Feb 5, 2024 - News

Oregon's semiconductor industry scales up with investment

a microchip with a money symbol cut out of the middle

Illustration: Tiffany Herring/Axios

Oregon's semiconductor industry is expected to expand exponentially in the coming years thanks to millions of dollars in state and federal investment.

Why it matters: Officials anticipate the new funds — coupled with a new set of tax credits — will stimulate the state's already established industry by creating more than 6,000 permanent jobs, potentially bringing in a $40 billion windfall.

State of play: The second company to receive federal funding as part of the CHIPS and Science Act of 2022 — the Biden administration's bid to compete with China on manufacturing — is Gresham-based semiconductor company Microchip.

  • It will receive $72 million to expand its manufacturing facility just outside of Portland, an $800 million initiative that was already underway.
  • Industry experts predict that's just the tip of the iceberg of the potential funds that could come pouring into the state in the near future.

What they're saying: Mike Wilkerson of ECONorthwest told OPB that for companies that felt like they weren't competitive, the funding is an extra incentive "tipping the scale a little bit so that they can make the decision to invest in or expedite the timeline."

  • Wilkerson said Oregon's semiconductor industry will likely see significant dividends from all of this investment in the next decade.

Flashback: Last year, as part of Senate Bill 4, lawmakers approved $240 million in grants and loans to lure semiconductor companies to conduct research in Oregon.

  • The bill also granted Gov. Tina Kotek the authority to shift urban growth boundaries for new or existing businesses looking to build or expand facilities.

Zoom in: In January, Kotek announced the first 15 local companies set to receive awards. The biggest household name featured is Intel, specializing in manufacturing and chip design.

  • It's set to receive $115 million from the state — the largest sum for any company on the list.
  • The money will go toward growing its Washington County campus, which is already the largest site in the company's portfolio. It's also in the process of constructing a $20 billion plant outside of Columbus, Ohio.

Meanwhile, Hewlett-Packard's Corvallis-based campus will receive $9.5 million. The company had previously scaled back chip production at the site, and the new cash injection aims to bring jobs back.

  • Microchip also scored $11 million from the state initiative (on top of the $72 million from the Biden administration).
  • As part of the award agreement, the company will work with Portland Opportunities Industrialization Center and Rosemary Anderson High School to create a student internship and apprenticeship pipeline.

The bottom line: Oregon's semiconductor industry already boasts 15% of the country's semiconductor workforce, and with more investment it's looking to take on an even bigger slice.

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