Intel signs first Strategic Investment program agreement.
Intel signs D1B Redevelopment Agreement, a contract for purchase of 268 acres in the Ronler Acres subdivision in Hillsboro for $7.2 million.
1995
Intel closes on purchase of Ronler Acres (RA) Campus.
First Intel buildings (RS1, 40,000 sq. ft; RS2, 40,000 sq. ft.) open at RA Campus.
Intel Oregon employment breaks 10,000.
High-tech becomes state's largest manufacturing employer, surpassing forest products industry.
Intel becomes Oregon's largest manufacturing employer.
Intel begins sponsorship of Hillsboro's Rose Festival* Airshow.
1996
AmberGlen Campus occupied
Manufacturing Support Building (RA1, 319,000 sq. ft.) open on Ronler Acres Campus.
Fab 4 closes as Intel's last 4 inch wafer fab.
1998
Intel Oregon office and manufacturing space breaks 5 million sq. ft.
1999
Volunteer Matching Grant program to K-12 schools breaks $100,000.
2000
Intel Oregon employment breaks 15,000; Intel acquires West Union Campus.
Intel® Teach Program launched in Oregon.
2001
Intel Oregon opens first 300mm wafer fab in the United States (D1C) at Ronler Acres Campus.
2003
Intel Oregon opens D1D 300mm Process Development Fab.
Intel Oregon announces plans to invest at least $400 million to remake Fab 15 on the Aloha Campus into a C4/Sort facility.
Intel Oregon History – Building on Success
Steve Grant, a Gary Cooperish engineer from the heartland, showed up for his April 1981 Intel interview at the company's Aloha Campus all decked out in a blue suit, white shirt and tie. The Intel executives greeted him in their blue jeans and polo shirts. Intel's offer – an entry-level engineering job at $22,500 a year. He took it.
Today, after side trips to Intel operations in New Mexico and Texas, Grant runs a cutting-edge fab at Intel Oregon's largest campus, Ronler Acres in Hillsboro.
Just a dozen years before Grant accepted Intel's offer, Intel had begun its momentous journey. That was 1968, the same year "Hair" opened on Broadway, anti-Vietnam war riots erupted at the Democratic National Convention in Chicago, and the winds of change were in the air.
NM Electronics* Becomes Intel Corporation
In July of that year, Robert Noyce and Gordon Moore, formerly with Fairchild Camera* and Instrument Corp., incorporated a new venture, NM Electronics*, subsequently changed to Intel Corporation. "We are the true revolutionaries," Moore said.
Just 10 years before Grant accepted Intel's offer, Intel had introduced the world's first commercial microprocessor, the 4004, invented by three Intel engineers. Though the first was primitive by today's standards, the microprocessor is now the most complex mass-produced product ever. The original system with a mere 2300 transistors performing about 60,000 calculations in a second has evolved to today's Intel® Pentium® 4 microprocessor, with approximately 42 million transistors and running at a rate of 1.5 billion hertz per second.
Intel has followed a similar path from simplicity to complexity in Oregon, transitioning from a small manufacturing fab in Aloha to a critical part of a worldwide corporation and an immense driver of Oregon's economic engine.
But it wasn't Intel that started Oregon's high-tech explosion, nor was it Tektronix*, the company most often thought of as the petri dish of high-tech in Oregon. "While Tektronix was unquestionably the progenitor of Portland-area high technology, even it was not born into barren landscape," concluded a 2000 Portland State University study on the Portland Metropolitan Area economy. *
Birth of Oregon High-tech Industry Dates to 1944
The birth date of Oregon's high-tech industry was probably 1944, when Brown Engineering*, which evolved into Electro Scientific Industries*, was founded. Tektronix started up the following year, in 1945. Within 20 years, Tektronix grew to be Oregon's largest manufacturing firm and by the 1970s it employed over 20,000 people.
Oregon landed on Intel's radar when a member of the Tektronix board, interested in expanding Oregon's high technology universe, called Intel's co-founder, Gordon Moore. "You should consider Portland. It's got a good quality of life and a good labor pool," Keith Thomson, a former Intel Oregon Site Manager, recalls. "We were looking for a place within an hour or two by airplane from San Jose, which opened up Seattle, Salt Lake and Phoenix," said Thomson.
