Gov. Josh Shapiro announced a $2.5 million state grant on Nov. 1 to support the development of a Lehigh Valley Semiconductor Center in Bethlehem as part of nearly $600 million in community and economic development grants across Pennsylvania. 
The Semiconductor Center project grew out of the regional Technology Hub effort undertaken in 2023 by a consortium of semiconductor companies, economic development organizations, local governments, and educational institutions as part of the federal CHIPS and Science Act.
“While the Lehigh Valley was unsuccessful in winning the highly competitive federal government technology hub designation, a powerful coalition of entities was brought together and unleashed,” said Don Cunningham, President & CEO of Lehigh Valley Economic Development Corp. (LVEDC).
“We rediscovered the strength of the Lehigh Valley in having the existing companies and assets to grow its semiconductors and related technology sectors," Cunningham said. "Governor Shapiro and his economic development team were early supporters of helping to grow this sector in Pennsylvania and the Lehigh Valley. We are grateful to them for their early support for this important center.”
The aim of the new center is to grow early-stage semiconductor and technology-based companies in a partnership with higher education, bringing students and faculty together with entrepreneurs and early-stage companies.
While several locations are being explored for the Center, the state grant was awarded from a budget line item designating south Bethlehem as its location. The Redevelopment Assistance Capital Program, or RACP, grant was supported by state Sen. Lisa Boscola, state Rep. Steve Samuelson, Northampton County Executive Lamont McClure, and Bethlehem Mayor J. William Reynolds.
In addition, Lehigh University, LVEDC, and Ben Franklin Technology Partners of Northeastern Pennsylvania advocated for the award and are part of the consortium working to develop the Center. One of the primary locations targeted for the project is the former IQE Semiconductor facility at 190 Technology Drive on former Bethlehem Steel land near the Fahy Bridge. The 48,000-square-foot building contains cleanrooms necessary for semiconductor production, labs, and offices.
“Every day, my Administration is focused on getting stuff done for the good people of Pennsylvania – and we’re proud to support hundreds of projects across the Commonwealth that will create jobs, grow our economy, and deliver for our communities,” Shapiro said in a news release on Nov. 1 announcing the grant awards.
The $2.5 million for the Center is one of 26 projects in the Lehigh Valley that received a total of about $32.7 million from the RACP program. Some of the other economic development or high-profile projects in the region that received funds are the redevelopment of the former Dixie Cup building in Wilson Borough into housing ($500,000); equipment for steelmaker Lehigh Heavy Forge Corp. in Bethlehem ($1.4 million); redevelopment of the Allentown Metal Works for building material manufacturing ($1.5 million); site preparation for an indoor farming facility in East Allen Township ($3.5 million); and the renovation and reuse of the former Bethlehem Steel General Office building ($250,000).
In addition to supporting RACP funds for the Center, state Rep. Samuelson, who chairs the Pennsylvania House Budget Committee, has advanced legislation to allow smaller, early-stage semiconductor companies to qualify for state tax credits under the PA Edge tax program developed to attract large manufacturing fabs.
The Lehigh Valley is recognized as the original “Silicon Valley” because of the presence of Bell Labs and Western Electric. In 1951, the company’s location on Union Boulevard in Allentown was the first in the world to mass produce transistors, the forerunner to semiconductors. Today, more than 30 semiconductor and technology companies operate in the Lehigh Valley, including global brands Intel, Broadcom, Coherent, and Infinera, along with startups such as iDEAL Semiconductor and AAYUNA. Infinera recently announced plans to build a new facility in Bethlehem, with funding from the CHIPS and Science Act.