Oregon Cities

Oregon’s bid to juice semiconductor activity has paid off, governor says

Scientist

Employees in cleanroom “bunny suits” working at Intel’s D1X factory in Hillsboro, Ore., in this handout photo. Intel is set to receive $115 million in state funding.

Walden Kirsch/Intel Corporation / Walden Kirsch/Intel Corporation

Gov. Tina Kotek will dole out $240 million set aside to boost Oregon’s semiconductor industry to 15 Oregon semiconductor facilities under tentative plans released to lawmakers Thursday.

The planned spending is light on details, but Kotek’s deputies say that the bipartisan effort approved by lawmakers earlier this year to juice the industry has shattered expectations. In total, companies applying for the money are touting more than $43 billion in investment in the years to come, and 6,300 jobs.

“We expect to see much higher investment than we could have imagined,” Vince Porter, Kotek’s policy advisor on economic development, told delighted lawmakers on a House panel.

Porter said his office expected the litany of state incentives approved in April would yield between $5 billion and $10 billion total investment. But he cautioned that the enormous amount of forecast cash could end up being less than $40 billion when the realities of a project come into focus.

The list of potential awards lays out huge disbursements to some of the state’s premier tech companies — including almost $10 million for Hewlett-Packard’s Corvallis facility, $39 million to Hillsboro-based Jireh Semiconductor Incorporated, $11 million for Microchip Technology’s outpost in Gresham, and a total of $115 million for Intel’s operations in Washington County.

“When we look back a decade from now, I truly believe we will be proud of this effort and the positive impact it will make for Oregonians and our country,” Kotek said in a statement.

What exactly taxpayers are footing the bill for is less clear.

Oregon lawmakers approved the $240 million outlay during this year’s legislative session, as the state raced to compete for $52 billion in federal cash made available by the 2022 CHIPS and Science Act.

Under Senate Bill 4, grants and loans out of the so-called Oregon CHIPS Fund were meant to help tech companies preserve or expand their operations in Oregon by purchasing or readying land for new construction, building out facilities on existing property, or investing meaningfully in new research. Companies were required to show their planned expansions could meet benchmarks for generating state tax revenue or establishing jobs.

SB 4 included $190 million for those purposes. The Legislature approved an additional $50 million at the end of session, though lawmakers must vote to release that money. Receiving a piece of Oregon’s funds was contingent on companies also applying for some of the federal money.

In the end, Oregon received 16 applications for its semiconductor money, totaling $504 million in requests, Kotek’s office said. The state turned down just one applicant.

But the details of what those companies are proposing has been a closely guarded secret. The governor’s office has said the proprietary information included in applications for state funding is confidential, so it’s not clear what semiconductor firms have in the works.

Intel, the largest recipient of Oregon’s semiconductor fund, has indicated possible plans to vastly expand its Washington County operations in filings with the state, but has kept most details close.

Under direct questioning about the Intel funding Thursday, Porter cited nondisclosure agreements that prevented him from discussing specifics.

“We are extremely excited about the project Intel is working on,” Porter said, pointing to public information that has been circulated about the company’s expansion plans.

In Eugene, the state is considering awarding $19 million to Stratacache, an Ohio-based firm that makes video displays. In 2020, the company purchased a long defunct Hynix semiconductor factory in the city, pledging to bring jobs and investment.

The governor’s office did not respond to an inquiry about specific projects Thursday. Porter suggested it was unusual to even release the names of companies receiving money to lawmakers.

Porter cautioned lawmakers that the awards Kotek has approved are contingent on successful contract negotiations and that some could change. He also said a second round of funding will depend on lawmakers releasing the extra $50 million they approved this year.

Under SB 4, Kotek was given unprecedented powers to expand the urban growth boundaries that dictate where development can occur around cities in the state. The mechanism was included in case such an expansion was necessary to spur a major project.

But Kotek’s office did not offer any suggestion Thursday that such an expansion was in the works. Porter told lawmakers that Oregon’s decades as a hub of semiconductor activity has put it in a position to leverage its $240 million far more efficiently than other states. Semiconductors are the state’s largest export, and Oregon plays host to 15% of the industry’s workforce nationwide.

“One thing that we should celebrate about Oregon is we’re working with existing companies,” Porter said. “We’re certainly making a very large commitment… it did not require us to go as big as if we were starting from scratch.”

A full list of awards being contemplated by Kotek’s office:

  • Intel Corporation, Hillsboro – $115 million
  • Jireh Semiconductor Incorporated, Hillsboro – $39 million
  • Lam Research Corporation, Tualatin – $22 million
  • Stratacache, Eugene – $19 million
  • Analog Devices, Beaverton – $12 million
  • Microchip Technology, Gresham – $11 million
  • Hewlett- Packard, Corvallis – $9.5 million
  • MGP Engineering, Redmond – $3 million
  • Siltronic Corporation, Portland – $2.2 million
  • Tektronix Component Solutions – $2 million
  • Tosoh Quartz, Portland – $1 million
  • Rogue Valley Microdevices, Medford – $250,000
  • Amorphyx, Corvallis – $250,000
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