Camas says it could land WaferTech expansion

Camas Mayor Scott Higgins sees his city as a major contender in the much-talked-about race to land an expansion of chipmaker WaferTech’s Taiwan-based parent.

“We’ve been the (company’s) only semiconductor fab in the U.S.,” Higgins said in response to a news article speculating about the project.

o Reduced business and occupation tax rate to .275 percent from .484

o Exempts gases and chemicals used in manufacturing from sales and use taxes

o Exempts labor and services related to construction from sales and uses taxes

o Business and occupation tax credit of $3,000 per worker

o Machinery exempted from personal property taxes

Source: http://apps.leg.wa.gov

The director of Oregon’s state economic development agency, Business Oregon, last week referred to the race to land the project while standing before an Oregon legislative committee as being between Oregon and New York, according to The Oregonian.

Called “Project Azalea,” the expansion is rumored to be a multibillion-dollar chip foundry. In order to land the highly sought-after prize in upstate New York, that state’s officials are sweetening the deal with millions of dollars worth of incentives, putting Oregon at a disadvantage, said Tim McCabe, director of Business Oregon.

Camas, on the other hand, doesn’t have to throw money at the project because the city already has several advantages over sites being considered in Oregon and New York, said Paul Dennis, president of the nonprofit Camas-Washougal Economic Development Association.

For one thing, WaferTech’s parent, Taiwan Semiconductor Manufacturing Corporation, already operates a Camas facility at 5509 N.W. Parker St. TSMC owns the Camas facility’s 1-million-square-foot complex and sits on a 260-acre site that’s been approved for two additional building phases.

“You’ve got to factor in all the local incentives,” said Dennis, the former mayor of Camas. “They (TSMC) own enough land to build more fabs and they purchased the land with that intention.”

Others say state legislative incentives have been in place for WaferTech since 2003. Senate Bill 5725 and its companion, House Bill 1751, both provide tax incentives to support the state’s semiconductor cluster, said Bonnie Moore, director of business growth at the Columbia River Economic Development Council.

Prior to the bill’s passage

in 2003, WaferTech executives told lawmakers that the company will build a $3.5 billion plant somewhere in the world and that tax cuts would increase the chance it would build in Camas.

Legislators responded by passing unprecedented tax exemptions, including a reduced business and occupation tax rate to .275 percent from .484, exempting gases and chemicals used in manufacturing from sales and use taxes, exempting labor and services related to construction from sales and uses taxes, a business and occupation tax credit of $3,000 per worker, and exempting machinery from personal property taxes. No semiconductor plants have been built in the state since the legislation passed.

The tax cuts wouldn’t take effect until a semiconductor company, presumably WaferTech, commits to investing at least $1 billion in a plant. It is unclear whether any companies have so far taken advantage of the law.

Moore said the legislation, which would significantly reduce equipment and construction costs, illustrates Washington state’s long-term approach to economic development.

“We tend to focus on companies that make sense here for the long term,” Moore said. “It’s not necessarily the most up-front capital development costs.”

WaferTech constructed its $1.2 billion Camas computer chip plant along Southeast First Street in 1997.

Dennis estimated the “multibillion” dollar project could cost anywhere from $4 billion to $6 billion. Others have said the project would generate at least 1,000 more jobs manufacturing the industry’s next-generation wafer, the 450 millimeter.

WaferTech’s current facility fabricates the 200-millimeter technology.

Higgins would not comment when asked whether Camas officials have met with TSMC to discuss the company’s plans. He expects TSMC to make a decision soon about its site plans.

“Bottom line, we know there’s a global competition and we feel good about our position as a part of it,” he said.