Putting More Chips Into The Silicon Heartland

Someone called central Ohio the “Silicon Heartland” in 2022, after Intel announced plans to build a huge semiconductor manufacturing complex in Licking County, just to the northeast of I-270, the ring highway that encircles Columbus. Recently, the Silicon Heartland got news of another big tech-related investment: Google disclosed that it is spending $1.7 billion this year to complete two new data center campuses, in Columbus and Lancaster, and to expand an existing Google facility in New Albany.

The changes these developments will bring to central Ohio will be striking. The Intel site in southwestern Licking County is, by any definition, enormous. The Google facility in New Albany that will be expanded is located nearby, in New Albany and is similarly vast, encompassing more than 400 acres. New Albany also is home to a Meta data center and an Amazon fulfillment center.

Ohio’s Lt. Governor Jon Husted, who participated in the Google announcement, said that Ohio is establishing itself as “the tech capital of the Midwest.” I’m sure that our Midwestern neighbors might challenge that statement, but it’s not hard to see why Ohio is an attractive place for investment in massive tech complexes. Those facilities need cooling water, electricity, and employees–all of which Ohio can offer. The availability of copious amounts of water and reliable electrical power distinguish the Buckeye State from other potential locations where power grids are taxed and water is in short supply.

Of course, Ohio will need to pay attention to its infrastructure to make sure that it can continue to offer those crucial building blocks of tech development. We probably don’t have to worry about water, thanks to Mother Nature, but we’ll need to make sure that we continue to upgrade the power grid and increase its capacity as new loads come on line. We’ll also want to make sure that Ohio continues to be seen as an attractive place for high-tech employees to live and work.

Not The Next Big Thing

Economic theory teaches that stock prices usually are brutally honest. When investors are deciding whether to put money into a company or venture, social niceties typically go out the window, and investors–particularly the professional money managers–take a hard look at the company’s products and business plan and make an unvarnished judgment about whether they will succeed or fail. If the product line looks like a winner, buy decisions will follow; if products and sales are disappointing, the sell sign flashes.

The stock market’s honest judgment is saying something is wrong at Meta, the parent company of Facebook, Instagram, and WhatsApp that is trying to introduce us to the “metaverse”–the virtual world pictured above. And the consequences have indeed been brutal: Meta closed at $323 a share on February 2, 2022 and $97.94 yesterday. Yesterday alone, the stock price fell $31.88 a share, losing 24.56 percent of its value, and the stock information page linked above says Meta’s “technicals” put the stock down into the “strong sell” category. In short, if you’re a shareholder in Meta, you’ve had a bad year, and apparently some investors have decided enough is enough.

Why has this happened? Some observers believe that Mark Zuckerberg, the Meta kingpin whose metaverse avatar is seen above, has unwisely focused all of the company’s attention on the metaverse, rather than protecting and nurturing the company’s core assets, like Facebook, which are facing their own problems. And the effort to summon the future in the form of the metaverse hasn’t gone well. So far, at least, people haven’t jumped at the chance to don virtual reality headsets, create an avatar of themselves, and interact with other people in interactive virtual spaces. The fact that the headsets are expensive–Zuckerberg recently introduced a new headset that goes for $1,500 a pop–and the virtual reality graphics don’t look all that compelling isn’t helping. One of the recent developments announced by the company, that metaverse characters will now have legs, sounds like a funny parody of a bad TV commercial. “Metaverse characters–now with legs!”

Meta’s struggles reveal a basic truth about technology companies: sometimes the tech product is a huge hit, but many times it isn’t. For every smartphone or personal computer that are wild successes, there are other devices or concepts that crash and burn. And it looks like the metaverse that Meta had invested billions in developing might just fall into the latter category. A recent article in Forbes expressed the point this way: “The entire problem with Mark Zuckerberg’s fascination with the metaverse is that he’s trying to force a sci-fi reality to happen long before the rest of the society wants or needs it to actually exist.”