A California semiconductor company plans to hire hundreds of employees exclusively from local unions, a rare move in an industry historically averse to organized labor and one that could boost its bid for US funds.
Akash Systems Inc has entered formal labor agreements with the industrial division of the Communications Workers of America (CWA) and the Building and Construction Trades Council of Alameda County, covering about 250 production-line workers and dozens of construction workers who are to build a US$62 million semiconductor facility in West Oakland, California.
The company said the union agreement would allow it to more rapidly hire and train skilled workers.
Photo: Bloomberg
However, it also has the added political benefit of appealing to US President Joe Biden, who has worked in recent months to burnish his pro-union intentions.
Akash is one of hundreds of firms vying for money from last year’s Chips Act, which set aside federal grants and loans valued at US$100 billion for chip makers and their suppliers. The law aims to bring semiconductor manufacturing back to the US and reduce reliance on Asian supply chains — while contributing to a broader manufacturing revival that Biden has promised would be a boon to organized labor.
“Historically, semiconductor tech companies in general are not excited about unions,” said Akash Systems cofounder and chief executive officer Felix Ejeckam. “We are aware that the Biden administration’s excited about this and so we’re certainly leaning into that.”
White House spokesperson Robyn Patterson said Biden and his administration “welcome partnerships between the semiconductor industry and labor unions.”
US Acting Secretary of Labor Julie Su hosted Ejeckam and several union leaders at an event Tuesday on empowering workers, according to a press release.
The US Department of Commerce declined to comment on any potential applicant, but pointed to the administration’s so-called “good jobs principles,” which include workers’ right to organize.
Those principles are part of the guidelines for applicants seeking Chips Act funds, along with a preference for labor agreements between chip makers and construction unions. Projects that receive government support are also covered by updated federal wage rules, which increase pay for more than a million construction workers.
However, labor deals are rare in the semiconductor sector. Only one US chip production facility — ON Semiconductor Corp’s plant in Mountain Top, Pennsylvania — has a unionized workforce, according to the CWA.
The tension is already playing out in the US chips push, as Arizona unions clash with the world’s leading chipmaker, Taiwan Semiconductor Manufacturing Co (台積電), over safety and management issues at their US$40 billion Phoenix site.
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