In the fall of 2022, Micron, a leading advanced technology manufacturer, agreed to partner with New York State to build a $100 billion dollar semiconductor fabrication facility in upstate New York. How did this deal come to happen? How did federal and state policy, such as the CHIPS and Science Act and New York’s Green CHIPS Program, work to incentivize Micron to come to New York? And what role did local government partnerships play in the deal?
On the latest episode of Policy Outsider, Kevin Younis, chief operating officer and executive deputy commissioner of Empire State Development and one of the principal architects of the Micron deal, sits down with Rockefeller Institute President Bob Megna to talk about the deal and the critical role of decades of policy in bringing it to fruition.
Bob Megna, president, Rockefeller Institute of Government
Kevin Younis, chief operating officer and executive deputy commissioner, Empire State Development
Transcript was generated using AI software and may contain errors.
Alexander Morse 00:05
Welcome to Policy Outsider presented by the Rockefeller Institute of Government. I’m Alex Morse. In the fall of 2022, Micron, a leading advanced technology manufacturer agreed to partner with New York State and build a $100 billion semiconductor fabrication facility in upstate New York. How did this deal come to happen? How did the federal CHIPS and Science Act, New York’s Green CHIPS Act and local government partnerships incentivize Micron to come to New York instead of another state or even possibly overseas? Why is New York’s existing network of SUNY institutions and academic partners, research and development facilities, military veterans’ workforce, and natural resources so attractive for the semiconductor industry? And what about Micron’s commitment to investing and building up communities makes them a good partner for New York. On today’s episode, we’ll get to know Kevin Younis, who was instrumental in negotiating a deal with Micron. Kevin, the Chief Operating Officer and Executive Deputy Commissioner of Empire State Development sits down with the Rockefeller Institute President Bob Megna to talk about the making of the Micron deal and the role of policy in laying the groundwork to secure Micron’s investment in New York State coming up next.
Robert Megna 01:42
Hi, this is Bob Megna president of the Rockefeller Institute of Government. I’m joined today by Kevin Younis, who is the CEO and Executive Deputy Commissioner of Empire State Development Corporation, someone I’ve had the pleasure of knowing for quite a few years. And I’m glad he’s here today on what I think is a real interesting development in New York State, which is this whole semiconductor industry development in New York, not just the latest Micron deal, but maybe we could get Kevin to talk about other things that are going on in this important industry. But Kevin, why don’t you start by introducing yourself telling us a little about yourself? I think our listeners would love to hear that.
Kevin Younis 02:42
Sure. Thanks, Bob. Appreciate you having me. Kevin Younis, I’m the CEO and Executive Deputy Commissioner with the state’s primary economic development organization, Empire State Development. I’m a lifelong New Yorker and a lifelong except for a brief stint in Asia where I taught some English and, and studied Chinese. Born and bred in Syracuse, I am a public school from almost the entire time that I’ve been from kindergarten to grad school. I’m a SUNY Cortland grad, for undergrad and I’m a I have my MBA from Rockefeller just up the street here. So I’ve been a product of the public school system except for a brief stint in the Catholic schools which, you know, didn’t work out
Robert Megna 03:06
It didn’t work out?
Kevin Younis 03:08
It didn’t work out for me, they decided I should go someplace else.
Robert Megna 03:16
That’s good because I spent my first 12 years of educational system was in Catholic school. So, it’s a good contrast. Professionally, what have you been up to?
Kevin Younis 03:44
So I am, I guess I’m kind of a lifelong public servant. I was came out of college, and I did an AmeriCorps type program in Syracuse for a couple of years. And as I said, I moved to Taiwan for for a bit and studied Chinese and taught English. I spent a few years after that with the state legislature state assembly and work for a member of the assembly from the Rochester area, David Kuhn. I then worked for CSEA I did public policy for CSEA for a few years. Great experience with with those folks. And then I moved on to an IBM with Empire State Development since 2007 to 15 years. In that, you know, in that work, I started off doing a lot of the Legislative and Public development of their programs and when you when you’re creating program with the legislature, you end up transitioning to implementation and operationalizing them so eventually, over the years, I was found myself having created most of the programs, I then operationalized so many of the programs and it just morphed into the current position that I have today.
Robert Megna 04:58
No, great. You know what one of the things I like doing about these podcasts is I usually get to pester people about the people I’d like to talk to. And I really enjoy bringing people who have long stayed experience, because I think it, it’s number one, it’s interesting for people listening, and also maybe for folks out there who wonder what it’s like to actually work for the State of New York for a significant part of their lives as both of us have, can you tell us a little about what your role is at ESD? Now?
Kevin Younis 05:36
Sure. It’s the title, as I said, was a COO. And with that work, it comes a report directly to Hope Knight who’s the commissioner at ESD, who is fabulous, I love working with her, she’s really, she’s, she’s really an asset and glad to have her with us. I lead most of the Organization reports survey. So if you think about the work we do, which is broadly, you know, we try to grow the economy and create opportunity for folks. And we do that in a lot of different ways. We have incentive programs, such as we use the Excelsior program and GREEN Chips to attract my Micron. But we do the States, I live in New York program, and we do tourism marketing, we even do things like large real estate projects in New York City. So Moynihan station, for example, is a project that ESD led on behalf of the state and a really great, cool project. But the the work we do is incredibly varied. Because at some level, what isn’t economic development, right? So we do, in some cases, workforce development, we cover a lot of ground, it’s, it’s very meaningful work. It’s good stuff, right? Or you can feel like you’ve done something every day, it’s it’s overwhelming, it never stops. But you always feel that you’re really making a difference.
Robert Megna 07:00
Great. So maybe given that, you know, we have a long kind of storied history with high tech companies in New York, IBM and others that have had, you know, we’ve made significant economic development ventures have done a lot. Curious what where you think we are now I know this, my current deal is great. And maybe you can talk a little bit about that. But also, you know, what might be on the horizon.
Kevin Younis 07:31
Besides that, you know, that’s we’re doing a lot of work. In the semiconductor space, it’s a unique opportunity, both nationally, and internationally, as well as for New York. And I think we’ve really positioned ourselves well as a state to take advantage of it. So think about the semiconductor industry today $550 billion on a global, but it’s, it’s expected to grow to a trillion in the next few years, right? So by 2030, you can see a trillion dollars, that’s a lot of zeros. And so there’s real opportunity. And what comes with those, with those investments, though semiconductor manufacturers is the supply chain is very deep. There are so much work that comes with it in terms of tools, in terms of you just think about the construction, a project like Micron, on average will have 5000 construction jobs, on average for 20 years. Right that so there will be 1000s of construction jobs, always at that site. And so we think about not just the Micron, but the supply chain opportunities, which are all high tech. Clearly, as we sit here in this room, we talk on these microphones and recorded on a computer and the Bitcoinist nature of chips. For all the things we do autonomous vehicles batteries, you know, what’s happening in the green economy is driven. It’s it’s certainly has a huge input from from microchips. And so it’s a it’s a foundational technology that can really move into so many other different technologies that we’d like to have in New York.
Robert Megna 09:15
How did you convince Micron to come?
Kevin Younis 09:18
The long conversation, it began roughly 14 months ago. I think Governor Hochul was on the job for all 10 days. And we brought in leaders from Micron to talk to her and she was she was in and she recognized from the start, you know that that deep value of a semiconductor manufacturer and was very specific to me and the ESD team to you know, do what ever we could to be successful. And so we continue to have those discussions from then until really just this fall and the ways the reasons I think that they decided on New York are certainly the incentives mattered. And that’s not that’s not pretend they don’t they do. But I’d say, absent. The Federal chips bill, Chuck Schumer and Senator Schumer and the work he’s done there, this project doesn’t happen in the US, you know, absent the green chips bill, which is what the governor put forward this back in May, June, they’re not coming to New York. And really the work that Ryan McMahon of Onondaga County did to prepare that site. And to make that site attractive for a company like Micron. All of those were really critical elements. But there’s a longer history, right? I mean, think about it, you and I have known each other for a lot of years, and a lot of that time, we’ve been talking about the semiconductor work that goes on here at the Albany Nanotech Complex, when I asked them and talk to them about why New York on their lists of why New York is the opening editor complex, right? That is one of the reasons it’s a it’s an industry that is always going to be moving their technology forward, because their competition is. And so the opportunity to partner here with companies like IBM and Applied Materials. And the investments we’ve made to bring those folks here has real real value to admit, it was certainly one of the reasons.
