Experts say more federal money is expected to flow to Oregon’s semiconductor industry, supporting job growth

The semiconductor company Microchip is getting $72 million in federal funding to expand its computer chip manufacturing capacity in Gresham — and it’s likely just the beginning of federal dollars flowing to Oregon chip makers.

Semiconductor firms operating in the state remain candidates for even more of the $50 billion heading to U.S. companies as part of the federal CHIPS Act passed by Congress in 2022. On top of that, Oregon is doling out around $200 million to businesses like Intel and HP that expand or build new facilities in the state.

Grants from the state and federal government aren’t expected to suddenly create a semiconductor hub where one didn’t exist. But the financial infusion can help proposed projects move from the drawing board to the ground in places like Oregon with an established semiconductor industry or can help spark momentum for expansion projects companies already had in the works.

Right now, the industry — which includes companies that research, develop, design and/or manufacture computer chips crucial to making our technology function — employs around 30,000 Oregonians. State economists estimate that number will swell by about 3,000 jobs over the next eight years. And experts closely watching the industry say the infusion of funds will help entice companies to move forward with expansion plans in Oregon, which in turn will help the job growth estimates become a reality.

“It’s taking a decision that a company maybe was on the fence on,” said Mike Wilkerson, director of data analytics at Portland-based consulting firm ECO Northwest, “or maybe not feeling like it was competitive, and tipping the scale a little bit so that they can make the decision to invest in or expedite the timeline. The federal plus state dollars are that extra incentive to expedite the expansion.”

Wilkerson said it takes a lot of money and time — like 10 to 15 years — to build a semiconductor manufacturing facility, called a fab. He said Oregon is a strong candidate for federal funding because of the workforce, state support, and presence of well-known companies here.

The semiconductor industry is made up of more than 100 different occupations across the spectrum of developing and building chips. Wilkerson said Oregon has companies representing the full range of firms that make up the industry, which also has the highest average wage in the state.

“Our data finds that the semiconductor industry is more important to Oregon than any other industry in any other state,” Wilkerson said.

The companies committed to manufacturing semiconductors are the biggest beneficiaries of federal and state money, he said. In part, that’s because state and federal leaders want to entice companies to move production to, or keep it in, the U.S.

Wilkerson said Oregon doesn’t just have a competitive edge in attracting manufacturing but also in attracting businesses that research, develop and design semiconductors.

That’s because the state has a growing number of workers trained in skills related to semiconductor development, according to Rajesh Rao, a leader with the global consulting firm Ernst & Young, which advises semiconductor companies.

“Given all these new jobs that are being created,” Rao said, “There’s a lot of initiatives in community colleges and universities that are aligned to the education programs that the industry needs.”

The U.S. Commerce Department is slated to release federal CHIPS Act funding in stages. Rao expects more of the billions in yet-to-be-distributed funds to go to companies operating in Oregon.

“This semiconductor industry is highly specialized,” Rao said. “There are only a few states within the United States that have that capability in terms of the workforce, the ecosystem, all the incentives, and Oregon is one of them.”