Will the nation look to northwest Oregon as a leader in national security research?
Lawmakers sure hope so, saying the importance of maintaining Oregon’s status as a leader in the semiconductor industry extends far beyond the local economy. Domestic computer chip production has vast implications for national security, too.
National security concerns
Testimony before Oregon’s Joint Committee on Semiconductors over the past eight weeks has broadened the context of last year’s CHIPS and Science Act, which allocates billions in federal tax breaks and grants to bolster domestic semiconductor research and manufacturing. The bill’s aim is higher than just creating jobs.
Chris Miller, author of “Chip War: The Fight for the World’s Most Critical Technology,” testified before the committee on Feb. 8. He said the United States has fallen far behind in global computer chip research and production.
In fact, 90% of the most advanced computer chips in the world are all produced in Taiwan, which not only puts the United States in a precarious position to compete in the modern economy, but it’s also a risky geopolitical position given what’s happening in East Asia.
“As the Chinese military grows its power and continues to threaten to expand year after year, it poses not only an extraordinary risk to the United States’ tech sector but also the entire world economy, which today is critically dependent on chips made in Taiwan,” Miller told Oregon lawmakers.
As China continues to demonstrate its desire to exert control over Taiwan — an island democracy of nearly 24 million people, located roughly 100 miles off the Chinese coast — the United States find itself at risk of losing the main supplier of advanced chips.
These chips are not only increasingly part of the fabric of the modern economy — with advanced chips being crucial for everything from smartphones to automobiles — but also for the modern military. The United States relies on foreign chip production for its aircraft, navigation systems and more.
“That seems like an extraordinary risk that we haven’t though enough about or taken enough steps to remedy,” Miller said on why he wrote the book, which lawmakers referred to as a wake-up call.
He credited this reality for President Joe Biden making the CHIPS Act a high priority, and the investments that are expected to funnel toward states all over the country carries this higher significance, too.
“I would urge the committee not only to take into consideration the economic implications, but also the national security implications,” Miller said.
Oregon’s chance to lead
Sen. Janeen Sollman, D-Hillsboro, who co-chairs the joint committee, said Oregon lawmakers see the issue as a huge opportunity for Oregon — but one that has implications far beyond the Beaver State.
The conversations being hashed out inside the Oregon Capitol are being watched at the national level.
“This is bigger than Hillsboro,” Sollman told Pamplin Media Group. “This is bigger than Oregon. This is an opportunity for us to address a supply chain in the United States, which is why Senator (Ron) Wyden’s office calls my phone frequently to check in on this, because it’s so incredibly important to Oregon and to the United States.”
Oregon already hosts 15% of the nation’s semiconductor jobs, thanks largely to Intel’s presence in Washington County. Not only is Hillsboro a hub of the larger tech industry, but it’s specifically where some of the nation’s most advanced computer chips are developed.
As such, lawmakers see Hillsboro as the most viable market to compete with overseas companies. Intel executives, including chief executive officer Pat Gelsinger, lobbied hard for the CHIPS Act’s passage for this very reason.
As the entire semiconductor industry has grown around Intel in Washington County, it has many conditions that are ripe for securing some of the CHIPS Act dollars — from an existing supply chain to a pipeline of labor.
The Hillsboro School District is the first in the nation to have a federally certified advanced manufacturing apprenticeship program for high schoolers, a stepping stone to hopefully feed into tech sector careers.
These conditions are why the state is eyeing Hillsboro and nearby North Plains for 500-acre semiconductor fabrication sites that would vie for CHIPS Act funding.
But for Hillsboro, or really any community in Oregon, to secure the large CHIPS Act investment that Oregon lawmakers are hoping for, industrial land needs to be ready to build on. Lawmakers have identified a lack of so-called buildable land as a key deficiency in Oregon’s current standing for more industrial development.
Despite Hillsboro already having a longstanding policy to invest in infrastructure expansion in industrial areas, officials say more needs to be done to keep the region at the forefront.
“There are significant obstacles that I don’t think get as much attention as they really warrant,” said Dan Dias, Hillsboro’s economic and community development director. “That is having the infrastructure and having the land availability to meet the demands of future campus opportunities.”
In presenting before the semiconductor committee last month, Hillsboro’s government relations manager, Andy Smith called a large-scale fab site in Hillsboro “a fiction without legislative action.”
Sollman says this is why the committee has really focused on site readiness in its first round of testimony and legislative action.
“The first step is the industrial site readiness,” Sollman said. “Then, the second step will be to have a workgroup on a (research and development) tax credit.”
She said these conversations are helping her and other legislators craft Senate Bill 4, which will begin its legislative journey in the semiconductor committee and then work its way through other committees on taxation and finance before going to a vote.
Not only is SB 4 expected to contain a provision recommending the renewal of Oregon’s research and development tax — which was repealed in 2017 — but it also contains a section that would grant Gov. Tina Kotek the ability to approve UGB expansions for future industrial computer chip sites, rather than having to go through the years-long land use process.
“I’m ready to just really present this bill and move this forward … because this is going to be so incredibly important for Oregon and for the United States,” Sollman said.