2023 – A Year in Review for Advanced Manufacturing & A Look at What's Ahead.

August 2022 saw the passing of the CHIPS Act, a $52 Billion investment by the Biden Administration to incentivize companies to bring manufacturing back to the U.S.

Inspired by political tensions with China, the U.S. aimed to revive the American manufacturing industry to be self-sufficient.

According to the White House, this has already led to an additional $628 Billion in private investment in key advanced manufacturing industries including EV battery plant production and chip manufacturing facilities.

Key projects include:

$40B TSMC Plant in Phoenix, Arizona

$25B Samsung Semiconductor Plant in Taylor, Texas

$20B Intel Semiconductor Plant in Licking County, Ohio

$4B Panasonic EV Battery Plant in De Soto, Kansas

$3.5B LG Honda EV Battery Plant in Columbus, Ohio

$3.2B Stellantis EV Battery Plant in Kokomo, Indiana

The impact of the CHIPS Act on U.S. construction in 2023 has been huge, and the implications of this has led to a year unlike any other.

Here are some of my key takeaways:

Understanding how to build an Advanced Manufacturing facility

Contractors have had to learn very quickly what it takes to successfully build and deliver an Advanced Manufacturing facility – In November, I attended the first-ever Advanced Manufacturing conference in Nashville, and Alan Blanchette , Senior Director of Automotive at Barton Malow , discussed how he travelled to Wroclaw, Poland to research/study the construction of the LGES EV battery plant before undertaking BM’s first battery facility.

With very few contractors experienced in this niche area of construction, especially given the billion-dollar-scale of the projects, leaders have had to learn quickly and understand what types of experience transfers to ensure that they can staff the projects with specialized construction professionals.

Planning

At the core of any successful Advanced Manufacturing project, you will find careful consideration about planning, schedule, and collaboration.

Randy Drake , Senior Project Manager at Gresham Smith noted that “projects are becoming bigger, faster, more complex and less well defined”, discussing the idea of starting slow to go fast – This is a theme that I have seen echoed across the industry.

These types of facilities have unique challenges associated with them and David S. Verner, RA , Director of Energy Strategy at Gresham Smith highlights four key challenges in his article Battery Plant Design Do's and Don'ts.

• Highly aggressive schedules.
• Multinational global teams.
• Budget and cost control.
• Unique quality issues.

The key to overcoming these challenges is through collaborative planning.

Establishing AEC chemistry and effective decision making from the outset is crucial to ensure that you are successful in creating a comprehensive plan from design through to commissioning and hand-over, focusing on total ownership cost, keeping costs down, and delivering a facility that adheres to the high-quality standards associated with building a large-scale clean/dry room environment.

Speed to market is essential in this market and when you combine these challenges with staffing shortages, material delays, permit requirements such as air permits, multinational teams across multiple time zones with different native languages, and a variety of other complications, it’s easy to conclude that starting slow to go fast is the correct philosophy to deliver a successful project.

Labor Shortages

Given that the EV battery and chip manufacturing industry is new to the U.S., it’s unsurprising that the number of people with experience in this area of construction are few and far between.

Building strong, collaborative teams is necessary to deliver a project of this scale and complexity, and the labor shortage threatens to undermine recent investment.

In the long term, addressing the broader labor shortage in construction is imperative. 麦肯锡 for example noted that in October 2021, 402,000 construction positions remained unfilled, however with the highly aggressive schedule and demand for these projects, contractors need to figure out how to mitigate against the labor shortage in the short term.

Here are my key recommendations based on two years’ worth of conversations with Hiring Managers and Executives for some of the most successful ENR contractors in the industry, and 50+ successful placements on Advanced Manufacturing projects across the country:

• VISA Sponsorship – Utilize the expertise of those that have built similar facilities in other countries. Bilingual construction professionals bring additional value when communicating with owners from countries like South Korea, Japan, and China.
• Culture – The number one thing discussed at the Advanced Manufacturing conference was culture. This is the biggest factor that will incentivize your current employees to stay, and communicating this effectively will have a huge impact on the success of your hiring process.
• Pipeline – Candidates navigating the job market are drawn to joining companies with a strong pipeline of projects to ensure job security.
• Compensation – Like it or not, but another way to incentivize the most highly qualified, and experienced professionals in the industry is to offer a competitive compensation package. Long-term incentives such as ESOP, or performance-based bonuses are helpful in making your company stand-out among the competition.
• Partnering with a Specialist Recruiter – Recruiters are often perceived to be driven by self-interest, however finding a recruiter with a long-term mindset can be invaluable. Specialist recruiters spend their days, weeks and years communicating exclusively with the best professionals in the industry. Check out Metric Geo 's Advanced Manufacturing Division for more information.

The ability to stand out from your competition and get notified the moment an individual becomes available will give you an edge in the competition for talent. The best way to find a true partner is through the strength of their recommendations and the success of their track record.

Looking Ahead

2023 had its challenges, but the CHIPS Act led to an incredible year for those involved in the construction of Advanced Manufacturing projects and this has clearly continued in 2024. ?

We are seeing billions and billions worth of ongoing projects, and contractors have a stronger backlog of projects than ever.

Given the success of contractors like Yates Construction , Clayco , Barton Malow , Gray , and DPR Construction to name a few, many more firms are planning on stepping into the world of manufacturing, developing teams and divisions to take advantage of the federal investment.

With key announcements in the past few weeks such as 台积公司 receiving $6.6 Billion in federal grants to build a $25 Billion semiconductor fabrication plant in Arizona, and SK hynix building a $4 Billion advanced packaging chip facility in Indiana, the demand for Advanced Manufacturing projects in 2024 is higher than ever.

If you're interested in building out your Advanced Manufacturing division, or seeking new opportunities - Let's connect: Joe Lever, Metric Geo.