CHIPS Act Success Shows Value of Hard Work, Supportive Policy

By Oregon Business and Industry

On March 20, the Biden administration announced an $8.5 billion investment in Intel and promised an additional $11 billion in loans to help build plants in several states. According to The Oregonian, Intel’s award is the largest from the $52 billion CHIPS Act, which Congress approved in 2023.

Intel says it plans to spend more than $100 billion in the United States over the next five years on chipmaking facilities in Arizona, New Mexico, Ohio and, of course, Oregon. Of that total, Intel plans to invest a staggering $36 billion in Hillsboro, where the company develops new chips.

Intel is not alone in its success. Microchip Technology won $162 million in CHIPS Act support in January, including $72 million for an expansion of its Gresham semiconductor factory.

Winning CHIPS Act support is a remarkable achievement for Intel, Microchip Technology and the thousands of Oregonians they employ. Their success validates the hard work many people, including industry and elected leaders, have done over the past two years to improve the state’s sagging competitiveness.

In 2022, the Oregon Semiconductor Competitiveness Task Force urged legislators to position the state to capitalize on CHIPS Act support. The task force’s August 2022 report detailed many competitive deficiencies requiring urgent legislative action, including the state’s shortage of buildable land and its inadequate incentives, including the glaring absence of a research and development tax credit. The report also described a regulatory environment that charitably could be called unproductive.

Many people, including OBI’s government affairs team, worked tirelessly during the 2023 legislative session to address the major problems identified by the task force’s report. The results include SB 4, which, together with a companion bill, provided $240 million in grants and loans for semiconductor and advanced manufacturing companies. SB 4 also gave the governor temporary authority to circumvent land-use rules to make a handful of sites available for semiconductor projects. HB 2009, meanwhile, created a research and development tax credit, though it is too modest and narrowly targeted.

That work continued in 2024 and included HB 4154, the OBI-supported bill that creates a $30 million fund to train workers needed by Oregon’s semiconductor industry.

The job is far from finished. OBI will continue to work in 2025 and beyond to address the tax and regulatory burdens to which the free-market Cato Institute attributes Oregon’s “long-term and sustained” competitive “deterioration.” Oregon, says Cato, “is the second most worsened state since 2000, after Hawaii,” in its Freedom in the 50 States rankings.

That deterioration is echoed elsewhere by various organizations. Between 2022 and 2023, Oregon’s ranking in CNBC’s Top States for Business index fell three places, to 21. Oregon’s place was weighed down by its business friendliness rank (43) and its cost of doing business rank (31). Oregon fared even worse in the nonpartisan Tax Foundation’s 2024 State Business Tax Climate Index, which rates Oregon’s corporate tax regime the nation’s 49th best. Thank goodness for Delaware.

In preparation for the 2025 legislative session, OBI is developing a legislative agenda that builds on the 2023 Growth and Innovation Roadmap. With a particular focus on regulatory modernization, this agenda will encourage legislators to adopt policies that help businesses of all types and sizes and in all parts of the state thrive.

OBI looks forward to working on behalf of its members in developing and implementing this agenda – and to citing Oregon’s CHIPS Act success as evidence that supportive policy does encourage business investment.

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