NY Governor Pushes Chip Plant Amidst AI Data Center Ban
Governor Hochul is reportedly in advanced talks for a semiconductor facility in Utica, raising questions due to her previous statewide moratorium on AI data centers.
New York Governor Kathy Hochul is reportedly pursuing an announcement for a computer chip factory near Utica, despite a recent statewide ban on AI data centers. Sources indicate the governor is in advanced discussions with Solidigm, the U.S. subsidiary of South Korean chip manufacturer SK Hynix, which is exploring sites in Oneida County for a semiconductor manufacturing facility that could generate hundreds of jobs.
Insiders in Albany have suggested that any potential announcement could be a strategic move for an election-time photo opportunity, as Hochul faces a competitive race for re-election. In July, Hochul implemented a year-long moratorium on new AI data centers to allow for the development of state regulations, a decision that drew criticism from former President Trump.
The push for the chip plant comes as the Trump administration intensifies efforts to encourage foreign companies to establish manufacturing operations within the United States, with threats of significant tariffs for non-compliance. Commerce Secretary Howard Lutnick has warned foreign chipmakers of potential tariffs up to 100% if they do not build plants in the U.S.
A facility in upstate New York could allow SK Hynix to reduce its dependence on its plant in Dalian, China, potentially helping the company navigate U.S. trade restrictions and secure state subsidies. However, the project faces a potential federal hurdle. Reuters reported on October 14 that SK Hynix's plans to build a new U.S. factory are contingent on U.S. approval for the export of restricted American chipmaking equipment to its facility in China. The company aims to upgrade its Chinese plant to increase production, which would help finance the new American operation.
While a Commerce Department spokesperson declined to comment directly, referencing existing federal regulations, sources familiar with the federal government's stance suggest that U.S. policies, rather than state incentives, are driving chipmakers to consider American facilities. The proposed upstate project is separate from SK Hynix's ongoing discussions regarding leasing space at Intel's Ohio plant.
Solidigm has not denied the possibility of plans in Utica, with a company spokesperson characterizing the reports as "speculation" while acknowledging that the company is evaluating its "strategic alternatives." Governor Hochul's office has not yet provided a comment. New York is reportedly offering significant state tax incentives through its Green CHIPS program to secure the deal.
The proposed facility would produce NAND flash memory chips, essential components for AI data centers and smartphones. South Korean officials have expressed a desire to balance job creation at home with navigating international trade dynamics, with President Lee Jae Myung stating that Seoul would seek to "protect South Korea’s national interests while respecting the views of companies."