---
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source_pdf: oregon-prosperity-council-report-june-2026.pdf
fingerprint: 8ac9aef8ca1b
page_range: [369, 371]
breadcrumb: ["Appendix E: Submissions & Feedback", "42. Oregon Semiconductor Industry Coalition"]
source_links:
  pdf: "https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=369"
  raw_pages:
    - "../../.extracted/pages/page-0369.txt"
    - "../../.extracted/pages/page-0370.txt"
    - "../../.extracted/pages/page-0371.txt"
---

# 42. Oregon Semiconductor Industry Coalition

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## TL;DR  *(generated · confidence: high)*

The Oregon Semiconductor Industry Coalition advocates for six policy priorities to restore competitiveness with leading semiconductor states: reform the Corporate Activity Tax, protect emissions-intensive manufacturing under the Climate Protection Program, streamline Cleaner Air Oregon permitting, address cost-of-living drivers, preserve and expand the Strategic Investment Program and incentives, and scale workforce training. Without modernization, semiconductor investment will migrate out of Oregon.

**Key points** *(each cites a PDF page)*:

- Oregon's competitive position eroding relative to Arizona, New Mexico, and Ohio due to higher tax burden, greater regulatory complexity, and affordability challenges ([p. 369](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=369))
- Corporate Activity Tax creates tax pyramiding that disproportionately impacts advanced manufacturing, uncommon among competitor states ([p. 369](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=369))
- Cleaner Air Oregon is among the most complex and costly air toxics systems in the nation, covering hundreds of compounds with cumulative risk modeling and no defined permitting timelines ([p. 370](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=370))
- Semiconductor industry has already invested decades in emissions abatement and operates at or near best-available technology limits with few remaining reduction pathways ([p. 370](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=370))
- Climate Protection Program imposes compliance costs without corresponding technical solutions for further reductions, creating cost asymmetry with non-regulated competitor states ([p. 370](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=370))
- Undefined permitting timelines under Cleaner Air Oregon create significant uncertainty and can delay or constrain R&D activities and manufacturing expansions ([p. 370](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=370))
- Cost-of-living pressures including housing, taxes, and energy costs undermine recruitment and retention of technicians and early-career professionals ([p. 370](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=370))
- Strategic Investment Program critical and must be preserved; competitor states offer broader monetizable incentive portfolios including R&D, capital investment, payroll, and infrastructure incentives ([p. 371](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=371))
- Fragmented credentialing, limited training capacity, and inconsistent pathways constrain workforce responsiveness relative to peer states ([p. 371](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=371))

Programs: Corporate Activity Tax · Climate Protection Program · Cleaner Air Oregon · Strategic Investment Program · Parties: Oregon Semiconductor Industry Coalition · DEQ

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> **Source:** PDF [pp. 369-371](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=369) · raw: [369](../../.extracted/pages/page-0369.txt) · [370](../../.extracted/pages/page-0370.txt) · [371](../../.extracted/pages/page-0371.txt)

Breadcrumb: Appendix E: Submissions & Feedback > 42. Oregon Semiconductor Industry Coalition

---
Strengthening Oregon’s Competitiveness in the U.S. Semiconductor
Industry
Oregon is a long‑standing hub of the U.S. semiconductor industry, supporting advanced
research, process development, and manufacturing that underpin national technology
leadership, economic resilience, and supply‑chain security. Historically, Oregon’s role
centered on high‑value R&D and early‑stage process development, supported by strong
institutions, skilled talent, and a stable investment environment.
The industry is now shifting toward integrated, U.S.‑based manufacturing and foundry
models that more tightly link R&D, pilot lines, and high‑volume production. Under this
model, activities once insulated from cost comparison are now evaluated directly across
states. Cost structure, regulatory certainty, workforce availability, and incentives
increasingly determine where companies place production steps, expansions, and capital
investment.
While Oregon retains clear strengths, its competitive position is eroding relative to leading
semiconductor states such as Arizona, New Mexico, and Ohio. Oregon now faces higher
overall tax burden, greater regulatory complexity with uncertain timelines, and growing
affordability challenges for the manufacturing workforce. Without targeted policy
modernization, these conditions increase the risk that future semiconductor investment,
expansion, and job growth will shift out of Oregon.
Priority 1: Restore Cost Competitiveness Through Corporate Activity Tax Reform
Semiconductor manufacturing is highly input‑intensive and capital‑heavy, with long,
multistage supply chains. Oregon’s Corporate Activity Tax (CAT)—a gross receipts tax
layered on top of the corporate income tax—creates tax pyramiding that compounds cost at
every stage of production. This structure disproportionately impacts advanced
manufacturing and is uncommon among competitor states.
As operations become more integrated across U.S. sites, CAT exposure increasingly
influences where production steps are located. Suppliers often pass CAT costs through to
Oregon‑based customers, further increasing operating costs. Absent reform, companies are
incentivized to move certain manufacturing activities out of Oregon to avoid recurring CAT
liability.
Recommendation: Modernize the Corporate Activity Tax by significantly lowering the rate
and/or creating exemptions or deductions for advanced manufacturing inputs to reduce tax
pyramiding and restore competitive parity.

