobs that raise the median wage in the city and the region. That’s good for everybody. There are people who will never be involved with the semiconductor industry in this city that would benefit from the economic impact.”

Each party has a role to play. The two cities and the Fresno County EDC agreed to support and enhance the development of high-tech business parks. Clovis already has a designated Research and Technology Park along Highway 168, while Fresno (at Esparza’s urging) in 2023 adopted an incentive package designed to lure high-tech businesses built off the federal CHIPS and Science Act.

Fresno State pledged to review curriculum and course offerings at the Lyles College of Engineering to ensure they are aligned with “the needs” of the semiconductor industry. Also to “explore the feasibility” of training programs in support of the effort.

Semiconductor group backs partnership

SEMI, whose membership includes more than 3,000 companies worldwide, agreed to use its network to promote the efforts of both Silicon Farms and Fresno State. Also to endorse Silicon Farms as “viable agents” to promote semiconductor and other high-tech activities in Fresno and Clovis.

Finally, it is up to Silicon Farms (whose co-manager Gary Peacock and his wife Marlene donated $7 million to Fresno State in 2022) to develop a business park suitable for prospective companies.

“It’s been a community effort with both cities and Fresno State pulling together and figuring out what we have to do to be able to compete in this space,” Fresno County EDC President/CEO Will Oliver said. “This collaboration will really position the region to be part of the growing semiconductor industry, driving innovation and job creation.”

Oliver, whose agency acts as the primary liaison between businesses, investors and local governments, said the agreement came together following a February visit to Fresno State by SEMI President/CEO Ajit Manocha.

“That meeting between Ajit and the local partners, I think he walked away very impressed and inspired by the efforts that are underway here and the best way to cement that relationship was with this MOU,” Oliver said.

Because semiconductor fabrication facilities require massive amounts of pure water (think millions of gallons per day), Fresno isn’t well-suited for manufacturing.

Rather, Oliver said, the aim is to attract companies that operate in other parts of the semiconductor supply chain. Examples might include firms that are involved in their design, testing, packaging and distribution.

During the convention in San Francisco, leaders touted the region’s proximity to the Bay Area and Los Angeles, two international ports (Long Beach and Oakland) as well as the daily flights to Phoenix from Fresno Yosemite International Airport.

“For too long, the Central Valley has been too quiet about its strengths,” Fresno Mayor Jerry Dyer said in a news release. “This partnership is a monumental step towards ensuring that the semiconductor industry knows the advantages of the area and the support for their industry.”

High unemployment a help?

Fresno’s unemployment rate for May 2024 was 7.2%, well above the national (4.0%) and state averages (5.2%). Strangely, that might actually give this area an edge when it comes to recruitment.

“In some regions that already have significant tech investments, there are challenges with the unemployment rate and the difficulty in finding and retaining labor,” Oliver said. “So with the investments Fresno State has made in the engineering school, I think that has readied the workforce. I think when those companies do relocate to Fresno County they’ll find they’re a magnet for that talent.”

In December, less than two months after the Fresno City Council approved the tech incentive package, the Fresno County EDC announced semiconductor company Tynergy would relocate from Wyoming to Fresno, armed with a $15 million state tax credit.

Tynergy’s move remains in the site selection process, Esparza said. The company promises to create 500 new jobs with a starting salary of $70,000 (above Fresno’s median household income of roughly $63,000) plus benefits like childcare, according to an EDC social media post.

“I think Fresno and the Valley at large have always struggled with economic identity outside of agriculture,” Esparza said. “Agriculture is very important and needs to continue to grow. But in terms of diversifying and strengthening the economy, we need other industries to grow at a faster pace.”

Fresno as a key link in the semiconductor supply chain? If it happens, in a way that doesn’t further burden disadvantaged neighborhoods, we’ll all be better for it.