Robert Megna 11:15
Now, I’m glad you raised that, because I don’t know, I want your opinion on this. It seems like you know, sometimes these investments take years to materialize, right? Not just Micron, but the fact that nanotech was here. And those things, those all took a lot of time to kind of work themselves out.
Kevin Younis 11:39
Absolutely. I’m a I’m a big fan of the game risk, and kind of a dork about it. But there’s only one way you win and risk. And the way you do that is you. You pick a continent. And you continue to put your armies into that one continent so that you can eventually expand, you reach a critical mass. And the same is true for economic development is that there’s no one shots, they don’t happen. Just because we gave something to accompany companies don’t come for one reason they don’t come for just incentives. They don’t come for just workforce, they come for a lot of reasons. And so the investments that we made in this industry, with a company like Global Foundries with companies like IBM, with the OpenIndiana, Tech Center, Wolfspeed in in the Mohawk Valley, on semi in in the mid Hudson, that critical mass is what brought a folks from Micron here, the workforce, the research institutions and partnerships and academic Yep, they there’s a lot of reasons, but absent the investments and commitments by administrators going back, you know, since you started here in state government, this doesn’t happen. Right? There’s a lot of critical reasons.
Robert Megna 12:56
No, thanks. It’s pretty deep. I think people are often critical of incentives. And you kind of implied that. But the reality is, and maybe you can talk about this a little, you know, New York’s in a competition out there. It’s not like other states don’t offer incentives. But is that how accurate is that?
Kevin Younis 13:21
Absolutely accurate. And it’s not just other states. It’s it’s the it’s a worldwide competition. And that’s, I think, why the Federal CHIPS bill moved, when a when a company goes to manufacture semiconductors. In Asia, they might have 50-70% of their costs covered by the hosting government in South Korea, China. So that’s what we’re competing against. And then when you go to other states, there’s same competition, right, these it’s incredibly competitive landscape. And so we needed to be in this space. But you know, using Micron as an example, the State offered directly to Micron five and a half billion dollars of pay for performance Excelsior tax credits over the next 20 years. That’s a huge number it is, but juxtapose that against the $100 billion capital investment, the $70 billion operating spend that is estimated over that timeframe. It’s a great return. There’s I think, we estimate we had Remy, do a study for us. And Remy did a fiscal impact analysis that estimates $17 billion in state revenue, just seven from the state, another 25 billion in state and local revenues, right. So the return on investment is there. It’s an incredibly competitive landscape. We without the green chips, we weren’t gonna win this project. And we knew that back in, you know, in the spring, and I went to the governor and we talked about what we needed to do, and we advanced green chips, and that gave us the resources necessary to compete with this states like Texas and California and Arizona, successfully in this case, but it was the difference maker for New York. All of a sudden things amazing. But it was a difference.
Robert Megna 15:11
No, that’s fascinating. But it’s always true, right? I mean, these things are never simple, right? There. always complicated. What about the site? What what made that attractive,
Kevin Younis 15:25
So I got a cool little backstory, infrastructure. So power, there’s in there, there’s a confluence of the nuclear power that comes from the north. And then the, the hydropower that comes from the West, and they meet at that location. So there is so much power coming to that location. In addition, you have Oneida Lake, you have the other Finger Lakes, you have a Lake Ontario, the water. So this, this industry needs water, it needs power, it needs space. So the magnitude of this project from all of those perspectives, 7.2 million square feet of building 7.2 million square feet, that is a lot of square feet, it’s just massive. They’ve two and a half million square feet of cleanroom. You know, juxtapose that with a are unbelievable, great project, wolfspeed 65,000 square feet, right? So you’re, the magnitude of this just is staggering. And so that site, again, to the to the credit of a county executive, he took some political heat for continuing to assemble those parcels to make those investments infrastructure, but absent those, we don’t have a site that can host them. So he put that in place. I would say the little anecdote 1998, you were probably around for this. I was, in my beginning of my career, the state made some significant investments in trying to prepare for attracting this industry, Nano 98 or something like that. So in central New York, they hired a guy to do an assessment to help them identify where would be a great location. And he identified that location, as wasn’t called White Pine at the time, but here’s this water, here’s this power. So I’m looking at these documents over the course of the last 16 months. And I open it up and it’s written by a guy named Mark Waterhouse. Mark Waterhouse is my wife’s father. He wrote this report in 1998. That’s taking all the credit for the project, by the way.
