U.S. Sen. Ron Wyden, flanked by three high-tech executives from the region, gave his pitch for swift congressional action for billions of dollars to boost the nation’s semiconductor manufacturing and research.

Some of that federal money is expected to come to Oregon, home of the “Silicon Forest” and many technology businesses, including chipmaker Intel, which with 22,000 workers is Oregon’s largest private employer.

Wyden, a Democrat who is up for re-election Nov. 8, said Oregonians may be baffled by complex explanations about the difficulties of supply chains leading to inflation rates not seen in four decades. But he said they understand one simple reason for a shortage of cars and other products — a lack of semiconductor chips, many of which are made outside the United States.

“They are certainly thinking about inflation and whether they will have access to products,” he said Saturday. “It is clear as today is in Oregon.

“Computer chips have been essential to the quality of life in our state and country. It is just as clear that supporting domestic chip production is a must for lowering costs for U.S. consumers and increasing high-wage, high-skill jobs.”

Wyden also said there is a national security argument for boosting domestic production of chips, given current U.S. dependence on their manufacture in China — a global economic rival — and other Asian nations.

Wyden was joined at the Portland event by executives from Intel, nLIGHT and Microchip Technology Inc. All have their corporate headquarters outside Oregon, but all have manufacturing plants here — Intel in Hillsboro and Aloha, nLIGHT in Hillsboro (and Vancouver, Washington), and Microchip Technology in Gresham.

The event was at Stark’s Vacuum Cleaners on Northeast Grand Avenue. Wyden said it was an example of a family-owned business — it dates back 90 years — where the modern product now relies on semiconductors.

In addition to leading the Senate Finance Committee, which writes tax legislation, Wyden is one of the congressional negotiators seeking to resolve differences between Senate and House versions of legislation aimed at boosting U.S. economic competitiveness.

GOP leader’s threat

Wyden spoke two days after Senate Minority Leader Mitch McConnell, a Republican from Kentucky, said in a tweet he might derail the legislation in an evenly split Senate if majority Democrats proceed with unrelated proposals he objects to in a pending budget reconciliation measure. Among them are increased taxes on high-income earners, pricing limits on prescription drugs and tax incentives for clean energy.

“They are separate matters,” Wyden said.

“I will keep working with anybody who wants to give American workers and manufacturers the help they need now to strengthen the American economy. I believe we can help our country and outcompete China.”

The original Senate version of the competitiveness legislation (S. 1260) passed 68-32 — with votes from McConnell and 18 Republicans — back on June 8, 2021. Vermont’s Bernie Sanders, an independent who normally sides with Democrats, joined 31 Republicans in opposition. It is sponsored by three Democrats, including Wyden, and three Republicans.

The House passed a different version (HR 4521), largely along party lines, on Feb. 4.

Among the differences are the proposed spending amounts. The House proposes $52 billion for grants for semiconductor manufacturers, $45 billion for supply-chain improvements, and $160 billion for research and development. The Senate proposes $50 billion for manufacturing grants, $10 billion for the Department of Commerce to name cities as regional technology hubs and $250 billion for research and development, but in a different way than the House bill.

President Joe Biden, on a brief stop April 21 at Portland International Airport, urged Congress to get moving on the legislation.

One of the other congressional negotiators is Rep. Suzanne Bonamici, a Democrat from Beaverton whose 1st District includes the Intel plants.

Wyden said he hopes Congress can move on a stand-alone bill before the summer recess starts Aug. 6. Democrats, who have thin majorities in both chambers, have other options to advance it.

Intel executive: Act now

At the event, an Intel executive said that without the pending legislation, the United States is likely to fall behind others that have increased their incentives for semiconductor manufacturing: the European Union, India, Japan and South Korea. This excludes China, which has loaned billions to its own manufacturing enterprises.

“The longer Congress delays in passing the act, the higher the risk that chip manufacturers will decide to invest and expand outside the United States,” Gabriela Cruz Thompson said.

“if we wish to retain advanced chipmaking capabilities, time is of the essence. There is bipartisan recognition that chips are critical to our nation and economic security. And there is bipartisan support for manufacturing here in the United States.”

She is the senior director of university research and collaboration for Intel Labs.

Intel on Jan. 21 announced a $20 billion investment in two new chipmaking plants near Columbus, Ohio — an announcement that drew criticism about why the plants were not built in Oregon. On April 11, Intel announced a $3 billion expansion of its D1X development factory, which will be named in honor of Intel co-founder Gordon Moore on a 500-acre campus in Hillsboro’s Ronler Acres.

Thompson said Intel will seek federal grants under the legislation to establish a regional technology hub — but also did not rule out grants for manufacturing outside Oregon.

“We are going to be getting funding especially to do research and development here in Oregon, the region and the Northwest — but also in other places in this country,” she said.

No short-term fix

Malinaric and Thompson said the pending legislation, even with its infusion of federal money, probably will not resolve current chip shortages.

“The reality is that the demand far outstrips the supply,” Malinaric said. With a two-year backlog, he added: “The reality is that we cannot expand fast enough to meet the unprecedented demand we see from our customers.”

Thompson said Intel Labs has partnered with the National Science Foundation for expanded education at $100 million. She said it will take time to expand the workforce for research, development and manufacturing before chip supplies can increase.

“With time — and time is of the essence — we are going to see a change in the pricing structure and the availability of chips. it is not immediate,” she said. “But the more we delay this decision and there is a delay in funding, the longer it will take to come out of the other side of this crisis.”