Intel develops each new generation of microprocessor at its D1X factory in Hillsboro.

Gov. Tina Kotek plans to award Intel $90 million in state funding designated for the semiconductor industry, according to a letter her staff sent to legislative leaders Monday. It’s the first allocation of money lawmakers designated last year to support growth in of Oregon’s chip industry.

Neither the governor’s office nor Intel would say how Intel will use the money. But The Oregonian/OregonLive reported Tuesday that Intel filed last month for air-quality permits seeking authorization for a major expansion to its main manufacturing campus in Hillsboro, a project likely to run in the billions of dollars.

Sources familiar with Intel’s plans say the $90 million in new state money would help support that project.

The Oregon CHIPS Act, which passed the Legislature in March, gives Kotek broad authority to grant state funding to support new chip factories, semiconductor research or educational initiatives. She must give lawmakers 30 days’ notice before making awards of more than $50 million.

“After careful consideration and review of an application submitted to the governor’s office, we intend to approve an award in the amount of $90 million to Intel on August 30, 2023,” Vince Porter, Kotek’s economic advisor, wrote to legislative leaders Monday.

Oregon Public Broadcasting first reported Intel’s funding. The governor’s office said Intel and the state are still negotiating over how much of the $90 million in public money will consist of grants and how much will be loans, or refundable loans.

The Legislature designated more than $500 million in grants, loans and tax credits for the semiconductor industry during this year’s legislative session.

Semiconductors are Oregon’s largest export and one of its economic pillars, but the state has found itself playing catchup after being passed over in the past few years as Intel and other chipmakers announced big factories in other states. New York, Ohio and other states offered billions of dollars in incentives to win those factories.

Oregon’s economy isn’t large enough to support incentives on that scale, but lawmakers hope the money they approved this year will encourage chipmakers and their suppliers to take a fresh look at the state as they pursue a share of $52 billion in federal semiconductor funding Congress approved last year.

Friday was the deadline for companies to seek the first round of funding from the Oregon CHIPS Act. The state received 15 applications and is still reviewing most of them.

Intel is Oregon’s largest corporate employer, with more than 22,000 workers assigned to its campuses in Washington County. It is also the largest recipient of Oregon tax incentives, with property tax breaks worth $214 million annually.

“With a focus on long-term investment and collaborative initiatives with our local partners, Intel remains committed to the prosperity and advancement of Oregon’s economy,” the chipmaker said in a written statement Monday.