As Oregon looks to increase semiconductor manufacturing, rural parts of the state like Columbia County fear they’ll be left behind.
The United States and Oregon made significant investments in the semiconductor industry in 2022 through the $280 billion CHIPS Act and Future Ready Oregon’s initiative to invest hundreds of millions into Oregon employers.
In January, Gov. Tina Kotek and House Speaker Dan Rayfield announced plans to funnel $200 million dollars into the state's semiconductor industry.
While semiconductor industry growth has plateaued in large manufacturing states like California, Texas, New York and Massachusetts after a massive decline in the early 2000s, Oregon’s semiconductor landscape has slowly grown since the mid-2000s.
As reported by Pamplin Media Group’s Troy Shinn, despite accounting for only 1% of the U.S. population, Oregon hosts 15% of the country’s semiconductor jobs, says Greater Portland Inc., a public-private partnership that aims to support job development.
Oregon Business Plan says Oregon, and the rest of the United States, is on course for another semiconductor surge.
Historically, Washington County has dominated the bid for Oregon’s Silicon Forest, due to a density of global manufacturers like Intel, Jireh Semiconductor, Qorvo, Lattice, and Retronix in Hillsboro.
The technology sector contributes $12.4 billion to the Portland metro area and another $15 billion statewide, according to Greater Portland.
Now, rural communities across the state are vying for a seat at the high-tech table.
The semiconductor conversation
Vince Porter, Gov. Kotek's economic development and workforce policy advisor, testified before the Joint Committee on Semiconductors on Feb. 8. He told lawmakers the Kotek administration is committed to seeing smaller manufacturers and companies get assistance in applying for CHIPS Act Funds.
“We don’t want to sit back and wait for the phone to ring on this. … We have already had some contact with smaller manufacturers who have expressed an interest to apply,” Porter said. “Some of the applications, the consulting fees will be in the six digits, even for smaller manufacturers. And we do not want them to be left at the end of the line.”
Sen. Janeen Sollman, a Hillsboro Democrat who co-chairs the Joint Committee on Semiconductors, told Pamplin Media Group she has heard concerns from rural communities about missing out on the investment funds.
"It’s absolutely something I’ve heard all along this process. … People say to me, ‘Of course you’re a cheerleader for this area, because you represent this area,’” said Sollman, whose Senate district also includes Forest Grove and Cornelius. “And I’ve really tried to be very clear: This is bigger than Hillsboro. This is bigger than Oregon. This is an opportunity for us to address a supply chain in the United States.”
But where does this leave Columbia County, a rural county on the outskirts of the Portland area that has several hundred acres of undeveloped industrial land but no current chip manufacturers?
While Sollman said the committee has legislators from across the state to ensure every community is represented, none of the three lawmakers — all Republicans — who represent communities in Columbia County are on the committee.
Barriers to chip manufacturing
Paul Vogel, director of the Columbia Economic Team, said Columbia County’s largest barriers to developing a tech manufacturing industry are water, power and the county’s image.
“Between water, 10 million gallons a day and 100 megawatts of power, those are daunting. You have to have those in place in order to go effectively market a chip plant. We wouldn't necessarily do that,” Vogel said.
The available industrial land in Columbia County, at least 700 acres across 33 sites, is almost all privately held.
“Port of Columbia County is a port district like the Port of Portland, but they don't own anywhere close to the real estate the Port of Portland has,” Vogel said.
The Port of Columbia County’s largest industrial property, by far, is the Port Westward Industrial Park near Clatskanie.
Port Westward’s calling card is power generation. Portland General Electric operates multiple power plants there, and it also hosts the Columbia Pacific Bio-Refinery and is slated to be the site of a NEXT Renewable Fuels production facility if it clears the land use and permitting processes.
Outside of Port Westward, the Port of Columbia County doesn’t have any industrial sites anywhere near large enough to support a chipmaking facility.
This presents a challenge when the economic team is trying to pull manufacturers into the county, because they have to mediate between a private landowner and the manufacturer and the county or city.
But given the time and capital, could the economic team site a chip plant in Columbia County?
“Absolutely,” Vogel said.
Getting in the mix
The Legislature hasn't allocated funding specifically for industrial site readiness. Currently, the funding offered is for researching where viable industrial lands are, and to provide companies seeking CHIPS Act funding with support for their fees and research.
“The conversation around land is intensifying, and we're trying to make sure that we have a place in that conversation,” Vogel said, “if only to raise awareness that close by — maybe not in Washington County, but close by — you have opportunities here.”
Vogel said Columbia County has to compete with Washington County for attention from prospective tech manufacturing businesses.
With Washington County just over the hill and already developed for industrial businesses, Columbia County struggles for a place in the conversation.
“We are less likely to attract a chip manufacturer that needs enormous resources in terms of water and power, in addition to the land,” Vogel said.
