An idle semiconductor factory in Eugene got a new owner Thursday who plans to restart production, a remarkable turnaround after seven years in which it seemed the shuttered site might be destined for oblivion.

Singapore-based Avago Technologies revealed that it's the mystery buyer who paid $21 million for Hynix's old chip factory, empty since 2008.

"The Eugene site is an attractive option for expansion," Avago vice president Stan Strathman said in a written statement. "The Hynix facility is well suited to our manufacturing needs, while the Eugene location provides access to a strong labor base and an established infrastructure supporting high-tech manufacturing."

The company said it plans to make components for mobile phones in the 1.2-million-square-foot factory, which has been vacant since Hynix shut it down, eliminating 1,400 jobs amid a historic downturn in the memory chip market.

Avago said it plans to hire engineers, technicians and factory operators, along with administrative and management jobs. The company gave no indication just how many people it will employ, but Mayor Kitty Piercy said she's hearing Avago plans to start with 250 to 300 employees once production gets under way.

First, though, Avago plans a major retrofit of the 17-year-old facility. The company said it will begin design work on the Hynix site next year and begin construction in 2017.

"It's going to be a sizable investment in our economy," Piercy said. "I've heard it's going to take them up to two years before they're ready to produce. But in the meantime there are going to be lots of jobs getting it ready."

At times it seemed the aging factory might never reopen as Eugene and Hynix struggled to find a buyer. It went up for auction last month, but the buyer remained anonymous until Thursday. David Hauser, president of the Eugene Area Chamber of Commerce, said Avago stands to have the greatest economic impact of all possible options for the site.

"This by far the most compelling opportunity for Eugene-Springfield and Oregon," he said.

Word that the property will return to high-tech manufacturing after seven years represents an enormous and unexpected turnaround for Eugene, which was hit especially hard by the Great Recession.

"High-tech manufacturing in this area has been very slow to come back," said Brian Rooney, Oregon's regional economist for Douglas and Lane counties. "It was a pleasant surprise that somebody would come in and actually start producing some high-tech products."

Lane County's manufacturing sector has only regained 18 percent of the jobs it lost in the Great Recession, according to Rooney. Other job categories have recovered 80 percent of the jobs they lost.

So Avago's arrival figures to have a particularly strong impact.

"These are largely high-skilled, high-wage jobs to a manufacturing industry that's been lagging in this area," Rooney said.

Hynix's facility is in an enterprise zone, which exempts it from local property taxes on its equipment. Similar deals have saved other tech industries millions of dollars annually.

Business Oregon, the state's economic development agency, said it is having "ongoing" discussions with Avago, Eugene and the local chamber of commerce regarding additional incentives.

Avago traces its roots to Hewlett-Packard Co. and had manufacturing operations in Corvallis before its split from HP. The company makes communications chips used in fiber optics and wireless communications. It's a top competitor to Qorvo, which has a factory and corporate offices in Hillsboro.

Avago had 8,400 employees worldwide at the end of last year, and 2014 revenue of $4.3 billion. In May it agreed to pay $37 billion to buy Broadcom Corp. -- the biggest takeover in the history of the semiconductor industry. The deal will make Avago the world's sixth-largest chipmaker.

The Eugene site will be an extension of Avago's factory in Fort Collins, Colorado, according to Hauser. The company employs about 800 there.

Eugene had watched for years as various plans to occupy the Hynix site fell through, among them a solar manufacturer and data center.

Now, Hauser said, Avago's plans to fire up production appear better than anything else prospective buyers had contemplated.

"Based on what we know, it sure seems like a great fit," he said.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved