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Oregon Gubernatorial Candidates Debate Chip Industry and Business Environment: 'How to Keep Next Intel from Stuck?'

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Intel’s decision to build a multi-billion dollar manufacturing campus in Ohio sent alarm bells to Oregon earlier this year. The decision will be an issue in the November gubernatorial election.

Oregon, which has one of the highest concentrations of semiconductor jobs in the nation, will miss the barrage of new computer chip factories planned in states from Arizona to Indiana to New York. I’m in good shape. Manufacturers are responding to a global chip shortage that is hampering the production of everything from cars to consumer electronics.

Oregon’s three leading gubernatorial candidates addressed the issue in their first debate last month, agreeing the state’s next governor needs to get more involved in the chip industry. However, there are significant differences between the two perceptions of Oregon’s business environment.

Democrat Tina Kotek promised to prioritize workforce development, independent candidate Betsey Johnson accused the state of ignoring Intel, and Republican Christine Drazen lamented the state’s regulatory and tax environment.

“What can we do to keep the next intel stuck?” Drazan asked.

A severe shortage of industrial land in the Portland area is a central problem for the region’s semiconductor industry. The big chip makers want at least 1,000 acres of parcels for their “megafab” clusters. In Oregon, the largest parcel available near Portland is only 200 acres.

A new task force of government and business leaders is also examining other potential issues, including the state’s regulatory environment, workforce development, taxation and incentives.

The task force is expected to release its first report later this month and hopes to allow Oregon to pursue some of the new $280 billion in federal funding for scientific research and chip manufacturing.

In their recent debate, none of the candidates directly addressed the thorny issue of Oregon’s land use policy. It protects land while restricting land for residential and business development.

Instead, they focused on other shortcomings and opportunities facing Oregon.

“Oregon makes things. She chose to view the glass as half full, noting Intel’s continued commitment to Oregon, the company’s largest operating base and the company’s research center. Did.

She said she doesn’t know why Intel moved through Oregon for its latest expansion, but Kotek, a longtime state representative who recently served as Speaker of the House of Representatives, said she had a personal relationship with Intel’s CEO as governor. He said he would pursue a relationship.

Former state senator Johnson responded to Kotek: And the answer was to answer the damn call.

Johnson said the state ignored its relationship with its biggest employer, the company, and failed to secure “a little bit of expansion land” for the company.

“No one in the governor’s office saw the warning signal or contacted Intel when the tallest tree in the Silicon Forest was about to leave for Ohio,” Johnson said. “There were many warning signs.”

Even months before Intel’s announcement in Ohio, it was clear that Oregon would likely miss out on new chip fabs under construction elsewhere in the country. Kate Brown’s office recognized Intel’s expansion as a top priority, but it’s not clear what steps the administration has taken to pursue the new factory.

It may not have been easy for Oregon to achieve Intel’s expansion.

The company has set aside up to 2,000 acres of land for expansion in Ohio, choosing a location near Ohio State University for access to the best engineering schools. These are assets that Oregon cannot provide.

Additionally, Ohio pledged an additional $2 billion to Intel in incentives to support the project, including $600 million in direct grants. Intel enjoys more than $170 million in tax incentives annually in Oregon, but matching incentives in Ohio may have required a significant allocation from the state’s General Fund.

But with thousands of seasoned chip industry professionals working in the Portland area and industry suppliers already on hand, Oregon is still a great place for small manufacturers looking to expand. It may be attractive.

Former state Republican leader Drazen said Intel’s decision to expand operations in Ohio was shocking but not surprising.

“For businesses in Oregon, the regulatory and tax environment is one of the worst in the country,” said Drazen.

Oregon’s tax environment really lends itself well to capital-intensive manufacturing. The state has no sales tax on industrial equipment and gives technology companies hundreds of millions of dollars in property tax incentives each year.

But state regulatory structures are often a source of surprise for businesses of all kinds who complain that state rules are confusing, cumbersome, and discourage large-scale investment. He leads a task force subcommittee investigating whether changes would make Oregon more attractive to semiconductor manufacturers.

At last month’s debate, Drazan said Ohio’s success in attracting Intel was a lesson to Oregon leaders about how to respond to corporate needs and the importance of prioritizing private industry. suggested that it should be given.

“We need to recognize that Oregon is stronger when our business sector can actually grow here,” Drazan said.

— Mike Rogoway | mrogoway@oregonian.com | Twitter: @Logoway | |

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