Priority 2: Cost Protection for Emissions-Intensive, Trade-Exposed
Manufacturing under Greenhouse Gas Reduction regulations
Semiconductor fabrication relies on specialized process gases and chemistries that are
essential to manufacturing and often have no viable near‑term substitutes. The industry has
already invested decades in emissions abatement, chemical substitution where feasible, and
energy efficiency. Most advanced facilities now operate at or near the limits of
best‑available technology, with few remaining reduction pathways.
Oregon’s Climate Protection Program (CPP) risks imposing compliance costs without
corresponding technical solutions for further reductions. The CPP will act as another costly
tax on production when no viable options exist to reduce emissions. Because competing
semiconductor states do not impose similar requirements, this creates a cost asymmetry
that directly affects where manufacturing work is located within the U.S.
Recommendation: Whether Oregon continues under the current Climate Protection
Program or adopts a market‑based system, emissions‑intensive, trade‑exposed
semiconductor manufacturing must be protected through credit for early reductions,
cost‑protected or no‑cost compliance mechanisms for facilities using best‑available
technology, and exemptions for unavoidable process emissions where no feasible
alternatives exist.
Priority 3: Streamline and Clarify Air Toxics Permitting (Cleaner Air Oregon)
Semiconductor R&D and manufacturing require frequent process changes and new
chemistries. Oregon’s Cleaner Air Oregon program is among the most complex and costly
air toxics systems in the nation, covering hundreds of compounds and relying on cumulative
risk modeling without defined timelines. Moreover, DEQ continues to change implementing
rules creating significant uncertainty for manufacturers that are in the program or will need
an air permit in the future. Comparable states regulate air toxics with fewer chemicals,
clearer thresholds, and much shorter and predictable permitting timelines.
Undefined timelines create uncertainty for expansions and can delay or constrain R&D
activities. Chemical‑specific limits also restrict innovation by triggering additional modeling
and permitting for routine process changes. And constant changes to the regulations create
significant regulatory uncertainty.
Recommendation: Simplify Cleaner Air Oregon by establishing enforceable permitting
timelines and adopting a simplified process and framework that protect public health while
providing operational certainty and flexibility.
Priority 4: Affordability and Workforce Retention
Oregon has made progress in semiconductor workforce development, but cost‑of‑living
pressures undermine recruitment and retention of technicians and early‑career
professionals essential to fab operations. Housing costs, individual tax burdens, and high

energy and fuel prices increasingly place Oregon at a disadvantage relative to competitor
states.
Recommendation: Address affordability drivers—taxes, housing, energy, and fuel costs—to
stem talent leakage and sustain workforce competitiveness.
Priority 5: Incentives – Preserve and Modernize Oregon’s Competitive Toolkit
Semiconductor investments are among the most capital‑intensive in the global economy
and highly sensitive to upfront and ongoing costs. Oregon has benefited from significant
investment enabled by the Strategic Investment Program (SIP), which remains critical and
must be preserved. However, competitor states now offer broader incentive portfolios,
including monetizable incentives that directly reduce project costs and execution risk.
Recommendation: Protect the Strategic Investment Program and expand Oregon’s incentive
toolkit to include monetizable R&D, capital investment, payroll, and infrastructure
incentives comparable to leading semiconductor states.
Priority 6: Higher Education and Workforce Investment
Oregon has improved alignment between education and workforce systems and
semiconductor industry needs, but further growth requires greater scale and coordination.
Fragmented credentialing, limited training capacity, and inconsistent pathways constrain
workforce responsiveness relative to peer states.
Recommendation: Expand technician training capacity; increase cleanroom infrastructure
and high‑school‑to‑degree pathways; improve statewide coordination and credential
portability; and strengthen outcome‑based accountability aligned to semiconductor
workforce demand.
Conclusion
Semiconductor investment decisions are long‑term, capital‑intensive, and highly
competitive. Targeted modernization of tax policy, regulatory frameworks, incentives, and
workforce systems is essential for Oregon to retain and grow its role as a national
semiconductor leader—supporting innovation, supply‑chain resilience, and sustained
high‑wage employment.

---

Parent: [Appendix E: Submissions & Feedback](./INDEX.md) · PDF: [pp. 369-371](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=369)