Oregon Office of Economic Analysis

Included in the recent federal legislation was a big incentive program to increase domestic semiconductor manufacturing. In recent years there have been a handful of large, semiconductor announcements in states like Arizona, New York, Ohio, Texas and the like. To date none of the big announcements have been in Oregon, although that is set to change in the near future by all accounts. Our office is now building in some realistic placeholder assumptions about the growth in Oregon’s high-tech sector in the years ahead.

To date, the State of Oregon has received more than a dozen applications for newly passed state incentives that should result in tens of billions of dollars of investment, and associated construction activity. There will also be local semiconductor job gains as well. The details of these projects are not public. However the combination of the federal and state programs, and momentum behind onshoring given the chip shortages during the pandemic, the increasing likelihood of sizable projects in the state is too big to ignore from a forecasting perspective.

Specifically the forecast now includes an increase of about 3,000 additional Computer and Electronic Product manufacturing jobs over the next five years, in addition to just over 1,000 construction jobs that phase in and out over the same time period. The actual construction impact is expected to be larger than that, but some of the labor will likely shift from other projects in the region, resulting in a smaller net increase in total construction jobs. For now these forecast changes are more of placeholder values. As our office learns more about the potential projects, and ultimately which ones do or do not get built, we will adjust the forecast accordingly.

Our March 2022 forecast discusses the high-tech manufacturing outlook in more detail, but a few aspects are worth noting. First, the industry is a pillar of Oregon’s economy. Its importance is hard to overstate. Second, industry employment held relatively steady (or down) for much of recent decades. Third, given the chip shortage and increased demand during the pandemic, local job gains increased by more than 3,000 jobs even without any of the major announcements seen elsewhere in the nation. This increase is the equivalent of adding one or one and a half new fabs. Fourth, the Oregon semiconductor workforce is significantly different than elsewhere in the country.

Oregon is 1.2 percent of all jobs nationwide. Oregon is 9 percent of the nation’s semiconductor jobs (NAICS 3344). Oregon is 17 percent of the nation’s engineering type jobs within the semiconductor industry. This means 55 percent of the workers in Oregon’s semiconductor industry today work in Computer and Math, and Architecture and Engineering occupations. The national figure is 29 percent, as is it among the Top 10 states with the largest semiconductor workforces. Those states from largest to tenth largest are California, Texas, Oregon, Arizona, New York, Florida, Massachusetts, Michigan, Illinois, and Minnesota. Only Arizona at 43 percent engineering jobs is somewhat similar to Oregon’s occupational structure.

What this means is Oregon is a key location within the nation for the research and design of semiconductors. Now, Oregon is still an integral location for the actual manufacturing of semiconductors as well, with about 7,000 production jobs which ranks 4^th highest nationally, but as a share of the overall industry, Oregon’s production jobs account for 21 percent compared to 40 percent nationally, and among the other large states. It is our high concentration of engineering jobs, and what that means for the overall industry, that makes Oregon standout compared to other states.

Growth in semiconductors is likely to increase overall productivity in the economy because the sector is, well, highly productive. Looking at the average value-added per employee from state GDP data, Computer and Electronic Products are three times as productive as the average worker in the economy. And Oregon Computer and Electronic Product workers are 20-30 percent more productive than the average such worker nationwide. As such, local growth in the industry is expected to help boost economywide statistics in the years ahead.