Oregon’s chances of winning one of Oregon’s top economic priorities, building a federally funded semiconductor research center, depend on President-elect Donald Trump’s victory at the ballot box and rising tensions between the Biden administration and Intel. In response, it appears to be on the verge of crisis.
Three people with direct knowledge of discussions between the Commerce Department, Intel and the state of Oregon say the state’s chances of acquiring the land appear to have declined significantly over the past week.
Oregon continues to pursue one of its research sites, and officials say they remain hopeful. But some people close to the discussions say they feel the Biden administration, which is expected to choose a host site by the end of the year, is now focused on other states. The three sources declined to speak on the record, citing the sensitivity of the ongoing negotiations.
The loss would be a major setback for one of Oregon’s foundational industries and could result in a loss of nearly $1 billion in federal investment for the state. Combined with Intel’s continued struggles, there will be even more uncertainty over the future of Oregon’s semiconductor economy.
This fall, the Department of Commerce awarded two National Semiconductor Technology Center locations in upstate New York and Silicon Valley.
With state-of-the-art research in Hillsboro, Intel and Oregon economic development officials are looking forward to acquiring the final research site. This is a packaging and prototyping facility that could be given to one state or split between two states. This would bring hundreds of millions of dollars in federal spending to Oregon and anchor the state’s semiconductor industry for generations.
“If we are serious about national security and maintaining America’s leadership in advanced manufacturing, we clearly have the right It’s the location.” He said Oregon has the highest concentration of chip factory workers and designers in the nation, making it a logical location for NSTC.
“We think we can win on merit and relationships,” Weiss said Thursday. “I think we had great conversations at all levels, including the Secretary of Commerce.”
Sen. Ron Wyden (D-Ore.) was the primary champion of the CHIPS Act in Congress. He said Thursday that Oregon remains a logical choice for an NSTC site given its concentration of semiconductor manufacturing.
“Our nation remains a top candidate for a National Semiconductor Technology Center that solidifies our collective position as a world leader in domestic semiconductor protection and innovation,” Wyden said. “Landing one of these centers in Silicon Forest would be another huge win for our state’s jobs, national security, and building an even stronger industry that can compete and win against China. Sho.”
The National Semiconductor Technology Center was authorized by the CHIPS Act of 2022, a federal law that allocated $52 billion to revive the domestic semiconductor industry. Acquiring one of the NSTC sites is a key component of Oregon’s strategy to boost chip manufacturing in the state and is a top priority for Intel.
“Intel believes Oregon offers the strongest ecosystem for NSTC facilities and appreciates the commitment of state and federal leaders to ensuring the state’s competitiveness,” the company said Thursday. said in a written statement. “Oregon is uniquely positioned to contribute to the success of NSTC and advance technological advancements in the U.S. semiconductor industry.”
Gov. Tina Kotek is preparing to designate 373 acres of rural land near Hillsboro for industrial development to make room for research and related projects. The decision is controversial, as conservationists in Oregon want to preserve the area as agricultural land.
Under a state law passed last year, Kotek has until the end of December to decide whether to pursue a plan to bring the land within the Portland area’s urban growth boundary. The law ties this decision to federal CHIPS Act funding, so even if the Department of Commerce passes Oregon, it’s unlikely Kotek will make its 373 acres available for development.
People familiar with the research site decision process say Trump’s victory complicates things in Washington, D.C.
Trump considered similar incentives during his first term, but he criticized the CHIPS Act on the campaign trail this year. If the three research hubs were moved to reliably Democratic states, New York, California, and Oregon, the second Trump administration could weaken support for the program and even change the choice of locations. Some think they might try to overturn it.
Awarding the site for the NSTC to Texas or Arizona, which are said to have made strong bids, could help ensure the Trump administration supports the project in the future.
Additionally, Intel and the Biden administration appear to be at loggerheads, and the company’s deteriorating financial situation has made federal officials wary of making additional commitments.
Intel was a major supporter of the CHIPS Act and helped steer it through Congress. Intel CEO Pat Gelsinger was President Joe Biden’s guest at the 2022 State of the Union address, during which Biden announced that federal support for the semiconductor industry would be It was claimed that it would reduce dependence on
Intel is the country’s largest and most advanced domestic semiconductor maker and had been a focus of the Biden administration’s efforts to restore U.S. leadership in chip production.
Last March, the Biden administration awarded Intel an advance of $8.5 billion in direct CHIPS Act grants and $11 billion in low-interest federal loans. Intel’s incentives are the largest ever given to a company under the CHIPS Act.
But Intel’s outlook darkened over the summer as sales fell far short of the company’s expectations and the chipmaker announced plans to cut spending by $10 billion and cut 15,000 jobs next year. Intel laid off 1,300 workers in Oregon last month and posted a $16 billion loss in the third quarter, largely due to accounting-related charges due to the company’s lower expectations for future profitability.
Some stock analysts and industry observers have proposed breaking up Intel and separating its design and manufacturing operations. The economic newspaper reported that a rival company was considering acquiring all or part of Intel’s business.
Amid the turmoil, Intel actually received no funding from the CHIPS Act, which was announced last March. The company and the Commerce Department are reportedly trying to work through differences over what chipmakers must do to receive the funding.
Meanwhile, Mr. Gelsinger has increasingly expressed frustration over funding delays. And last week, he criticized the Biden administration in an all-hands meeting.
“I don’t think it reflects well on the current administration that it took this long and was so bureaucratic to resolve this,” Gelsinger said.
Two people familiar with NSTC-related discussions said Mr. Gelsinger’s comments alienated government officials and diminished enthusiasm for cooperation with Intel. As a result, Oregon is less likely to receive an Intel-backed research site.
On Wednesday, Gelsinger joined other technology executives in paying tribute to Trump on social media after his election victory.
“We congratulate President-elect Trump and Vice President-elect Vance on their victory and look forward to working with both administrations to advance American technology and manufacturing leadership in the world,” Gelsinger said. I wrote this.
— Mike Rogoway covers Oregon technology and the state’s economy. Contact us at mrogoway@oregonian.com or 503-294-7699.
Subscribe to the Oregon Business Briefing Newsletter Business Editor Elliot Njus writes this subscriber-only newsletter to share the week’s biggest stories and exclusive insights. Not a subscriber? You can receive a few weeks of our newsletter for free. Click here to sign up.