Robert Megna 17:34
He should yeah, he should. That’s funny. I, you know, no, in 1998. And maybe this is a weird time, I was actually taking a two year hiatus and working in Virginia, as at the air Tax Department. And that was when dominion and IBM were building fabs in, you know, around just north of Richmond, maybe 2530 miles north of Richmond. And to your point from before providing significant, you know, so sometimes people talk about states like Virginia, like they’re not in the same game of providing incentives, they were providing significant incentives to this consortium of companies back then, yeah, which I think Dominion represented. And, you know, so I spent a little bit of time in their cleanroom down there, because they actually wanted sales tax exemptions on construction materials, because they said they were vitally tied to the manufacturing process, which as you know, I don’t want to bore our listeners. But when you make it manufacturing, it’s usually exempt. Right? So those kinds of things, but it’s a very intense competition for these kinds of things.
Kevin Younis 19:05
They’re unbelievably expensive. I mean, they’ve become even more so. There are tools, there’s something called and high EUV tool, extreme ultraviolet light. In order to make the chips the way they need to make them on a cost competitive basis. They use these tools that can cost a half a billion dollars per tool.
Robert Megna 19:26
I’m glad you mentioned that because I think sometimes people get confused when we talk about tools. These are not screwdriver. These are and basically not reusable, right? I mean, these are things you build for a specific purpose at a specific site. They’re incredibly expensive.
Kevin Younis 19:45
There is one company in the world that makes these tools currently SML is the only company that makes these UV tools and the way chips are made they become so incredibly small the etchings on these things that physical Things can’t possibly make it has to be done with light, even chemical reactions are to ham handed, if you will, it requires the light at such a scale to make these etchings and to the size that the industry needs them today.
Robert Megna 20:15
What’s next? Like? You talked a little bit about that. But where do you where do you see this going now that this Micron deal is is done.
Kevin Younis 20:23
So the easy part is done. Right? I mean that you’re getting to the agreement, it was very, very difficult. There was a ton of work, an incredible partnership with Senator Schumer’s office and the locals, CenterState CEO, led by Rob Simpson, just great, great partnership. Without that, that cooperation partnership, we don’t succeed. But that’s it’s the beginning. Because they’ve announced it, and they’ve started work to get that site ready. They’re gonna they have to do all the secret and all the environmental assessments. But workforce, how do how do we meet that demand? How do we meet that demand and provide those opportunities to New Yorkers? How do we meet that demand and provide that to New Yorkers who are often on the outside looking in? Right, the disadvantaged populations, Syracuse has a unique, a very high concentration of poverty, right. And so we need to make substantial investments and efforts to provide opportunities for those communities. And there’s a real opportunity that both the federal program and ESDs green CHIPS program require community investments. And Micron is, frankly, a very willing participant, they have, they have always been somebody who we felt culturally aligned with, and that’s in, in the line of work that we’re in. That’s, that’s unique. These guys care about diversity, they really do that they’re the type of organization that when they don’t do that, doing great, when they can do better, they say it on their website, that’s, that’s a hard thing for a company to do, hey, we need to do better, but they do. They’re really committed to sustainability. They’re very committed to opportunities for disadvantaged populations. And so they’re going to make the chips, we’re going to help them make sure they get the support, they need to get there. But that’s not my business, right? That’s not our business, our business is helping them succeed. But taking the greatest advantage of the opportunity that we have here for everybody in New York. So workforce, we got to make those investments in the construction opportunities, the scale is, is truly transformational. Right. So you it’s a word we use all the time. Maybe too much, it loses its value. If if we can provide real opportunities for you know, the broad swath of New Yorkers, that, you know, I’m I think that’s our work today. And then And then, frankly, to sustainability helmets, right? These are incredibly intensive in terms of resources. So how do we do that? And you know, our program that’s, I think, incredibly unique about the green chips, the green and green chips, requires these guys to be world leading in the way they think about sustainability. So greenhouse gas emissions 100%, clean, electricity, renewable electricity,
Robert Megna 23:17
right. Arizona couldn’t do hydropower for this plant. Right?
