Building a New Industry: The Trends That Defined 2024

News out of the U.S. industrial sector over the past year has been largely dominated by the imperative to establish a complete domestic industry for semiconductor manufacturing and sustainable energy production. Both initiatives have been designed to reduce U.S. dependence on foreign powers, particularly China. Each of these ambitions is equally bold and has required significant action at federal, state, and local levels to allocate resources and attract the investors needed to rapidly build and expand these industries. 

But building semiconductor fabs, solar panel plants, and utility-scale energy installations from the ground up demands more than just a plot of land and a willing general contractor. These unique industrial operations require greater capacity from utilities providers, tax incentives to alleviate the high costs associated with these projects, and capable design, engineering, and construction partners who can help new businesses not only navigate the challenges of executing large-scale projects, but come out the other side with a competitive advantage in an emerging market. 

Site Makes Right 

The first challenge of building a manufacturing facility for advanced technologies such as semiconductors, batteries, and solar panels lies in locating a site with the civil infrastructure and community resources to meet the plant’s many needs: 

Power—An average semiconductor fab uses enough electricity per year to power 50,000 homes, and electricity can account for as much as 30% of its operating costs. For communities with grids unable to fully support these needs, owners may want to explore the addition of on-site or rooftop solar panels. 

Water—Fabs and solar module plants require an equally astounding volume of water—an average of 4 million gallons each day. Much of this is used to run ultra-pure water systems that clean silicon wafers at the micron level. A municipality that cannot easily meet a fab’s water requirements is an obstacle not easily overcome. 

Wastewater treatment—Creating silicon wafers involves volatile chemicals and hazardous waste that must be mitigated through wastewater treatment. Should local authorities be unable to process a plant’s daily wastewater, the manufacturer may secure additional incentives in exchange for upgrading or expanding these facilities. 

Skilled labor—Building a world-class fab or battery plant will avail you nothing if you can’t staff it. Such facilities must be located near a population center that offers a skilled talent pool and the educational resources to prepare the next generation of labor. 

Transportation infrastructure—Advanced technology manufacturing plants can employ hundreds or even thousands of workers. Surrounding roads must be designed to support the increased load from commuting workers and supply trucks and be well maintained. 

Receptive community—When starting a project, owners must seek community input and develop creative ways to meet its needs. Designing solutions to reduce carbon footprint, mitigate hazards, and minimize disruption can demonstrate an owner’s commitment to cultural and environmental preservation. 

Proximity to suppliers—Newly established businesses should develop a diverse supplier network and work to lock in favorable long-term contracts with key supply partners. When possible, owners should consider co-locating with these suppliers as well as building near critical trade hubs that can shorten supply lines. 

Byte: Every industrial operation has criteria for site selection, but advanced technology manufacturers must be assured that a preferred locale will support their immediate needs as well as their long-term growth strategy. An experienced firm in design, construction, engineering, and real estate development can provide peace of mind and take the guesswork out of finding the perfect site. 

Implications for 2025 

The practical realities that make site selection difficult for advanced tech manufacturers aren’t likely to change much in the new year, despite an incoming Republican presidential administration and forthcoming changes to U.S. policy. Satisfying site requirements in 2025 will continue to be a significant challenge. Partnering with an experienced design-build team with a strong network of suppliers and subcontractors can assist in this process. 

For more on the challenges of building a semiconductor fab, read the complete article on gray.com.  

The State of FDI 

Figures for FDI in the U.S. over the last year paint a rich picture. In that time, the U.S. brought in more than $5.25 trillion in cumulative investment, leading the world by a wide margin. 

As much of the world emerged from the throes of the pandemic, the U.S. reclaimed the top spot from China as the world leader in FDI inflows, according to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report. UNCTAD’s report showed the U.S. in the lead for the second consecutive year, while Kearney had the U.S. in the top spot for the 12th straight year in its FDI Confidence Index. 

Of the top 20 countries in FDI position in the U.S., Japan ranked highest with $712 billion, followed by the U.K. with $663 billion, and the Netherlands in third with $617 billion. Canada was fourth, followed by a nearly complete list of Western European countries. Mexico appeared in the final slot of the top 20 with $33.79 billion. 

It’s no secret why foreign investors look to the U.S. for business opportunities. In addition to housing the world’s largest consumer market, the U.S. boasts a robust finance sector with a variety of sources for capital, solid infrastructure that allows fast access to outlying regions, and quality vocational programs and higher education institutions. 

Moreover, the U.S. has passed major legislation in the CHIPS & Science Act and Inflation Reduction Act that paved the road to FDI with tax breaks, grants, grid incentives, and fast-track permitting for funded projects. The result has been an influx in advanced tech projects over the last two years—a big step forward in moving the entire supply chain for manufacturing semiconductors, solar modules, batteries, and wireless technologies stateside. 

