Locations -- Empty Plant Attracts Microchip Technology

Plant: New life has come to a shuttered semiconductor plant in northwestern Oregon. Chandler, Ariz.-based Microchip Technology purchased the 826,000-square-foot plant last summer for $183.5 million and will begin production there this July. Fujitsu Microelectronics Inc. closed the doors of the plant in November 2001, leaving 900 skilled workers without jobs. Microchip expects to hire about 200 employees by the end of this year, with preference being given to former Fujitsu employees. In fact, the immediate availability of a trained workforce was one of the attractions of the plant, says Robert J. Lloyd, vice president of services and facilities management for Microchip. "We had the trained workforce right there in the neighborhood ready to go to work, and they [previously] had been at work on the equipment in that plant." Lloyd says minor cosmetic upgrades were needed, but otherwise the plant included all of the necessary equipment and infrastructure to produce Microchip's microcontrollers, which are used in a wide variety of industrial and consumer appliances and other products. Fujitsu never brought the plant to full-scale production, he says. Corporate Strategy: Microchip had planned on expanding production at a facility it owns in Puyallup, Wash., but canceled that plan when it learned of the availability of the Gresham plant. The Puyallup site now is for sale. Lloyd says stepping into a ready-to-go plant will save Microchip substantial capital investment and will allow product to reach market 18 months sooner. The company will produce its newer-generation microcontrollers at the plant, including those that allow for reprogramming. Lloyd can't be specific on production goals but says the plant has the potential to double the company's revenues. Microchip had sales of $571.3 million for the fiscal year ending March 31, 2002. The company says the plant could be up to high-volume production within five years. Community: Lloyd emphasizes that in addition to workforce, Gresham's "business friendly" attitude prompted the plant purchase. The company will receive an estimated $17.3 million in tax breaks through the State of Oregon's Strategic Investment Program. Both the City of Gresham and Multnomah County had to approve the tax exemptions before they were approved by the state. The city, county and the Oregon Economic and Community Development Department worked to streamline the approval processes so that Microchip could purchase the plant before Fujitsu turned off air-handling equipment, thus preserving the clean-room environment. "It was all about timing for Microchip," says Gresham Mayor Charles Becker. Says Lloyd: "It was one of the marriages made in heaven, if you will." Locations profiles selected siting and facility strategies by manufacturing companies. Send submissions to Senior Editor John S. McClenahen at [email protected].