1970s – Intel Lands in Oregon
In 1974, when the minimum wage was $1.60 and Portland Saturday Market was just starting up, The Oregonian1 reported "a major electronics manufacturer has taken options on a site in Washington County for a plant," following several months of negotiations. That company was Intel.
Intel bought property in Aloha, where it planned to build its first Oregon facility, a manufacturing building to be designated Fab 4. Because of economic uncertainties, Intel postponed opening Fab 4 until 1976, when a few hundred employees reported to work.
Intel initially saw itself as such a minimal, low profile presence in Oregon that Fab 4 lacked even an Intel name on the building. The company remained low-visibility in Aloha and Oregon well into the next decade. In 1978, Intel built its second Aloha fab, Fab 5. By the end of the decade, Intel's Oregon employment had grown to 2,800, but it was still a bit player in Washington County's and Oregon's economy.
In 1979, Intel spread out, buying property for a Hawthorn Farm Campus in the rural village of Hillsboro. In the late 1950s, Hillsboro's only industry was a Bird's Eye* cannery, processing products from the area's farms. By the 1970s, the cannery was empty, farming and forest products industries were shrinking and Hillsboro was looking for new economic stimulus. Sensing a potent potential in high technology, the city pursued high-tech companies with special vigor.
1980s – Intel Oregon Rises in Prominence
In 1980, Intel began building in Hillsboro at a second campus, Jones Farm. That same year, signaling Oregon's rising prominence, the company held its first shareholders meeting outside the Silicon Valley at Greenwood Inn* in Beaverton, another Oregon community experiencing swarms of new residents.
In the years to come, Intel solidified its presence in Washington County, while stimulating other companies to locate and grow there.
"Intel has made Hillsboro the economic engine for the entire state," Gordon Faber, the city's mayor, said in 2000.
"It's impossible to find a high-tech company in Washington County that isn't touched, if not founded, by someone from the world's largest chip-maker," the Oregonian added that same year.
In 1982, Casey Powell and partner Scott Gibson rallied co-workers at Intel Oregon to quit their prestigious jobs and strike out on their own. The team went on to form Sequent Computer Systems, Inc.* in 1983. When acquired by IBM* in September 1999, it had about 2,900 employees, including 1,400 at its Beaverton headquarters. Lattice Semiconductor* also was founded by Intel émigrés. "A core group of people from Intel had a very good idea and wanted to capitalize on it, and the rest is pretty much history," Terry Dols, the company's director of human resources, told The Oregonian.
Meanwhile, Intel went on to become a $36 billion company and the preeminent building block supplier to the worldwide Internet economy.
Modernization of Oregon's Tax System Stimulates High-Tech Growth
Oregon has shared in Intel's success. Intel Oregon is now the company's largest and most complex site in the world. From a few hundred employees in 1976, Intel Oregon has grown to 16,000 employees on a seven-campus site. Everything Intel does is done in Oregon.
Though Intel grew steadily during the 1980s, as Oregon entered the '90s, Intel still had not taken the giant leap to local prominence in Oregon. One reason was Oregon's antiquated tax system, which failed to deal fairly with high-tech companies that made heavy capital investments.
As the '80s began, Oregon was feeling the harsh squeeze of a recession. State leaders were exploring ways to accelerate the state's economic diversification. They asked industry executives what the state could do to encourage more high-tech development. The consistent response -- The high-tech industry needed quality education and research resources nearby to prosper and grow.
In 1982, at the low point of Oregon's economic slump, legislators met in special session to drastically cut state budgets. Their sole investment – the one place they put new money – was into a fund to create the Oregon Consortium on High Technology Education. Industry matched the state investment and that money was used to create new programs in engineering and computer science at public and private colleges and universities. It was the high-tech industry's first major collective involvement at the legislature. Later that year, because of the industry's new visibility, the American Electronics Association's Oregon Council hired its first full-time lobbyist to represent the industry in Salem.
