NHanced Semiconductors primed to create 250 jobs in Bloomington
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Bloomington will soon be home to a new employer and industry, filling part of a gap in the local economy after Chicago-based NHanced Semiconductors announced a $152 million investment into a Cook Medical facility, which will result in at least 250 high-wage jobs.
The company will turn the mostly vacant Cook property, located at 301 N. Curry Pike, into a microelectronics manufacturing and packaging facility. It will lease the building from Cook.
The Bloomington project meets the needs of NHanced’s rapid growth. Founder and President Bob Patti estimates the company will grow 350-to-400% within the next year as the semiconductor industry increases its focus on innovation and specialty production.
“Our market demand is moving way faster than the ability to build new buildings,” he said.
The company is in the midst of building a facility at the WestGate One campus with several partners, located inside the WestGate@Crane Technology Park in Odon. Ground was broken on the campus in November 2022, and a company spokesperson said NHanced contributed to the total $236 million investment to build and equip a 150,000-square-foot plant.
The company said it would create up to 413 jobs for its production at the Odon facility. Due to supply chain delays, the production launch date was pushed back to 2026.
Where does NHanced fit in the semiconductor industry?
NHanced is essentially in a different market than the major semiconductor companies talked about on the news producing millions of parts, Patti said. The company is a low-volume producer, which allows it to work on more specialized chips at lower development costs.
“It’s funny, we don’t really compete because my customers don’t ask for enough material to be of interest to them, and their customers have way too much volume for me to be interested in too,” he said. “I like to say we’re really in a different business than a lot of those companies.”
The company’s niche is advanced packaging, which essentially means they “stack” chips to improve power and efficiency; those stacked chips amount to about 20% of a human hair. They don’t build those chips, Patti said, but rather, NHanced makes minuscule optimizations within the chips to make them faster and use less power.
“If we can do this advanced packaging for smaller development costs and more quickly, it means that you can actually build smaller quantities of parts that are targeted at markets cost-effectively,” Patti said.
Bob Patti speaks about his niche in the semiconductor industry and what he is bringing to Indiana.
In 2016, the company spun off from Tezzaron Semiconductor Corp., which Patti also founded. His companies have producing these optimized chips for about 20 years, he said, but the industry has been slow to catch on since the industry is conservative to change due to its multibillion-dollar assets. However, he said the industry is now evolving to accept new innovation to lower costs and efficiently power more complex products, a turn he called “the underpinning of a revolution” in the industry.
“We have been pioneers in this and have been at it a long time,” Patti said. “I like to say we’ve become a 20-year overnight success.”
Since splitting off, he said NHanced has grown about 15-20% a year, but the last few years have compounded into Patti expecting about four-fold growth this year.
The company’s customers tend to be from the medical, industrial and scientific industries, he said, but also include those in the automotive and government sectors.
About the Bloomington facility
The new facility will be very similar to one NHanced already has in North Carolina, Patti said, but will have a significantly larger capacity. That space will allow them to better serve their growing customer base that needs thousands to tens of thousands of parts.
The production will also be different from the Crane operation, which Patti said is focused on older technology and simpler chips. The Bloomington location will capitalize on the assembling and packaging needs their clients are looking for, he said.
Amid the Crane expansion, Patti found the largely unused Cook building with a clean room, and it meant his company did not need to wait for a factory to be built. It also is a few hours from home base in Chigao and just up the road from Crane.
The location is planned to be a 24/7 operation, adding new shifts as equipment is installed and people are hired.
“It’s something that we could finish outfitting and move into in a matter of months, rather than waiting another two years to get into a factory—because I have customers that need capacity now,” he said. “It was the right place, right time.”
Since the industry often deals with price tags in the billions, Patti said advanced packaging lowers the barrier to entry for smaller companies and startups. It will result in more innovation and better addressing the needs of the market, he said.
“With advanced packaging, you can get those kinds of benefits in terms of speed and power and performance by assembling existing chips in a lot of cases, or lots of small chips together,” he said. “You can do it for, instead of $2 billion for the design, maybe it costs you $2 million for the design.”
The facility could also be home to startups in the industry as well, Patti said, which could make it more cost-effective for innovation and developments in a tight industry.
“I believe that some of those semiconductor companies are going to want to locate next to the factory,” he said. “And if the factory is in Bloomington, we are going to attract that kind of halo of other new semiconductor companies that are based on advanced packaging, and utilizing that.”
The region and state are also supportive of the venture. The state has provided incentives for the Crane operation, and Patti said the company is seeking similar discussions now. Monroe County also approved a 10-year tax abatement for all of the personal property taxes.
Filling a gap in the local economy
A major benefit to NHanced’s expanded presence in Indiana is the workforce being developed in the state, Patti said. Universities like Indiana University, Purdue University and Rose-Hulman Institute of Technology are producing thousands of engineers into the workforce, but Patti said they often must leave Indiana to find jobs—something he had to do when he graduated from Rose-Hulman.
While the current estimate is about 250 jobs created within five years, Patti said that number is conservative, and he could easily see about double by 2029. Annual salaries are planned to average about $100,000.
Outgoing Bloomington mayor John Hamilton told Inside INdiana Business last month that the city should seek to fill a gap and diversify its economy with more companies between 50 to 500 employees. A major focus of the previous administration and the larger region has been to increase wages as well as to retain and attract highly skilled workers to the area. The median household income in the city is $46,543, according to 2018 to 2022 Census data.
Bloomington has a number of employers outside the university, including Catalent, Cook and Baxter. When asked if NHanced could join them as a major local employer, Patti said that’s the plan.
“I think it’s a good fit for the community with the opportunities that are brought and the economic stimulus for the scale of the operation,” Patti said. “It outweighs many other industries when it comes to wages and compensation.”
He said the company has been working with Vincennes University and Ivy Tech Community College to create a curriculum that matches their engineering needs. When the Bloomington location is up and running, he expects to do similar workforce training.
IU also announced in October plans to invest $111 million into new faculty, facilities, equipment and strategic initiatives focused on advancements in microelectronics and nanotechnology.