Intel’s decision to build a multi-billion dollar manufacturing campus in Ohio set off alarm bells in Oregon earlier this year. Now, that decision is expected to be an issue in November’s gubernatorial election.
The state has one of the densest concentrations of semiconductor jobs in the country, but Oregon is set to miss out on a barrage of new computer chip factories planned in states ranging from Arizona to Indiana via New York. Manufacturers are responding to a global chip shortage, which has hampered production of everything from automobiles to home appliances.
Oregon’s top three gubernatorial candidates addressed the issue in their first debate last month, agreeing that the state’s next governor needs to be more engaged with the chip industry. But they have stark differences in how they view Oregon’s business climate.
Democrat Tina Kotek vowed to prioritize workforce development, independent candidate Betsy Johnson blamed the state for neglecting Intel, and Republican Christine Drazen lamented the regulatory and tax climate in the industry. ‘State.
“How to stop the next Intel from moving?” Drazan asked.
The severe shortage of industrial land in the Portland area is a central issue for the region’s semiconductor industry. The big chipmakers want plots of at least 1,000 acres 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 exploring other potential issues, including the state’s regulatory climate, workforce development, tax structure and incentives.
The task force plans to release its first report later this month, hoping to position Oregon to get a share of $280 billion in new federal funding for scientific research and chip manufacturing.
In their recent debate, neither candidate directly addressed the thorny issue of Oregon’s land use policy. The state zealously protects rural property beyond the limits of urban city growth, preserving farms and forests while limiting land for housing and business development.
Instead, they focused on other gaps or opportunities Oregon faces.
“Oregon is doing things. I want to do more things here. Manufacturing is essential and high-tech manufacturing is a double good for us,” Kotek said. She opted to see the glass half full, noting that Intel has an ongoing commitment to Oregon, which is the company’s largest operating hub and the company’s research heart.
Although she said she didn’t know why Intel dropped Oregon for its latest expansion, Kotek — a longtime state representative who recently served as House speaker — said she would pursue a personal relationship with the CEO of Intel as governor.
Johnson, a former state senator, fired back at Kotek, “I actually know the answer to the question because I’ve spoken with Intel executives. And the answer was, Answer that fucking phone. .
The state neglected its relationship with its largest employer, Johnson said, and failed to set aside “a little ground for expansion” for the company.
“No one in the governor’s office saw the warning signs or contacted Intel when the tallest tree in our Silicon Forest was about to leave Ohio,” Johnson said. “There were a lot of warning signs.”
It was indeed evident for months before Intel’s announcement in Ohio that Oregon was likely to miss new chip factories being built elsewhere in the country. Gov. Kate Brown’s office had identified Intel’s expansion as a top priority, but it’s unclear what steps — if any — the administration has taken to pursue new factories.
It may not have been easy for Oregon to land Intel’s expansion, regardless of the attention the company received from state leaders.
The company has secured up to 2,000 acres for its Ohio expansion and has chosen a site near Ohio State University to access a top engineering school. These are things that Oregon cannot offer.
Additionally, Ohio promised Intel more than $2 billion in incentives to support the project, including a $600 million direct grant. Intel receives tax breaks from Oregon worth more than $170 million a year, but to match Ohio’s incentives might have required a substantial allocation from the state’s general fund. .
With thousands of experienced chip industry professionals working in the Portland area, however, and a constellation of industry suppliers already in place, Oregon could still attract smaller manufacturers considering expansion.
Drazen, a former Republican leader at the State House, said Intel’s decision to expand into Ohio was shocking but shouldn’t have been surprising.
“We have one of the worst regulatory and tax environments in the country for businesses in Oregon,” Drazen said.
Oregon’s fiscal climate is actually well suited for capital-intensive manufacturing. The state has no sales tax to levy on industrial equipment and gives tech companies hundreds of millions of dollars each year in property tax breaks.
The state’s regulatory structure, however, has been a frequent source of consternation for all manner of businesses who complain that state rules are confusing and cumbersome, preventing large investments. Governor Brown leads the task force subcommittee studying whether regulatory changes could make Oregon more attractive to chipmakers.
During last month’s debate, Drazan suggested that Ohio’s success in attracting Intel should be a lesson to Oregon leaders in how to meet business needs — and the importance of prioritizing. to private industry.
“We have to recognize that Oregon is stronger when our business sector can actually grow here,” Drazan said.
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