A South Korean venture could bring a lucrative new industry to Georgia — manufacturing parts for computer chips.
SK Group and partners plan to invest at least $473 million and hire about 400 workers for a new factory in Covington to make glass parts for semiconductors. The plant is expected to open in the summer of 2023, Gov. Brian Kemp’s office announced Thursday.
Georgia’s technology sector is booming. SK Group already is building an electric-vehicle battery plant near Commerce. Tech companies have flocked to metro Atlanta to open research hubs, including Microsoft, Google, Visa and Cisco.
But the massive semiconductor industry — its chips essential for everything from mobile phones to medical equipment to automobiles — represents new territory for Georgia.
Computer chip manufacturing is concentrated in Asia, with big plants in Taiwan, China and South Korea. The U.S. also has several big semiconductor plants, but most are outside the Southeast. Five chip plants are located in North Carolina, the closest the industry gets to Georgia.
Chips are so important that when there’s a shortage, as has been the case for almost a year, it can slow the global economy. U.S. economic growth weakened to 2.0% in the third quarter, the Commerce Department said Thursday, with economists blaming the COVID-19 delta variant and supply chain problems.
Despite recent improvement in lead times between orders and delivery for computer chips, some industry players say the shortage could persist through 2023. U.S. policymakers have called for more domestic manufacturing.
SK Group’s Covington facility will make glass-based substrates, which attach chips to circuit boards. The glass technology was developed in part by former Georgia Tech electrical engineering professor Sung Jin Kim, who now works for SK Group.
“This announcement is a prime example of Georgia being at the forefront of addressing one of our nation’s most pressing supply chain roadblocks, which has affected so many U.S. manufacturers,” Kemp said in a news release.
Georgia has tried to recruit other large tech manufacturing projects, lately making electric and self-driving vehicles one of its economic-development priorities.
Apple earlier this year was in talks about building its planned electric vehicle at Kia’s automotive factory in West Point, but those talks fell through. The Atlanta Journal-Constitution reported this summer that Georgia was recruiting EV maker Rivian for a new manufacturing plant, perhaps to be located at a state-owned megasite near Savannah, according to people familiar with the matter.
A steady stream of other economic development news has surfaced in recent months. On Thursday, Kemp’s office announced MBS Equipment Company, a major supplier for film and television, will open its new East Coast headquarters in Fayette County.
Georgia has been aggressive in offering economic incentives, including tax breaks, to recruit companies. In October, it was named the best state to do business for the eighth straight year by trade publication Area Development.
State officials declined to provide details on economic incentives provided to SK Group for the Covington plant, and whether SK Group has already signed contracts to sell the chip parts it will make in Georgia.
SK Group will build the facility on the same property as its existing Newton County plant, about 35 miles east of Atlanta. The plant, run by its SKC subsidiary, opened in 1996 to make polyester films used for labels on consumer products, window coverings, solar panels and other applications.
During the pandemic, SKC manufactured face shields and other personal protective equipment at the site.