Consolidating On An Oregon Campus

Intel shifts development of flash memory production technology from California.

Now, even more than before, Oregon can lay claim to the label "Intel Inside." Intel Corp., a $30.1 billion California-headquartered semiconductor maker, is shifting development of its flash memory production technology from Santa Clara, Calif., to its Ronler Acres Campus in Hillsboro, Ore., 18 miles west of Portland. With more than 14,000 employees, the campus is part of Intel Oregon and is Intel's primary site for the development of new manufacturing technologies. In April of last year, Intel dedicated a fabrication plant on the campus for development of manufacturing technology for future microprocessors on 300-millimeter wafers -- an investment, including tools, of about $2 billion. "To put it simply, with the increasing cost of equipment and facilities, it makes sense to consolidate 300-millimeter development on one site to benefit from the use of existing 300-millimeter capital investments," says Bill MacKenzie, a spokesman for Intel Oregon. "The shift [of flash-memory production technology development] fits in with Intel's constant drive to improve productivity and hold down costs." Flash memory is used in such small electronic devices as cell phones, personal digital assistants (PDAs) and digital cameras. "Intel must continue to invest in the future by developing new manufacturing technologies and capabilities. We do this because we cannot save our way out of a recession. We can only grow out of a recession with new products and new technologies," Craig Barrett, Intel's CEO has said repeatedly during the past couple of years. A "handful" of people are expected to relocate from California to Oregon this year to begin planning the larger transition of flash-memory production technology development, says MacKenzie. "The bulk of the transition will begin at the end of 2005 and the beginning of 2006." The company considered several other options, but "it was determined that shifting flash development to Intel Oregon made the most sense," says MacKenzie. The benefits derived from consolidating 300-millimeter technology development on one campus were "the key reason" for choosing Oregon, he reiterates. Neither the state of Oregon nor Washington County, where the Ronler Acres campus is located, offered any specific economic-development incentives to encourage the shift from California. However, "Washington County's and Hillsboro's positive investment environment did, of course, play a role in the decision," says MacKenzie. For example, in 2003 the county permanently waived a potential employment fee permitted under the 1999 Strategic Investment Program agreement between Intel and the county. That provision could have required Intel to pay the county $1,000 for each additional manufacturing employee if Intel Oregon's manufacturing employment exceeded 5,000. "Intel and Washington County were in agreement that we should work together to hold down costs, encourage efficiencies, and preserve and grow opportunities for good jobs," says MacKenzie.

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