Oregon was struggling to recover from its economic woes, and high-tech's growing jobs were welcomed in Salem. In 1984, then-Governor Vic Atiyeh turned to the high-tech industry for help in persuading lawmakers to repeal a tax that foreign-parented companies said was a major obstacle to their investment here. Oregon was one of a handful of states using the so-called "unitary method" to calculate corporate taxes. It required foreign-owned companies to reveal worldwide business information they considered proprietary. Promptly after the repeal of the unitary tax, substantial investment in Oregon facilities by Japan-based companies boosted high-tech employment.
1990s – Strategic Investment Program (SIP) Plays Major Role in Intel's investment in Oregon
Former Governor Barbara Roberts sought to stimulate more investment in high-tech jobs by proposing to cap property taxes on capital-intensive investments exceeding $100 million in new facilities – if local governments agreed and the company agreed to local terms and conditions. The Legislature passed her Strategic Investment Program (SIP) in 1993.
One of the first tasks of former Intel Vice President and Oregon Site Manager, Keith Thomson, was to accompany Governor Roberts and some Oregon Economic Development Department (OEDD) representatives on a trip to Intel's Santa Clara Headquarters where they met with Intel's president, Craig Barrett. Barrett made it clear that, even though the state had passed legislation at the state level, if the SIP was not implemented at the local level, there were two particular Intel projects that would most likely go to different states.
The local implementation process went forward in 1994, playing a major role in securing Intel's investment of $3 billion in new, state-of-the-art facilities and supercharging the expansion of Oregon's economy.
SIP allowed Oregon to compete for large capital investment projects, such as semiconductor fabs. Three SIP agreements are in place. In 1994, Intel successfully applied for SIP to be applicable to two Oregon projects: the development of a new campus at Ronler Acres and the conversion of D1A in Aloha to Fab 15. In 1999, Washington County approved a third SIP agreement with Intel, SIP'99, which created the climate for Intel to invest up to $12.5 billion over the next 15 years.
With approximately 16,000 employees at the end of 2000, Intel Oregon is spread over Washington County, with facilities in Hillsboro, Beaverton and Aloha. Additional facilities are located in downtown Portland, where Intel's Smart Toy Lab is located in the Pearl District, and in Bend, where a small contingent of engineers sits.
Everything Intel does it does at Intel Oregon. This includes microprocessor development and manufacturing, e-business, marketing, mergers and acquisitions management, finance, communications products, mobile platforms and Intel legal.
Intel's Economic Impact on Oregon
It's clear today that the high-technology industry is a key economic engine for Oregon. Since 1995, high-tech has been the largest manufacturing employer in the state.
Much of the company's economic impact is created when Intel's employees take their paychecks (the average covered wage for Intel Oregon employees is approximately $101,000), and buy groceries, clothes, cars, and a host of other items in the local economy.
Intel also affects the economy by directly purchasing goods and services from local firms. In recent years, Intel has purchased goods and services from as many as 2,500 Oregon companies a year, buying everything from engineering services to silicon wafers.
ECONorthwest*, an economics consulting firm, recently traced the effects of the company's spending – and that of its employees – and found that nearly 40 percent of all the economic output produced in Washington County is generated by Intel's on-going operations. In addition, ECONorthwest estimated that more than one in six jobs in the County are supported directly – or indirectly – by Intel.
Intel's plans to invest billions more in Oregon in the future will extend that positive economic impact. Intel will hire local labor – such as engineers and construction managers – to install new chip-making equipment. It is expected that all of the construction management, 90 percent of the engineering, and 90 percent of the installation and set-up labor will be purchased in the region.
In the typical year during the capital program, Intel's proposed spending will increase the County's economic output – that is, the production of goods and services in the County – by about $120 million. That amount of production will boost the personal incomes of Washington County residents by an average of $65 million each year. The investments will allow Intel's operations in Washington County to continue, maintaining Intel Oregon as a premier research & development and manufacturing site.
ECONorthwest, analyzing Intel's impact on the budgets of local governments and school districts, concluded:
Intel pays about 15 percent of the state's total corporate income tax.
Each year Intel and its employees pay in taxes and fees nearly three times what it costs to provide services to the company.
