Microchip Technology Eyes Major Factory Expansion in Gresham

Microchip Technology is eyeing a major expansion of its factory in Gresham, according to Oregon officials with direct knowledge of the talks, which could bring substantial new investment and hundreds of new jobs while extending the site’s future for decades.

Microchip’s potential investment comes amid an unprecedented domestic construction boom among chipmakers, with major new factories planned in Arizona, Idaho, Texas, Ohio and New York. Manufacturers are racing to capitalize on a jump in demand for computer chips during the pandemic and $280 billion in new federal incentives for semiconductor research and manufacturing.

Oregon has so far missed out on all of that construction, even though the Portland area has one of the densest concentrations of chip manufacturing in the nation. That’s largely because the region lacks the big tracts of industrial land that big chipmakers are seeking.

Microchip’s potential expansion would not be as big as the “megafabs” that Intel, Micron, Samsung and others are building in other parts of the country. But it could be a major sign that Oregon is staying in the game.

Conversely, if Microchip chooses to build elsewhere, it could raise new questions about Oregon’s viability as a destination for growing chipmakers.

“Due to the complex nature of this topic and the rules surrounding the review of this matter, there is nothing we can say publicly at this time,” Sarah Cagann, a spokeswoman for Gresham, wrote in an email Wednesday.

Microchip declined to comment and the Oregon Economic Development Agency did not respond to inquiries about the project.

It’s unclear how big Microchip’s investment in Gresham would be, what factors weigh into its decision, or how close it is to making a decision about where or when to proceed.

City records show Microchip’s existing 827,000-square-foot factory and associated development occupy only half of its 140-acre Gresham property on southeast Stark Street. The rest of the land is undeveloped.

It’s not clear what it would take to land Microchip. The Gresham factory is the largest for the Arizona-based company. But it also has factories in Colorado, the Philippines, Thailand, Pennsylvania and Germany.

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Some big chipmakers, notably industry heavyweights Intel and Nvidia, are struggling this year amid falling demand for PCs and a saturated data center market. However, demand for Microchip’s products continues to grow, with second quarter sales up 25% over the same period last year.

Microchip manufactures chips that play an essential supporting role in the operation of industrial equipment, automobiles, blueprints, communication networks, medical tools and many other products. The company said output at its Gresham factory doubled in the first year of the pandemic as Microchip scrambled to address global chip shortages and employment grew to around 680.

The Arizona company has continued to expand since then, saying Wednesday it has 150 contractors working to install more than 160 new manufacturing tools inside Gresham’s existing factory.

Microchip said it has added 250 employees in the last two years with plans to add 300 more in the next two years. It is working with Portland Community College and Mt. Hood Community College to prepay tuition and other costs for part-time employees earning degrees in electronics while working as Microchip technicians.

A task force of government and business leaders laid out plans last summer to make Oregon more attractive for semiconductor manufacturing by increasing the inventory of industrial land, accelerating environmental reviews, increasing public incentives and investing in force development. labor.

The task force said in August that Oregon was courting three unnamed chipmakers for possible expansions worth a combined $8 billion. It was not immediately clear if Microchip’s expansion was among the three being considered at the time.

Gov. Kate Brown, who co-chaired the task force, is preparing a package of legislation that she hopes lawmakers will consider on “day one” of their next session early next year. In the meantime, she has set aside $1 million to prepare existing industrial land for development and secured legislative funding to expedite environmental permitting.

The governor warned that Oregon is in a “50-state race” for a share of federal chip spending and must move quickly to get chipmakers to make their site selection decisions in the coming weeks.

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Chip manufacturing jobs in Oregon pay annual salaries that can start around $60,000, and entry-level jobs typically don’t require more than a two-year associate’s degree. Boosters say the industry represents an opportunity to make good-paying jobs available to a diverse population of Oregonians.

A panel of Oregon lawmakers met Tuesday with members of the Oregon Business Council, which led the chip task force, to discuss the future of the state’s semiconductor industry.

“We see this as a real opportunity to create generational wealth and an opportunity for equitable economic development that we may not see again,” said Andrew Desmond of the business council.

Rep. Janelle Bynum, chair of the House economic development committee, is leading efforts to build legislative support to attract more chipmakers to Oregon. She said lawmakers need to be persuaded to act on the fast-track timeline the governor and the chip task force have been pushing.

“There’s an inherent skepticism whenever you say, ‘This needs to be done urgently.’ Legislators are very meticulous and want to get it right,” Bynum said. She said her colleagues are asking for details about the availability of land, whether the chip investment could be made outside the Portland area, the racial impact of the development and the environmental implications of the new projects.

Businesses often make decisions quickly, and Bynum said the state Legislature isn’t set up to move that quickly. So he said his goal is for the state to empower local governments with the land, incentives and other tools to work directly with expanding chipmakers.

“We need to put the right pieces in place so that cities, counties and industry can be agile,” Bynum said.

Microchip paid $184 million for the Gresham factory in 2002, acquiring it from Fujitsu Microelectronics several months after Fujitsu closed its own operations there.

Update: This article has been updated with additional details on Microchip’s Gresham operations.

–Mike Rogoway | [email protected] | 503-294-7699 | Twitter: @rogoway |

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