Intel Corp. plans two new Intel processor factories in Licking County, Ohio.

Intel announced plans Thursday to build as many as eight factories on a single site in Ohio, a “mega fab” that CEO Pat Gelsinger said may someday be “the largest silicon manufacturing location on the planet.”

Spending $20 billion in Ohio at the outset, and as much as $100 billion over the next decade, Intel is building its new factory campus from scratch on farmland near Columbus. It’s positioning the new complex to be the company’s main manufacturing center.

So where does that leave Oregon, currently Intel’s largest site?

It’s been clear for some time that Oregon was poised to miss out on a boom in domestic chip manufacturing, which brings billions of dollars in capital investment for each new factory along with manufacturing jobs that pay far above the median wage.

Intel’s Ohio project is the fourth major new semiconductor factory complex announced in the U.S. over the past 20 months.

None appear to have seriously considered Oregon, even though the state has one of the densest concentrations of chip industry workers and suppliers in the nation. A fifth project, from Idaho-based Micron, doesn’t appear to be considering Oregon, either.

Oregon boosters say the state is missing out on new factory construction in large part because it hasn’t allocated large parcels of land for industrial development. So it’s not even in the conversation for the huge projects getting under way in other parts of the country.

“We’re not ready for it, in part because I’m not sure there’s a clear, aligned vision on just how badly we want this kind of development,” said Portland economist John Tapogna, senior policy advisor with the consulting firm ECONorthwest.

A federal boost

Domestic chip production is poised to surge because of concern within the industry, and among U.S. politicians, that semiconductor manufacturing is too concentrated in Asia. That helped contribute to shortages during the pandemic and poses a geopolitical risk.

Moreover, China is funneling billions of dollars to establish its own semiconductor industry, which American leaders consider a national security issue.

So Congress is nearing bipartisan approval of $52 billion in subsidies for the domestic chip industry to fuel technology research and construction of new chip factories, which the industry calls fabs. Gelsinger and President Joe Biden called for swift passage Friday while touting the new Ohio project at an event near the White House.

In other periods in state history, that might have signaled a windfall for Oregon. Not this time.

Electronics manufacturing has been one of Oregon’s key industries since Tektronix emerged in the 1940s and ‘50s. Electronics, primarily computer chips, accounted for $16 billion in Oregon exports in the first 11 months of last year, 60% of all products the state shipped overseas.

Oregon plays a distinct role within Intel. It’s not a high-volume manufacturing site like the one Intel plans in Ohio. Instead, Intel’s Hillsboro scientists engineer each new generation of the company’s flagship microprocessors.

Oregon has some of the nation’s most lucrative manufacturing tax breaks. Property tax exemptions saved Intel $173 million last year alone, and nearly $760 million over the past five years.

Intel is Oregon’s largest corporate employer, and it will open a $3 billion expansion of its D1X research factory in Hillsboro next month. On Friday, as Intel trumpeted its plans for Ohio, the company quietly reiterated its commitment to Oregon.

“With over 22,000 employees, Oregon is Intel’s heart of R&D and will remain critical to Intel’s factory network,” Intel spokeswoman Elly Akopyan said.

Intel leads Oregon’s technology industry but several other companies – among them Qorvo, ON Semiconductor and Microchip Technology – operate large fabs in the Portland area.

Oregon semiconductor manufacturers pay an average wage of more than $150,000 a year, 2.5 times the state average. That’s skewed upward by highly compensated Intel scientists and executives, but even entry-level factory technicians with just a two-year degree typically start around $60,000 annually.

Yet Oregon’s semiconductor employment hasn’t grown in 20 years. With the notable exception of Intel, no one has built a new Oregon fab since 1998.

That factory never opened, and it doesn’t appear any other major fabs are coming.

‘Wake-up call’

In choosing its site near Columbus, Intel highlighted Ohio State University, which has one of the nation’s top-ranked engineering schools. And Intel picked a 2,000-acre site with room for as many as eight fabs.

Oregon used to have a ready supply of industrial land as it gradually converted farmland for development. The names of Intel’s three main Washington County sites — Hawthorn Farms, Jones Farm and Ronler Acres — are testament to that lineage.

