Hempfield semiconductor plant tabbed for possible $3 million federal investment

A Hempfield manufacturer of semiconductor chips for military and commercial aircraft, solar power projects and windmills is in line to receive $3 million in federal funding.

A company official said Friday the money will be used to almost double its capacity and add jobs.

“This (funding) helps to ensure the future of the plant,” said Joseph Wolf, chief executive officer of Powerex, a Hempfield-based company.

The Biden administration is proposing to funnel $3 million through the CHIPS and Science Act to Powerex.

Powerex expects the expansion and equipment updates will cost about $15 million. It will finance what the government does not cover, Wolf said.

The company operates at a former Westinghouse Electric Co. facility that’s adjacent to Westmoreland County Community College near Youngwood. The building was built in 1956.

The government’s investment in Powerex allows the company to compete and helps the products to be made in America, said Ron Yurko, Powerex chief operating officer.

Powerex produces discrete devices, modules and integrated high power semiconductors. It makes semiconductor power modules used in F-35 fighter jets and commercial aircraft, Wolf said. With more than half of its power modules production dedicated to military applications, Wolf said, Powerex plays an important role in supporting Defense Department programs.

The expansion will create about 55 manufacturing jobs and about 20 construction jobs.

Powerex already has added about 30 jobs since last year, boosting its workforce from 180 to 210.

It plans to add 20 to 30 more jobs, with starting technicians under a union contract getting about $18.50 an hour plus benefits, Yurko said.

Powerex started last year to expand the facility within the building’s existing footprint, adding 4,000 square feet to a “clean room,” Wolf said. The clean room is where heightened air circulation removes impurities that could impact semiconductor production.

There is a lot of demand for its discrete devices and high power semiconductors, Wolf said.

“We need to increase our capacity to meet those demands” for power modules, Wolf said. “This market is only going to grow.”

He said Powerex is one of the last fully integrated companies that buys raw silica and manufactures its own chips.

The company purchases silica from China, Europe and Japan for its commercial applications, but only from domestic sources for military products, Wolf said.

As much as the proposed federal funding is good news for Powerex, Wolf acknowledged that the semiconductor manufacturer faces headwinds in the new year. That’s because the 25% tariffs implemented about six years ago during President Donald Trump’s first term on the cost of semiconductor components will double to 50% in 2025. They are already dealing with customers on that price hike, Wolf said.

The U.S. Commerce Department also proposes to provide $32 million to New York-based Corning to increase production of its high-purity fused silica and ultra-low-expansion glass. Both are critical in the manufacturing of semiconductors.

In April 2023, Sen. Bob Casey Jr., D-Scranton, who appears to have lost his Senate seat to challenger Dave McCormick, visited Powerex to lobby for the company to receive CHIPS funding.

An assessment will be done by the U.S. Department of Commerce before final amounts are announced and awarded.

Both Powerex and Corning also indicated that they plan to claim the U.S. Treasury Department’s Advanced Manufacturing Investment Credit, which is 25% of capital expenditures.

President-elect Trump’s return to the White House, however, casts some doubt on the future of the CHIPS Act.

The 2024 Republican National Congress manifesto pledged to “bring our critical supply chains back home” to “become the manufacturing superpower by protecting American workers from unfair foreign competition.”

However, in his pre-election interview with podcaster and comedian Joe Rogan, Trump referred to the CHIPS Act as “so bad” because it subsidizes “rich companies.” Samsung, for example, which is based in South Korea, has a market cap of $211.8 billion, making it the 35th most valuable company in the world.

Steven Cheung, a spokesman for the Trump campaign, could not be reached for comment.

Bill Bretz, chairman of the Westmore­land County Republican Party, said he did not have sufficient information to make a comment regarding the CHIPS Act but he is excited by the fact that a local company is benefiting from it.

The fate of the CHIPS Act is uncertain, given Speaker of the House Mike Johnson’s comments this month that Republicans would probably try to repeal it. Johnston, however, quickly tried to reverse that statement, saying instead he would like to “streamline” it, according to the Associated Press.

Westmoreland County Commissioner Ted Kopas, a Democrat, was quick to point out outgoing President Joe Biden’s role in the CHIPS and Science Act.

“It certainly is very welcome news and furthers Westmoreland County and Western Pennsylvania as a real leader in high tech manufacturing. It also underscores the significance of the CHIPS act passed by the Biden administration,” Kopas said.

Republican Sean Kertes, a Republican and chairman of the West­moreland County commissioners, welcomed Friday’s announcement.

“This is great news for Powerex, with companies across the county and nation looking to source domestically built components,” he said “Manufacturing is in our DNA here in Westmoreland County. So, of course, we’re thrilled that Powerex is expanding and re-shoring jobs as it builds a new semiconductor fabrication line.

“With a robust network of industrial parks and resources such as the Digital Foundry at New Kensington, Westmoreland County has long supported the manufacturing sector and its workforce. It’s great to see employers recognize those investments by choosing to expand or set up shop here.”

The county’s planning and economic development director was unavailable for comment.