This electrifying development has been driven overwhelmingly by one project-level trend known for its speed, adaptability, and collaboration: design-build delivery. 

What makes design-build especially relevant to the emerging advanced technology industry? Unlike other manufacturing segments, solar, semiconductor, and battery haven’t had a century to evolve and refine products and processes and must advance technology on a condensed timeline. Manufacturers working to achieve economies of scale must develop materials and processes that can increase cell efficiency and lifespan while reducing the time and cost of unit production. Design-build can help solar providers claim these advantages. By shortening a project’s timeline, the design-builder ensures a quicker production start. Continued interplay between architects, engineers, and construction teams allows owners to make late-stage design changes to incorporate fresh technological advances into production processes. The flexibility to innovate even as the project is underway guarantees that the facility will maintain its relevancy and commercial viability for much longer.

Click here to learn about Gray’s role as a design-builder for the U.S. solar industry.

Looking Ahead 

Even so, uncertainties remain for inbound FDI for the next four years. The incoming Trump administration has already signaled that it is keen to discontinue government incentives and funding provided by the IRA and other Biden-led economic legislation. Yet this legislation has already made an impact at the state and local levels, attracting investors, new projects, and economic prosperity that have that have garnered bi-partisan support. As projects begun two years ago start to come online and elected representatives point to these as indicators of economic health and successful policy, it may be difficult to reverse course. We’ll be keeping close watch of the latest UNCTAD and Kearney reports and will keep you posted on changes as we move through 2025. 

Learn more about what’s driving inbound FDI in our recent article on gray.com.

More Control, Better Results 

We all feel pressure to perform. Likewise, we can all relate to the stress of staking your success on others’ abilities. Time-honored sayings such as “If a job’s worth doing, it’s worth doing well” and “If you want something done, you’ve gotta do it yourself” underscore these tensions. 

Construction firms with self-perform capabilities can alleviate this pressure and serve as a great asset for owners and project teams alike.  

One of the chief benefits of selecting a self-performing general contractor is increased control over a wide range of project elements. Self-performing firms can eliminate the need to accommodate third-party subcontractors on issues such as cost, schedule, labor capacity, and materials, allowing the general contractor to operate with greater market accuracy and higher margins. Every opportunity to keep decision-making and execution in-house is one fewer chance for unforeseen complications. 

Greater control over cost and schedule 

Hiring your own team members and avoiding lengthy bidding processes all but guarantees a faster start to your project. With quicker mobilization, a shorter supply chain, a simplified reporting structure, and vital personnel already integrated, general contractors who self-perform work have the purchasing power and scheduling initiative they need to get their projects off the ground without making compromises. 

Higher operational efficiency 

Teams that have not just gained experience, but gained experience together have a built-in advantage in completing high-quality work on schedule. When project management and the craft labor force develop their relationship over the course of multiple projects, expectations are clearer, the hierarchy is more fully understood, and there is greater uniformity in how corporate policies and procedures are applied on a jobsite. 

More consistent safety performance 

One of the most complex aspects of construction work is ensuring that work has been planned, communicated, and prepared in a manner that minimizes risk and keeps the jobsite accident-free. A self-perform team will have considerable experience working with designers, as well as project and site managers; as such, these teams will be well-versed in the company’s safety requirements and more likely to take the appropriate measures to complete work safely. 

A Solution to Construction Labor Shortages in 2025 

Design and construction firms with self-perform capabilities also provide a built-in solution to difficulties in procuring and retaining labor. Demand for new construction is set to remain high in 2025, but persistent labor shortages throughout the industrial sector can make it difficult to secure key trade workers and achieve liftoff. 

Self-perform units help staff critical trades such as concrete, steel, and utilities infrastructure. By finding, training, and developing an effective craft labor force over months or years, firms can start each project with a proven team that’s fully bought in to company policies and procedures. This enables project managers to schedule work activities with confidence. An expert self-perform team not only reduces risk, turnover, and the potential for mishaps but also directly benefits customers with streamlined work that’s completed more efficiently. 

So why isn’t everybody self-performing work? It takes considerable resources to build a self-perform unit: a wealth of highly skilled labor, developed network of suppliers, sufficient stock of vital equipment, administrative personnel, and more. For many general contractors, the benefits of building a self-perform team don’t outweigh the barriers to entry. Those that overcome these obstacles in 2025 stand to increase capacity, bid on more projects, and become more competitive in the marketplace. 

Byte: General contractors with the resources to build a self-perform arm can effect a three-fold labor solution: reducing the time and effort to assemble the team; building capacity for future projects, and developing a reputation as a reliable and capable partner. 

Want to learn more about how self-perform work can streamline and enhance your project? Check out the full article on gray.com.