Legislators Are Urging Gov. Kate Brown To Act Quickly On Microchip’s Proposed $3 Billion, 650-person Oregon Factory

According to Oregon’s civic officials, the new factory Microchip Technology is considering building at its Gresham facility may eventually cost $3 billion and employ 650 people.

The executives of the organisation wrote to Gov. Kate Brown in a letter that was acquired by The Oregonian/OregonLive, saying that the expansion will “make an amazing difference in Gresham, East Multnomah County, in Oregon, and in national chip production.” “We want Oregon workers to assist in resolving our challenges with the world’s supply chain.”

Together with Gresham Mayor Travis Stovall and Mt. Hood Community College President Lisa Skari, four state legislators signed the letter that was delivered on Monday. They pleaded with the governor to take action by November 1 and give Oregon’s bid $17.5 million from three state coffers.

In their essay, they stated that keeping Microchip’s development in Oregon “protects and develops the semiconductor ecosystem, offers an opportunity to Oregonians, and promotes routes to community success in Gresham and East Multnomah County.”

Winning the new facility would be a huge help to Oregon’s initiatives to revive its semiconductor industry. If the business decides to develop somewhere else, the setback would raise new concerns about the state’s ability to support the industry in the long run.

In a statement on Tuesday, Microchip stated that it intended to invest up to $5 billion over several years in the construction of a plant, or “fab,” as the chip industry refers to it, somewhere in the United States. In comparison to the 200mm silicon wafers in Microchip’s current Gresham fab, the new fab will use 300mm silicon wafers, a more modern method.

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Microchip stated that it will not choose a location until a portion of the $280 billion in CHIPS Act funds that Congress enacted last summer has been received.

According to Brian Thorsen, a spokesman for Microchip, “the earliest we foresee financing choices from the Department of Commerce is the second quarter of 2023.” We are still researching the incentives offered by other states and cities in the interim, so we won’t choose a location until that process is over.

The letter was signed on Monday by Rep. Ricki Ruiz of Gresham, Rep. Zach Hudson of Troutdale, Sen. Chris Gorsek of Troutdale, and Rep. Janelle Bynum of Clackamas.

The senators and Gresham officials requested that Brown take $10 million from the state’s new job training programme and an additional $7.5 million from two economic development programmes in their letter to Brown. They did not define the purpose of the funds allocated, only that they were “concrete efforts to compete for the Microchip expansion.”

They wrote: “We are persuaded that Oregon is and should remain the ideal location for semiconductor manufacturing and this massive Microchip expansion, even if Oregon may not be able to compete for dollars with more resource-rich states.

Kate Brown To Act Quickly On Microchip's Proposed $3 Billion
Kate Brown To Act Quickly On Microchip’s Proposed $3 Billion

The governor “is pleased to see that local leaders are beginning to understand the positive impact an expansion of Microchip would bring for both the state and for the Gresham community, bringing hundreds of good paying jobs and solidifying Oregon’s position in the semiconductor industry,” according to Liz Merah, a spokesperson for Brown.

According to Merah, Oregon’s economic development organisation has been in contact with Microchip since last year to discuss the possibility of a Gresham expansion and to negotiate incentives similar to those outlined in Monday’s letter.

“States like New York and Michigan are also providing competitive packages into the hundreds of millions of dollars β€” considerably above the request made by legislators and Multnomah County’s leadership,” Merah stated in an email. “These states have significantly larger economies and revenue streams.”

Merah stated that expanding the Silicon Forest will necessitate utilising Oregon’s new workforce development programme as well as taking further measures to prepare the state for the growth of the chip sector.

Building on the report a task force of government and business leaders produced in August, state lawmakers have been meeting over the past week to discuss measures to entice the chip industry in the forthcoming session. On “day one” of the new session, Brown hopes that lawmakers will take her package of suggestions under consideration.

According to Merah, “The Governor remains in charge of assembling the Semiconductor Task Force to ensure Oregon can develop a legislative package that can encourage the expansion of this industry as a whole.”

The 140-acre Gresham land owned by Arizona-based Microchip, almost half of which is undeveloped, is under consideration for a second fab, according to a report published last week in The Oregonian/OregonLive. The project is 900,000 square feet, according to the letter from Monday.

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The fab was purchased by Microchip for $184 million 20 years ago after its previous owner Fujitsu Microelectronics closed it down. Due to the enormous demand for Microchip’s products, which are used in a wide range of consumer electronics, automobiles, medical devices, networking equipment, and aeroplanes, it has grown significantly over the past two years.

According to Microchip, it has increased employment in Gresham by 250 jobs over the last two years, bringing the total to 864. Separate from the proposed new fab, it said this week that it expects to hire 300 extra people over the next two years.

Microchip has factories all across the country and the world, including those in Colorado, the Philippines, Thailand, Pennsylvania, and Germany. Gresham is the company’s largest manufacturing facility. The business, like other chipmakers, is putting itself in a position to benefit from the CHIPS Act’s additional federal financing for domestic semiconductor manufacture.

Oregon also desires a portion of that federal funding. The state boasts one of the highest concentrations of chip manufacturing in the country, and approximately half of the state’s exports are made up of semiconductors. But since the 1990s, no business has constructed a new fab in Oregon but Intel.

In an interview on Tuesday, Skari, the president of Mt. Hood, stated, “The objective is to be the semiconductor epicentre, globally.”

In a separate letter to Brown on Monday, Skariβ€”a task force member on chips and co-chair of the group’s workforce development committeeβ€”emphasized the advantages that more semiconductor jobs would bring to the “diverse and economically fragile” regions the institution serves near Gresham.

Mt. Hood already offers an engineering technology programme, and according to Skari, the college is exploring the possibility of modifying its automotive and manufacturing programmes to better prepare students for the chip industry. Microchip and another Gresham chipmaker, Onsemi, are both partners in this effort. Additionally, she stated that the college is seeking to open up the semiconductor business to students enrolled in Mt. Hood’s English language learning programmes.

That’s one area where there are tonnes of opportunities, according to Skari.

According to Skari, Mt. Hood and other community institutions in the Portland region are collaborating as they create their own plan for semiconductor industry education. They want to apply for a portion of the $200 million in job training money that lawmakers approved last winter, she added.

Skari declared, “There’s more than enough need to go around. “If we’re being deliberate and thoughtful, we can be more effective.”

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