Kevin Younis 23:21
Right. Hydropower, the water requirements, right? They will 100% reuse their water. 100%.
Robert Megna 23:30
And you have alluded to this. But I see it as a big, not a bottleneck, but something we all have to work on. One of the speakers at the event was the Onondaga Community College president. Right. And I thought that was great that that was the direction because I think, you know, yes, you need very high tech engineers and other people that are going to work. But you know, the day to day workforce is not, you know, all PhDs. It’s a lot of people who have been trained to work in that industry. And like you’re saying, I think it’s not just the scale of this is so big. It’s not just going to be in Onondaga. It’s going to be something we have to figure out statewide.
Kevin Younis 24:20
For sure. Yeah, I mean, that this is a, the ramifications of this project will be felt throughout the entire upstate. And, in fact, you know, to a lesser degree in New York City, but certainly that there are research institutions and people looking for those partnerships today, coming out in New York, right? There’s there’s great opportunity. But we do have, I mean, you know this better than I do, that the network of SUNY institutions that community colleges that exist, you know, we have a great starting place. There are mechatronic programs, there are real certification opportunities. We just kind of scale right we’ve got to work with our folks here at HVCC and more at an OCC replicate, improve, align, grow. But we you know, having, that’s one of the reasons they chose New York, we sat them in a room at one point. And I remember, it was a distinct moment back in January, we brought their leadership in, and the research folks in particular and their workforce, folks, I think there was a certain amount of skepticism, right? They didn’t know who we were, they didn’t know what we were capable of. And we sat him in a room with the entire network of public and private universities in upstate New York, those engineering schools, those two year schools, there, I mean, I could see it in their eyes, they were they went from skeptics to believers, they were thrilled to know that they would have the opportunity to work with this incredible network of two year, four year higher, you know, like, and beyond PhDs, it was it was a, it was an amazing moment to see, it was fun for me to be there to see, you’re just like, Oh, my God, we have this. Yeah.
Robert Megna 25:58
It’s always been for years frustrating to me when people say that there’s a disconnect between having a trained workforce, you know, that so industry could locate in a place like upstate New York, we have, you know, an enormous number of two year four year Research Center, places in New York, public and private, that are churning out, you know, well educated folks that can help
Kevin Younis 26:30
A neat thing that this company in particular focus on, I think the industry, they want to capitalize on the military, veterans, they want veterans because they find that those folks are just great fits for the work they do. And so we have Fort Drum, we have the Veteran Center at Syracuse University, there is such a great connection and opportunity there. For us and for for Micron and for the industry generally. So we have so many of the building blocks, but the reality is we get to scale it, we get it we really get to scale.
Robert Megna 27:05
I’ve been talking to you for a long time about stuff like this. And I know one of you and you can correct me a frustration you’ve felt I think in the past is stretching this kind of Albany success across the Thruway through Western New York, this seems to me like you’ve taken a giant leap. What Where do you see it going from there?
Kevin Younis 27:29
Well, you’re right. I mean, we, you, we make these investments in research and workforce to attract the manufacturing that has been the Holy Grail, you know, we certainly had that with global, right, we’ve got that when we did most of it. But the magnitude of somebody like Micron, changes the game entirely. And so that supply chain that comes with a project like that, you know, I don’t think it was two weeks after we were with the President in Syracuse, that we are announcing Edwards vacuum, you know, a critical supplier to the industry, they were locating it in Genesee County at the stamp site, right. And so, you’re gonna see those type of supply chain announcements and investments. And frankly, I think more semiconductor, right? The scale like this happens once in a lifetime, if you’re lucky. But certainly, you know, billions of dollars, right, these because these projects, even at their smallest are billions of dollars, and hundreds of jobs. So I think we’re going to continue to see that. And when you build this industry, other industries that support it and depend on it are going to are going to come
Robert Megna 28:45
I think we’re getting close to the end. But I would like to ask outside of semiconductors. I know you guys, as you described yesterday to begin with are basically focused on all industries across New York. What are there other areas you’re pretty hopeful about now that, you know, we could be looking to the future and seeing some, you know, where do you see the future going in terms of other industries in New York?
