Task force outlines path for Oregon semiconductor competitiveness

By Kate Davidson (OPB)
Aug. 17, 2022 6 p.m. Updated: Aug. 18, 2022 6:50 p.m.

Chipmakers are preparing to spend billions in federal funds. Oregon business and political leaders want the state to benefit.

An Intel employee in a clean room "bunny suit" at Intel's D1X factory in Hillsboro, Oregon, which was recently expanded. State leaders hope billions of dollars in federal support for the industry will bring more 
 investment to the state.

An Intel employee in a clean room "bunny suit" at Intel's D1X factory in Hillsboro, Oregon, which was recently expanded. State leaders hope billions of dollars in federal support for the industry will bring more investment to the state.

Courtesy of Intel Corporation

The semiconductor industry is poised for a historic investment race in the U.S., driven by $52 billion in funding from the larger CHIPS and Science Act that President Joe Biden signed this month. A report released Wednesday warns Oregon could either compete in that race or fall behind.


The report from the Oregon Semiconductor Competitiveness Task Force calls for immediate action to preserve and grow the state’s semiconductor industry. That includes changes to land use, taxes and other incentives, workforce development and the implementation of environmental regulations.

“We’re releasing a battle plan for Oregon to build an even stronger chip industry that continues generating jobs here in the Silicon Forest and across the state,” said Democratic U.S. Sen. Ron Wyden at a press event accompanying the report’s release.

Wyden co-chaired the task force with Gov. Kate Brown and Portland General Electric president and CEO Maria Pope.

Oregon’s Silicon Forest hosts a significant concentration of chipmakers, including Intel, the state’s largest private employer with 22,000 workers in Washington County. In fact, Oregon is home to 15% of the country’s semiconductor workforce and semiconductors account for nearly half the state’s exports, according to the report.

But recent events have prompted soul-searching about the future of the chip industry in Oregon — a future the task force assembled to address.

Computer chips drive modern life, providing the brains behind everything from cars to washing machines and video game consoles. Earlier this year, amidst a global chip shortage, Intel announced it would invest $20 billion building chip factories on 1,000 acres in Ohio, similar to its plans in Arizona.

Oregon is the heart of Intel’s research and development operations, but it was never really in the running for the company’s new factories, or fabs. The state has nowhere near enough shovel-ready industrial acreage to house a mega-fab.

So now, the semiconductor task force wants Oregon positioned to capitalize on the forthcoming semiconductor spending spree. The authors predict it could bring tens of billions of dollars in investment to the state over the next decade, boosting tax revenues and creating jobs.


“We are truly in a 50-state race and we can’t miss any opportunities in the very competitive semiconductor industry,” Brown said Wednesday.

The CHIPS part of the massive CHIPS and Science Act provides $39 billion in direct support for companies that build or expand factories in the U.S. and $13 billion for semiconductor research and workforce training.

Two billion dollars of the research allotment will go toward establishing a National Semiconductor Technology Center. Intel has a proposal to establish an advanced lithography center, in Oregon, drawing on that funding.

The report identifies a range of barriers that could dissuade semiconductor companies from investing in Oregon, and proposes solutions of varying specificity.

The report calls for strengthening the talent pipeline with a broad range of educational investments and partnerships. It suggests ways the Department of Environmental Quality can improve communication with businesses as well as predictability in rulemaking.

Brown, who chaired the task force’s subcommittee on environmental regulations, said she plans to ask lawmakers for funding to increase staffing at DEQ, to speed up permitting.

The report also urges the state to both preserve existing tax incentives and create new methods of financial support, arguing that it’s more expensive to build and operate fabs in Oregon than in other states.

“Tax incentives alone are insufficient,” the report states, given the enormous expense of constructing and operating fabs. The task force calls for the expansion of forgivable loan programs, to help offset the cost of large construction projects.

Of course, new fabs aren’t possible without land.

Land use is an area of key concern to the task force — and likely a key sensitivity.

The group’s land use subcommittee could only find two development-ready industrial sites in the Metro region, totaling just 82 acres. “Notably,” they say, “there are no development ready sites of the size needed to attract a major semiconductor investment, or to support larger size suppliers.”

The land use committee plans to continue its analysis, with community input, and report back in the fall with a map of sites that could host semiconductor expansion “both inside and outside the Urban Growth Boundary.” One goal is to identify two sites, each 500 acres or more, that could accommodate large-scale projects.

“Moving forward, we have to quickly craft budget and legislative proposals to make the task force recommendations a reality,” Brown said. Her goal: to have a package of proposals ready for lawmakers and the next governor to review on the first day of the legislative session in 2023.