Intel Oregon and its employees pay three times as much into the Public School System as it costs to educate the children of Intel employees, leaving the balance to serve the needs of other Oregon children.
And Intel Oregon's contributions are expected to increase because under SIP'99, Intel will pay approximately $7.5 million more in taxes and fees each year while imposing few, if any, new service impacts on the County.
In summary, ECONorthwest concluded that Intel's operations are substantial and affect almost every sector of the County's economy.
Intel Oregon Powers Intel Advances
At the same time, Intel Oregon has powered much of Intel's technological advances.
The Teraflop Supercomputer* was designed and built by Intel engineers in Oregon using 9,200 Pentium® Pro processors. The first computer to achieve and sustain TFLOP (trillions of floating point operations) per second, it was the fastest computer in the world at the time. The system achieved its record-breaking run at Intel Oregon's Cornell Oaks Campus in Beaverton, then was packed and shipped to Sandia National Lab* in New Mexico.
A team of Intel engineers in Oregon designed the Pentium® Pro Processor. Launched in 1995, the core design became a key element of many future Pentium® II processors.
Intel's .35 micron process technology, a first in the semiconductor industry, was developed in Aloha at D1 (now Fab 15). Intel's .18 micron process technology was developed at the Ronler Acres Campus in D1B. The universal serial bus (USB) standard was driven initially out of Intel Architecture Labs in Oregon and broadened to include industry-wide participation.
At the Feb. 27, 2001, Intel Developer Forum, Intel Chief Executive Officer Craig Barrett outlined the four platform and silicon architectures that define Intel's role in the Internet economy.
"The Internet is the growth engine of the future," said Barrett. "While technology companies may be facing slower demand for certain products today, the worldwide build- out of the Internet will continue to drive increased productivity, new forms of communication and entirely new product categories well into the future. Now is the time to invest for that future." Intel Oregon is playing a part in that investment.
At the Ronler Acres Campus, Intel is investing heavily in new silicon technologies and manufacturing capacity that will enable the company to pursue future growth opportunities. In 2001, Intel will begin producing 300 millimeter wafers, introduce copper metallization, ramp 0.13 micron technology and deploy a host of other technologies that will allow Intel to help drive the next wave of innovation in the technology industry. Intel's objective is to take the leadership technologies and architectures the company has developed and use them to build innovative products for the future
Intel also is also moving aggressively into the consumer space with Intel-branded products emanating from Intel Oregon, many helping to bring the consumer into the era of the Extended PC.
One is the Intel® Web Tablet. Earlier this year, Intel announced key technical features of the Tablet, an Internet device that shares the home PC's Internet connection, processing power and printer to let consumers access the web from anywhere in the home.
At the July – August 2001 NW Natural* Street of Dreams*, presented by Intel and RE/MAX*, Intel is highlighting a host of its products that reinforce the Connected Home life style, Intel's vision for connecting families in the home, in the community and with loved ones around the world. A broadband connection with structured wiring standards for homebuilders and a computer are at the heart of this vision. The show is expected: to promote Intel architecture as the key to the extended PC in the home and stimulate consumer investments in residential technologies, including broadband and home networking.
Visitors to the 2001 Street of Dreams will have an opportunity to experience a variety of products originating in Oregon: Intel video cameras, Intel® Play™ toys, such as the Intel QX3™ Computer Microscope, designed at Intel's Smart Toy Lab in Portland, the Intel® Pocket Digital Audio Player, the Intel® Pocket PC Camera, and the Intel® Wireless Series, a family of wireless PC peripherals, including base station, game pad, mouse and keyboard.
As Intel prepares for the new century there will be even more excitement to come out of Intel Oregon. Stay tuned.
Bill MacKenzie is Communications Manager for Intel Oregon. He previously worked as a Business and Politics reporter for The Oregonian*, professional staff on a committee of the U.S. House of Representatives* and a Foreign Affairs Officer and Senior Policy Analyst with the U.S. Department of Commerce*.
1 "Stories of Change: Industry Clusters in the Metropolitan Portland Economy; Final Report of the Regional Connections Project, Institute of Portland Metropolitan Studies, College of Urban and Public Affairs, Portland State University, July 2000.
