Oregon Loses Bid for Semiconductor Research and Development Hub to Arizona

The Biden Administration yesterday (Monday) dashed all hopes of Oregon as the home of the world-first 300mm front-end semiconductor manufacturing and advanced packaging research facility.

Instead, Arizona State University has won the coveted selection that would have plowed nearly $1 billion annually in the Oregon economy.

 

Governor Tina Kotek Previously Indicated Defeat

The first inkling of defeat came when Governor Tina Kotek announced in December 2024 that she would no longer attempt to incorporate 300 acres of agricultural land in Hillsboro into the industrial growth boundary, the proposed site to house the semiconductor packaging research center.

Kotek, supported by lawmakers, worked closely with Intel in the campaign to have Oregon chosen for the third flagship CHIPS Act research and development facility.

However, relations between Intel and the Biden administration soured as Intel’s market position deteriorated – casting doubt on its long-term prospects and making the Biden administration hesitant to tie the future of U.S. chip manufacturing to the company.

However, Oregon’s loss is not necessarily a defeat for Intel which has major facilities near Arizona and headquarters in California, two of the three states selected for CHIPS Act funding R&D hubs. Intel has operated in Arizona for 45 years and will undoubtedly play a role in the new facility.

Intel’s Oregon operations are central to its technology development with semiconductors continuing to dominate state exports. Intel employs about 20,000 workers at its Hillsboro campus.

Another reason cited for Oregon’s loss follows Donald Trump’s presidential reelection. Some observers predicted that the Commerce Department would hesitate to select Democratic states as the site of all three R&D hubs, which would have happened if Oregon was chosen and not the Republican stronghold of Arizona.

 

Oregon’s Reputation as a Key Player Began to Wane in 2022

Oregon’s reputation as a key player in the semiconductor industry began to wane in 2022 when Intel selected Ohio as its preferred site for two of its large new factories.

Lawmakers and business leaders fought back with subsidies worth hundreds of millions of dollars to boost Oregon’s prospects as a major chip industry player. They also introduced land reforms, making industrial land more easily available.

Intel and other chipmakers subsequently announced expansion plans of their Oregon operations.

However, Microchip Technology’s Gresham expansion plans have been placed on ice, while the scale of Intel’s Hillsboro expansion also appears uncertain.

The new facility in Tempe, Arizona, is scheduled for completion by 2028 and will be a driving force in the U.S. initiative to wrest leadership from Asia of the semiconductor industry.

The facility will feature cutting-edge technology and will enable researchers and semiconductor industry leaders to develop and test new devices, materials, and advanced packaging solutions.

The research and development hubs will benefit several stakeholders including large manufacturers, small businesses, and universities, and will also create quality jobs.

 

Sources & References

  1. Third CHIPS for America R&D Flagship Facility Announced – https://natcast.org/third-chips…
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