The state of Oregon is going benefit from US$ billions investment over the next few years as Intel, the chip manufacturer, recently announced that it will make significant investment in its Oregon operations. This will result in thousands more jobs in the area: both as direct employees and from ancillary support services.
The company has submitted plans to the City of Hillsborough to enable it to undertake the fourth development phase of its huge research centre, D1X, located at its manufacturing site near the Hillsborough Stadium in Oregon. This phase of the program is ‘MOD4’ and is likely to be one of the largest investment projects ever in Oregon. The preceding phase, MOD3, was only completed in 2022 and it alone came out at over $3 billion, so this new phase underlines Intel’s commitment both to its D1X site and to Oregon. According to Intel’s CEO, Pat Gelsinger, this investment is just part of Intel’s plans to invest more than $100 billion in the USA over a five-year period. Intel is the only major chip manufacturer with its HQ in the USA and is thus a key domestic player.
The Governor of Oregon, Tina Kotek, naturally welcomed this investment and celebrated Intel’s commitment and support in ensuring that Oregon remains a hub of US semiconductor R&D and technology development for years to come.
This comes on the back of the Biden Administration recently announcing that Oregon will host two of the 31 new ‘National Technology Hubs’, which are intended to stimulate research and innovation, as well as creating jobs. Oregon is therefore likely to benefit from tens of millions of Federal dollars of financial support. These technology hubs are intended to ensure that technology thrives and grows outside the two current tech centres of Seattle and San Francisco: thus creating many higher paying jobs as well as developing the support infrastructure. Oregon has also been designated a “Clean Hydrogen Hub” along with Washington, which means the two states will get a share of around $1 billion to develop low-emissions hydrogen, thus reducing the use of fossil fuels.
In addition, the Governor of Oregon said that she planned to approve $90 million in state funding toward the Intel expansion saying:
“Today’s tech hub announcements are an exciting marker of progress in Oregon’s work to boost our technological industry with the goal of creating more jobs and finding innovative ways to strengthen our economy. Thanks to the partnership and support of the Biden Administration and our congressional delegation, these awards will propel Oregon to meet our prosperity goals.”
Anne Kelleher, Intel Vice President and Head of the Company’s ‘Technology Development Group’ said “This investment further solidifies our commitment to the ‘Silicon Forest’ and re-balancing the global semiconductor supply chain”. The announcement from Intel also described the pending investment in Oregon as very close in scale to other, recent, projects announced in other parts of the USA: which were very large. In addition, Intel is also going to modernise some of its existing factories in Oregon and, as these projects were not included in the new building plans, they thus represent further investment and will create yet more jobs in, for example, the construction industry and other support industries. The company said that the main objective of this expenditure is to regain the edge over its competitors in the field of advanced microprocessors with enhanced computing power and more capabilities.
Intel caveated the announcement by saying that this work was contingent on winning money under the CHIPS and Science Act which the Federal Government and Congress have made available: but as it has made a formal written announcement, it is unlikely not to push ahead with this investment programme. Oregon is already Intel’s largest operating hub anywhere in the world and one objective of the expansion is to secure the development and production of semiconductor chips and their components domestically in the USA and thus reduce the risks attendant on using an international supply chain outside of its control and thus subject to events which can have a negative impact on supplies. This vulnerability was highlighted during the COVID pandemic when many products were unfinished due to the unavailability of chips from Asian suppliers.
The lead agency for the Federal investment will be the Oregon State University, and it will facilitate both the ‘Pacific Northwest Mass Timber Hub’, and the ‘Corvallis Microfluidics Tech Hub’. Microfluidics can also be used in bioscience, such as testing for diseases and, according to the U.S. Department of Commerce, the Corvallis Hub will “establish global leadership in the development, scaling and commercialization of microfluidics technology for use in semiconductor and electronic cooling.”
The Mass Timber Hub is a programme to ensure more environmentally friendly and sustainable use of timber through a new product which uses many layers of wood stuck together which can be as strong as steel or concrete and is far more carbon friendly: typically using locally sourced wood from Oregon and Washington. It has been used, for example, to roof the 9-acre Portland International Airport Terminal building. Another objective is to reduce housing costs generally to make them more affordable.
These two Oregon hubs will, however, have to compete with the other regional hubs for a share of US$500m via the ‘CHIPS and Science Act’ but could conceivably receive up to $75 million. Oregon will also benefit from grant funding through the ‘Northwest Smart Energy Strategy Development Consortium’ to develop a regional strategy for energy storage systems.
In addition, the State of Oregon itself has pledged $500 million through grants loans and tax benefits to ensure that the semiconductor industry in the state continues to grow strongly. It is estimated that 15% of all semiconductor jobs are already in Oregon, and these initiatives should see this level rise. Hillsborough has also offered a 1,400-acre site to facilitate the expansion, although Intel has not said it has any plans for a new site. Indications are that the programme will start in 2025 and run until 2028.