How Oregon's semiconductor industry is faring
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Illustration: Aïda Amer/Axios
Following a series of setbacks — manufacturing layoffs, disappointing sales and missed opportunities for federal investment — Oregon's semiconductor industry finds itself in a period of uncertainty.
Why it matters: The semiconductor industry is a major economic driver for Oregon, and although the state has 1% of the country's population, it had 15% of its semiconductor workforce as of 2022.
The latest: Last week, the Biden administration chose Arizona for its third and final advanced packaging research and development site, funded by the CHIPS and Science Act — the nation's bid to compete with China on technology manufacturing.
- Oregon officials, including Gov. Tina Kotek and former Intel CEO Pat Gelsinger, made several petitions to the administration to bring a research hub here.
- Kotek even proposed to shift urban growth boundaries to accommodate a new facility — a move she walked back last month when hopes started to fade.
- New York and California will host the other two CHIPS R&D flagship facilities.
What they're saying: "It has been a blow, for sure," Tom Weller, who leads Oregon State's school of engineering and computer science, told Axios. "One of the biggest concerns is that without this opportunity, will attention and mind share go elsewhere?"
Meanwhile, in December, Microchip shelved its $162 million deal with the federal government to expand its Gresham-based manufacturing factory shortly after furloughing local workers due to a steep decline in sales revenue.
- "Probably, by the time I get my arms around it, we're into the new administration," Microchip CEO Steve Sanghi said about whether the company will pursue the deal again in the future, per Bloomberg.
- Intel, one of Oregon's largest employers, also faced a tough 2024. Despite securing $1.9 billion in federal subsidies, the chipmaker laid off 1,300 workers at its Hillsboro factories — the largest site in the company's portfolio — to cut costs.
Yes, but: It's not all bad news. Just this week, HP finalized a $53 million deal with the U.S. Commerce Department to invest in its Corvallis facilities.
- The new cash injection aims to create 150 temporary construction jobs and 100 full-time engineering roles.
- Plus: State initiatives, like 2023's Senate Bill 4, included over $240 million in incentives and awards for semiconductor projects in Oregon, some of which will see fruition this year.
The bottom line: In the last two years, the state has seen greater collaboration between state agencies, universities and businesses in areas like workforce development and economic planning. Because of that, Weller said he's optimistic that Oregon will remain a global leader in the industry.
- "We're going to be much better prepared to react quickly and proactively to opportunities in the future," he said.