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Monday, February 21, 2011

Jobs! No, not you.

Amidst all the local hoopla surrounding the President's visit to Hillsboro on Friday, little or nothing was said about Intel's announcement that they are going to build a wonderful new $5 billion chip plant -- in Arizona.

Comments (9)

AGAIN? I swear, that chip plant is the tech arena's answer to the Flying Dutchman. (So long as it doesn't end up with a massive waste of taxpayer subsidies, like Intel's big Austin facility in Austin that was shut down before it opened. At least when Texas Instruments gets a huge state subsidy in exchange for campaign contributions, it actually builds the unneeded and overly expensive facility.)

"Intel's announcement that they are going to build a wonderful new $5 billion chip plant"

To be fair, these chip plants are very automated without a lot of labor content, so the buildings Intel has here in Oregon probably have more labor/sqft than a chip plant easily.

I guess since about $4B of that price is the eqpt (which gets a fast depreciation, but is still an improvement for property taxes), it still would be a loss in tax revenue here.

I think Intel's thought is at 15,000 employees, they are kinda getting to be a large contributor to local taxes and in turn a large target.

Under Oregon's SIP (Strategic Investment Program), one of numerous statutory property tax exemption or special assessment programs, Intel's big business investments are capped at $100 million. So, no matter how much they invest (and regardless of what its worth), they only pay up to the cap. There are some fees that apply to amounts above the regular value cap, but those too are capped. See ORS 285C.600 et seq., then look at the rest of that chapter, 285A, 285B, regarding grants, abatements, special valuations, exemptions, income tax credits, loans, bonds, etc., etc.

This state is 28 BILLION in the hole and counting. Brown is trying everything from eliminating state cars and state paid for cellphones for lots (not all but lots) of state workers to banning state agencies from handing out SWAG...don't laugh, the state blew about 7-and a half million on that crapola in the last 3 years. By the by, Mike Royko, the Chicago columnist, later admitted he was wrong to label Brown as "Gov. Moonbeam."

Sorry. Meant to post to story about the baseball team.

Didn't Intel recently (last six months) announce some sort of expansion here in Oregon as well?

That announcement came the day after the Arizona governor signed into law massive reductions in corporate taxes and other incentives for businesses to start, build and expand. Arizona seems to be getting it in the right ways


They did. http://newsroom.intel.com/community/intel_newsroom/blog/tags/d1x

Intel doesn't make fabrication facilities in Oregon straight away - they make development fabs here, which design the process used in other fabs such as the one they are building in Chandler, AZ. Once the facility here in Oregon is replaced with a new development fab, it turns into a production fab until the facility is no longer useful for that purpose. Then it is mothballed.

Intel's general process here in Oregon is the following:

Dev fab > Prod fab > Prod fab for simplistic designs using last-generation processes > mothball.

They have done this for the last 20 years. At Ronler Acres alone, they had D1B, which turned into Fab 20 when they opened D1C, which turned into Fab 30 when D1D opened, and D1D will turn into a fab when D1x opens in 2013. When they sink $5,000,000,000 into a building, they use it for as long as they feasibly can.

Besides I think the last thing we want to be complaining about is that they are doing this anywhere in the US, rather than Malaysia, Costa Rica, etc. I'd rather they build in Chandler than Kuala Lumpur.

MachineShedFred above is entirely correct in regard to Intel's manufacturing strategy. Intel follows a strategy termed "copy exactly". A Development Fab such as D1D is perfected here in Oregon then built out at their locations around the world. We are very lucky to have this process in place.

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