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EUGENE, OR-Hynix Semiconductor says it will idle its Southern Oregon chip-making plant for six months due to a weak semiconductor market. The shutdown begins today and affects some 600 workers. Another 200 workers will remain at work, handling administrative duties, and the company says it hopes to rehire all laid-off workers by the end of the year.

Last week, one month after being denied a two-year extension of a three-year property tax waiver related to the $1.4 billion cost of constructing its west Eugene plant, Hynix requested a three-year property tax waiver for $156 million in equipment upgrades it wants to make en route to producing next-generation chips there by the end of the year.

The request is being made under the west Eugene enterprise zone program. It was created by the City and Lane County in 1987 and closed to new participants in 1997, but those who got in can continue locking in property tax benefits until 2007.

Hynix is asking for the benefit without meeting one of the heretofore always met requirements: the investment must be accompanied by an increase in employment of 10%, in this case about 90 jobs. On the other hand, state rules, say cities and counties may waive that requirement if more than $25 million is being spent.

It was the city and the county that signed off on the original break and denied the extension last month, and it will be they that will decide this latest request. The city hopes to schedule the discussion before the council disbands for summer break in early August. The county commissioners would address it after that.

Hynix officials could not be reached for comment. Jim Gangle, Lane County assessor, tells GlobeSt.com budget issues played into the denial of last month’s extension request and are still an issue. He also acknowledged “concern” about what another denial would mean to the future of the plant and its 900 employees. “That’s a lot of spin-off,” says Gangle.

Denny Braudin, Eugene’s enterprise zone manager, said given only Hynix’s track record, the city would have approved the request, but it was that or a cutback in public services. “(Hynix has) done a great job, everything and more than they said they would do,” says Braudin. As for the new request, Braudin says it would be unprecedented, and maybe worth it. “We’ve never done that before, but it might be reasonable opportunity for the council and commissioners to do that, kind of as a job retention strategy.”

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