REPORT TO COUNCIL
SUBJECT
Title
Approve Contract Amendment with Western Digital for Semiconductor Training and Employment Services
Report
BACKGROUND
The semiconductor industry represents an important sector in the NOVA Workforce Services (NOVA) region that impacts the local economy. Today, it faces unique challenges in recruiting and retaining qualified talent, which presents barriers for the industry to grow. The importance of expanding semiconductor manufacturing in this country has been identified by the federal Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 as pivotal to economic competitiveness and survival. In addition, increasing equitable access to employment in the high-wage semiconductor industry will ensure a diverse workforce and business ecosystem.
For many years, NOVA has been challenged to promote access for historically marginalized communities to the technology sector. It has also been challenged to support companies train their employees to move into advancement opportunities within the company. In response, NOVA contracted with Western Digital to launch an innovative program to attract, develop, and retain diverse talent in the semiconductor industry. The contract totaled $475,000 for the period of September 11, 2023, through September 10, 2024. The City Council approved this contract agreement at its August 29, 2023, meeting (RTC No. 23-0773).
The program included comprehensive employment and training for Western Digital's growing wafer fabrication facilities' operations, systems, maintenance, and process engineering areas. This entailed training cohorts for both incumbent employees and incoming employees from nontraditional backgrounds, including veterans. In addition, full-time employment was made available to participants. The program’s accomplishments included training for nearly 200 Bay Area manufacturing employees with more than 90,000 training hours; developing Salute to Service, a veteran and military hiring initiative with a dedicated website and career outreach events; hiring a program manager and outreach specialist who had served in the armed services; establishing a U.S. Department of Labor registered apprenticeship program, the first semiconductor apprenticeship program in California; and, through a partnership with SEMI Foundation, hosting tours for students and teachers from local schools.
Founded in 1970, Western Digital, a data infrastructure and semiconductor manufacturing company, is headquartered in San Jose. It employs approximately 8,000 workers nationwide, 7,000 in California. Western Digital is the only U.S. incorporated hard-disk drive company and the world's only manufacturer of heads for tape drives, which are made in California. Recognizing the talent shortages in the company and industry, Western Digital was uniquely positioned to design this innovative program. It is the only known program of its kind in the NOVA region. In addition, the program aligns with NOVA's priorities of assisting disadvantaged workers access the technology-driven economy and supporting companies to retain and advance their workforce.
EXISTING POLICY
Council Policy 5.1.1: Socio-Economic - Goals and Policies: Education and Training Goal 5.1F: Provide job training and employment services, within constraints of operative Federal regulations and available Federal funding, to address the locally-determined employment and training needs of economically disadvantaged residents and others with special needs.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental, organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
Demand for talent in the semiconductor industry is expected to continue in the coming year. This challenge is apparent in the number of open job requisitions. Today, Western Digital reports 70 open job roles consisting of operator, technician, and engineering positions. As indicated by Western Digital, the market demands drive a tangible need for a sustainable and focused manufacturing recruiting and training initiative. To continue to support the semiconductor industry and workforce, staff is recommending a contract amendment with Western Digital to extend the term from September 11, 2024, through September 10, 2025, and to add an additional $350,100 to the agreement.
This year’s program will build on the successes achieved this past year. Services will encompass a more extensive outreach to military and veteran talent. In addition, it will entail a continuation of the specialized training for incumbent workers in the wafer fabrication area. Services will include:
• Training in a wide range of critical technology, including Panalytical X-Ray Fluorescent Systems Large Spot, Anaconda licensing that will be a continuation/progression of the Udemy Advanced Analytics Wafer Ops training offered previously, Los Positas College Vacuum Technology workshop, and TEL Pro Training. Over 150 workers are expected to be trained.
• Veteran’s Program Specialist and recruiting support that will continue in the coming year to support veteran’s hiring initiatives and career events, registered apprenticeship program, and liaison with manufacturing leadership.
• Hire Heroes USA, a new partnership that will enhance Western Digital’s reach within the veteran community.
• SEMI Foundation, a continued partnership to leverage SEMI Foundation’s new collaboration with Vet S.T.E.P. program to recruit soon-to-be-separating military personnel to opportunities at Western Digital.
The NOVAworks Workforce Board supports the continuation of this program through Western Digital.
The draft amendment to this agreement between the City and Western Digital is attached to this report (Attachment 1).
Pursuant to federal law (29 U.S.C. section 3122), the City Council is the “chief elected official”, and the “local grant recipient” and “fiscal agent” for NOVA and the Local Workforce Development Board. In filling these functions, City Council’s past practice for contracts exceeding $250,000 has been to approve the award of the contract and authorize the City Manager to execute the contract.
FISCAL IMPACT
The source of funds for these services is WIOA funds. As such, WIOA funds should sufficiently cover all anticipated obligations of day-to-day program operations. If WIOA funding is cut, then program services will be proportionately reduced.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Approve the contract amendment for semiconductor training and employment services and authorize the City Manager to execute an amendment agreement with Western Digital in an amount not to exceed $350,100, with the contract term starting September 11, 2024, and ending September 10, 2025.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
A check or “Y” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_X_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract
___ Labor or personal employment contract
___ General policy and legislative actions
Staff [only one Deputy City Manager or Assistant City Manager review needed, remove the other two]
Prepared by: Eileen Stanly, Administrative Analyst
Reviewed by: Marléna Sessions, Director, NOVA Workforce Services
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Draft Amendment to Agreement with Western Digital for semiconductor training and employment services