The Ronler Acres manufacturing campus is nearly fully built out, though, and the whole property is just 530 acres. There are no shovel-ready, large industrial sites in Portland or its suburbs right now, foreclosing the prospect of huge development on the scale chipmakers are now beginning in Arizona, Texas and Ohio.

Business Oregon said the biggest readily buildable industrial site in the Portland area is around 200 acres in Hillsboro, one-tenth the size of Intel’s new parcel in Ohio.

Intel says its new Ohio fabs will employ 3,000 employees when they open three years from now. If the company builds the other six fabs that would presumably add several thousand more jobs.

“This Ohio decision … it should be a wake-up call that there’s an issue here,” Duncan Wyse, president of the Oregon Business Council, said Friday. He’s helping convene a task force of business and government leaders to renew the state’s chip industry.

Workforce development, university research and permitting issues are all things the task force will look at. But he said the availability of industrial land must be at the top of the list.

“We have to think of some way to be way more creative, and responsive, in getting land set up for industrial development. And we just do not have that in Oregon right now,” Wyse said.

It’s not simple, he acknowledged, to balance Oregon’s emphasis on smart growth and rural preservation with economic opportunity. But Wyse said it’s clear Oregon isn’t positioned to compete for big projects like Intel’s fabs in Ohio.

“This is a high-priority, urgent issue. So we are definitely on it,” he said.

Tapogna traces Oregon’s attitude toward large industry to the 1990s, when “communities were growing faster than you could build the infrastructure, coherently, to accommodate that growth.”

Washington County famously adopted a tax on new Intel manufacturing jobs as a tool to manage the community’s growth, though it repealed the tax before ever applying it. Tapogna notes Oregon hasn’t grown nearly as fast this century, with three major recessions disrupting economic activity.

Oregon hasn’t recalibrated, he said, and hasn’t made a commitment to growing one of the state’s largest and most lucrative industries.

With Oregon electing a new governor this fall, and with new leadership set to take the floor in the Legislature, Tapogna said this is the moment to consider whether Oregon could take immediate steps to make the state more inviting.

“I do think the state and the powers that be really have to look deep inside themselves and say, ‘What do we want for the future?’” he said.

Gov. Kate Brown’s office declined a request for an interview Friday with her economic development staff but said in a statement that the governor “is committed to expanding manufacturing and semiconductor manufacturing in Oregon.” The governor’s office said it’s coordinating its work with the new chips task force.

Washington County, Hillsboro and Forest Grove are working on a parallel “reshoring” initiative to identify what the chip industry needs for regional expansion.

STILL THE HUB

While Intel’s CEO has always worked at corporate headquarters in Santa Clara, California, other top executives have worked in Hillsboro. In the past 15 years, the roster of top leaders who live in Oregon have included — at various times — Intel’s chairman, president, chief financial officer and its chief technology officer.

That roster of Oregon executives has steadily dwindled over the past two years, though, culminating in the resignation this month of Gregory Bryant, who ran Intel’s PC group. That leaves Ann Kelleher, who runs Intel’s technology development group, as the only top company executive in Oregon.

While Oregon’s chip industry doesn’t appear positioned for significant growth in the near future, it’s also not facing imminent decline. Amid a global supply chain crunch, demand for chips is as intense now as it has been for decades.

Gelsinger lived in Oregon for most of his Intel career, then moved to the Bay Area to run software company VMware after leaving Intel in 2009. Since Intel hired him back a year ago to run the business a year ago, Gelsinger has repeatedly stressed the state’s central role.

Last May, he told The Oregonian/OregonLive that Intel plans to expand its Oregon factories again “in another three or four years” as it moves to new generations of semiconductor manufacturing.

And even as Intel prepared to expand to new sites in the U.S. and Europe, Gelsinger said Oregon would remain the heart of the company’s engineering.

“This is the hub of our semiconductor research,” he said last spring. “It’ll always be that.”Mike Rogoway | mrogoway@oregonian.com | Twitter: @rogoway | 503-294-7699