Kevin Younis 29:16
I think Life Sciences has a has a lot of future and there’s its medicinal opportunities that whether they call it personalized medicine. You know, I had a friend who just went through a cancer treatment where they remove the T cells from his body, genetically enhanced them to target a specific cancer and put it back in. I mean, you don’t get more personalized than that. And that’s just that’s coming and so the opportunities there for the life sciences industry are thicker, huge in New York because we have a great again that academic and that research fabric that exists from Buffalo to Long Island, right. And that is I think we’re uniquely positioned and we’ve been. It’s, it’s just like it was with semiconductors. So we started these investments as you know, 25 years ago. And we created the infrastructure and the workforce and sorry to get those wins. We have an incredible network of academic and research institutions, from Buffalo, to Rochester, to New York City to Long Island and everywhere in between. I think there’s a huge opportunity in the life science space. Yeah.
Robert Megna 30:30
Listen, Kevin, I want to thank you for doing this. And if there’s anything else you’d like to bring up while you’re here, feel free.
Kevin Younis 30:38
I always want to say thanks to to the governor, obviously, I always want to say thanks to my boss Hope Knight, and frankly, my colleagues, we just these projects, I’ve been lucky enough to be sort of front and center and be the guy that has this conversation with you. But I have so many colleagues have been doing so much great work for their entire careers. And this is, this is truly just the capstone for so many of us. And we’re all really proud of what we what we’ve done and the work that we’ve been doing for the last 25 years.
Robert Megna 31:10
When you sit in in the lounge chair after, if you can talk I worked on $100 billion investment for Upstate New York, I think you’re gonna feel good about that.
Kevin Younis 31:21
I’m from Syracuse. Right. I grew up in Syracuse, I grew up in a in a fairly tough side in Syracuse, and I had this great opportunity recently to do an interview with syracuse.com. And he had a great conversation with a reporter and he came up with a nice piece. And I heard from so many of my childhood friends and just college friends about about how, how excited they were about this opportunity and felt differently about Central New York because of this opportunity. It’s really a It’s why you do this stuff. Yeah, absolutely.
Robert Megna 31:55
Listen, thanks again. Kevin. This was great. And you did a great job. Thank you. Thanks.
Alexander Morse 32:04
Thanks to Rockefeller Institute, President Bob Megna and Empire State Development’s Kevin Younis for detailing the economic development landscape of the semiconductor industry and outlining what federal, state and local government policies and partnerships are instrumental for securing Micron’s $100 billion deal. On the next episode, Bob Megna returns to host Dave Anderson, President of NY CREATES to dive deeper into the semiconductor industry, including how chips are made, the important role of NY CREATES and SUNY’s semiconductor research and development for advanced manufacturing, and what economic growth and technological advancements we can expect in the not so distant future. If you liked this episode, please rate subscribe and share. It will help others find the podcast and help us deliver the latest and public policy research. All of our episodes are available for free wherever you stream your podcasts. transcripts are available on our website. Special thanks to Rockefeller Institute staff Joel Tirado, Heather Trela, and Laura Schultz for their contributions to this episode. Thanks for listening. I’m Alex Morse, until next time. Policy Outsider is presented by the Rockefeller Institute of Government, the public policy research arm of the State University of New York. The Institute conducts cutting edge nonpartisan public policy research and analysis to inform lasting solutions to the challenges facing New York state and the nation. Learn more at rockinst.org or by following at Rockefeller inst. That’s Rockefeller i n s t on social media. Have a question comment or idea? Email us at [email protected].
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