On Feb. 22, The New York Times published an eye-opening account of Arizona’s longstanding efforts to attract semiconductor investment and capture federal CHIPS Act incentives. The story, “How Arizona Is Positioning Itself for $52 Billion to the Chips Industry,” should be required reading for Oregon legislators, particularly those who sit on the Joint Semiconductor Committee. The committee’s recently released policy framework to improve Oregon’s competitive position is a good start, as OBI President and CEO Angela Wilhelms told the committee this week. But it is not enough.
Last year, the Oregon Semiconductor Competitiveness Task Force, co-chaired by Sen. Ron Wyden, identified opportunities for and obstacles to both private sector and federal semiconductor investment in Oregon. These are presented in the panel’s August 2022 report, which echoes many of the recommendations contained in OBI’s Growth and Innovation Roadmap.
Both reports point to land use and regulatory challenges that erode Oregon’s competitiveness not only for semiconductor investment, but for all manufacturing investment. Likewise, both highlight the importance of tax policies that Oregon either does not have or must preserve. To make Oregon truly competitive, Wilhelms argued, the Legislature’s policy package must go beyond its initial allocation of $200 million and include tax incentives designed to drive long-term investments and signal globally that Oregon is a center of research and innovation.
Such incentives include a substantial research and development tax credit, as Oregon is one of only 12 states without such a credit. To become competitive, Oregon also must create a capital investment tax credit and protect such important tools as the state’s enterprise zone and strategic investment programs.
Such investments in growth and innovation pay off. As Wilhelms noted, ECONorthwest recently conducted a study of the semiconductor industry and the impacts of potential investments. The creation of a generic semiconductor campus involving a $100 million state investment would break even in just two years and provide $2.8 billion in net revenue over 20 years. And that is to say nothing of the related local revenue or the high-paying jobs that would be created.
Go here to read Wilhelms’ full testimony.