In 2018, Silicon Valley-based KLA Corporation was deep in the search process for a location for its second headquarters. However, they were looking for more than just building space – they needed an environment with robust business resources and incentives, a high-quality talent pool and pipeline and top tech companies in need of semiconductors. Out of 350 competitors, KLA chose Ann Arbor, Michigan, and over the next few years, the organization would build its 230,000-square-foot campus and begin its campaign to recruit both in-state and out-of-state talent to join the organization. Nearly five years after the original plans to build a second location were announced, how effective have KLA’s expansion plans panned out amid a pandemic, labor shortage and shifting economy? The answer, as you can imagine, is one of success, created through a combination of state and federal grants, strategic partnerships and Michigan’s growing emphasis on semiconductors.
One of the key considerations for KLA when deciding where to set up its second headquarters was each state’s business resources and incentives, and Michigan made a strong pitch. Through a partnership with the Michigan Economic Development Corporation’s Michigan Strategic Fund, KLA secured $1.5 million in performance-based grants, which would, in turn, help bolster the state’s position in semiconductor manufacturing and development. Building upon the state’s resources is the CHIPS and Science Act, bipartisan federal legislation that will support Michigan’s supply chain, auto industry and, of course, high-tech companies like KLA.
"Our partnership with the Michigan Economic Development Corporation has been instrumental in enabling KLA to serve our global customer base from the new headquarters and benefit from the impressive engineering talent and business culture that Michigan offers,” said Rick Wallace, president and CEO of KLA. “KLA has been part of the most significant technological breakthroughs throughout its 45-year history. As we continue our journey at the forefront of semiconductor technology, we’re thrilled that Ann Arbor and the state of Michigan are now part of our story.”
KLA saw a clear future in Michigan that could meet the organization’s workforce and sales objectives. The state has established itself as having a top 10 semiconductor workforce, with projected job growth of more than 11% over the next five years, according to the SEMI Foundation. Through strategic partnerships, KLA was able to closely integrate itself into both the talent pipeline, through a partnership with University of Michigan, and a sales pipeline with companies that needed KLA’s highly-desired semiconductors – most notably, the state’s top automotive industry.
By the time the Ann Arbor headquarters opened in November 2021, the team already had a locally-based leadership team alongside a 300-person-strong workforce. The team continues to grow, with its current workforce around 400 employees and plans to hire for over 200 positions by the end of 2022. This ongoing growth is projected for years to come, with plans to house nearly 1,000 employees at the Ann Arbor headquarters. This long-term goal is only achievable thanks to a pipeline of top-university talent, Michigan-based business leaders and an ever-growing semiconductor ecosystem.
There are dozens of ways that success can be measured when expanding your enterprise, but for companies that are navigating the current business environment, it is imperative that they are able to check the business resources, talent and business outcomes boxes when assessing where to set up shop. For KLA, the decision was clear – they were moving to a state that valued their business and, in turn, provided the resources, funding and incentives to build the foundation. As KLA assessed the talent landscape of Michigan, it was clear that they would have access to top universities and a highly-skilled workforce, which would be key to their hiring goals, both in the short- and long-term. KLA’s future in Michigan is bright, with top automotive, healthcare device and technology manufacturers at their fingertips. Their decision follows a trend that can be replicated by other high-tech companies as they look to build new headquarters and manufacturing hubs. Through case studies like KLA, it is clear that Michigan has solidified itself as a tech-forward state with the partnerships, workforce and top companies needed to be top contender for business attraction.
For more information, including resources and support for your business, visit MichiganBusiness.org.