Columbia County is the largest “labor shed” — an area from which employment centers outside the county pull much of the workforce — in the state, according to Vogel, because of its proximity to Portland, Hillsboro and Beaverton, as well as Southwest Washington, to which it is linked by the Lewis and Clark Bridge.
But many tech manufacturers looking to locate themselves in Oregon don’t even know Columbia County exists.
“You have to educate people on that, because they have no idea where Columbia County is. That's part of the conversation,” Vogel said.
Silicon Forest is on shaky ground
Sollman said the rising tide of funding to large established chip plants will lift all boats.
“What I would say is that there is going to be plenty of opportunity when we build fabs and R&D," she said. "There’s going to be plenty of opportunity for supply chain(s). I think Intel showed us a map that showed that Intel’s supply chain goes to almost every county in Oregon. The sophistication and technology and jobs we have in the Portland metro area feed into our state coffers and provide opportunity for things all the way across the state."
Columbia County is part of that supply chain. South Columbia County, in particular, is home to several manufacturing companies.
“We attract smaller supply companies, allied industries, allied producers, service providers, product makers complementary to the chip industry in Washington County,” Vogel said.
Pacific Stainless in St. Helens does much of its business selling equipment to tech companies, including making chip racks for the semiconductor industry. One of its largest clients is Lam Research Corp., which has campuses in Tualatin and Sherwood.
However, the tech industry in Washington County is on shaky ground presently.
Intel announced large cuts to pay and benefits this year due to a 32% decline in revenue, according to the company’s fourth-quarter earnings report released Jan. 26.
Intel hasn’t officially announced mass layoffs in Oregon yet, but the chip manufacturing company laid off over 500 people in California in 2022.
Intel is also downsizing expansion plans, including a $700 million planned datacenter research lab in Hillsboro, which the company slashed entirely.
Lam Research also announced cuts this year, reducing its global workforce by 7%.
The company did not specify to Pamplin Media how many employees in Oregon were impacted, although it did note that Oregon sites were affected by the downsizing.
Ripple effects
If large tech companies struggle to stay afloat, that could hurt companies further up the supply chain that do much of their business with the tech sector. That includes employers in Columbia County.
It could also be bad news for smaller communities that would like to bring high-tech jobs to town, unless they can successfully market themselves as a lower-cost alternative to well-developed industrial centers like Hillsboro. Companies that are cutting costs can be expected to be shy about expanding and investing in new areas.
Intel and other Washington County tech manufacturers initiating large layoff plans could also cause Columbia County’s unemployment rates to increase.
According to the U.S. Census Bureau, as of 2019, about four in five workers living in Scappoose reported that their primary jobs were outside Columbia County. Countywide, it was a similar story, with nearly three in four working outside Columbia County.
Oregon Employment Department regional economist Erik Knoder said 6,168 Columbia County residents worked in the goods producing industries, which includes manufacturing, in 2019.
Of these, only 1,576 worked in those fields within the county.
Columbia County Innovation
Craig Campbell, executive director at the Oregon Manufacturing Innovation Center (OMIC) in Scappoose, said he’s not too concerned about lost jobs if the tech industry downsizes in Washington County.
“Ideally, you want to have opportunities for them to find other places to work,” he said. “We have … most of the aerospace job opportunities in this area, and the demand for those is increasing volumes … and those are people who can probably transition into those jobs with not too terribly much retraining.”
Campbell’s goal is twofold — to develop tech manufacturing in Columbia County and provide training for alternate fields should that industry fold.
“Really, the long-term hope here is that the citizens of Columbia County won't have to go to Portland or over to Hillsboro or Beaverton,” he said. “If they're trained for a high-tech job, we're hoping they'll be able to stay right here.”
OMIC is also building an Additive Innovation Center, which is designed to help companies transition to 3D metals printing.
“That's going to take a whole bunch of people who are very intelligent, or very good at computer design and operating systems that you really have to know what you're doing to operate them and require high tech skills,” Campbell said.
Senate Bill 4
Officials and economists are hoping that state and federal support can right the ship for the Oregon and U.S. high-tech and manufacturing sectors.
Vogel isn’t aware of any Columbia County businesses applying for CHIPS funding, but he expects his team will be approached to partner, given their role in the county.
“What we are seeing is a significant increase in site selector inquiries for large parcels — 400-plus acres — and the Columbia Commerce Center in Scappoose is one of the few, if not only, sites in the region that meets the criteria for shovel-readiness and appropriate zoning,” he said.
Vogel’s team is also following Senate Bill 4, which directs the Oregon Business Development Department to develop a grant and loan program to support businesses applying for financial assistance under the CHIPS Act.
Land availability is one of the key elements of any proposal that seeks funding from the act, and that is at the core of the debate around SB 4, according to Vogel.
While SB 4 develops, Vogel is watching for the state to announce funding for semiconductor materials and equipment facilities.
“Which may present more manageable opportunities for investment in allied materials and support services in Columbia County, not just wafers,” he added, “and another one for research and development facilities, in the fall.”