City Approves Microchip's Tax Break, Fujitsu Accelerates Closing

GRESHAM, OR-All the chips are falling into place for the sale of a 200-acre semiconductor plant here that was idled by Fujitsu at the start of the year.

The Gresham City Council this week approved a $17.3 million tax break for Arizona-based Microchip Technology, which has agreed to pay $183.5 million for the property and installed chip-making equipment, and Fujitsu says it is exercising its option for an accelerated closing that would seal the deal later this month.

The property includes for 826,000-sf of buildings and 75 acres of land available for future development. In 2000, the plant received $350-million in upgrades to convert all production lines to flash memory, the memory used for cell phones and other handheld electronic devices.

Microchip has said it won’t purchase the plant if it doesn’t get the tax abatement. Gresham signed off on the deal Tuesday (Aug. 13), but approvals also are needed from the Multnomah County Board of Commissioners, which will vote on the matter Thursday (Aug. 15), and from the Oregon Economic and Community Development Commission’s finance committee, which is scheduled to vote on the matter Aug. 23, clearing the way for a closing by the end of the month.

Established in October 1988, the Gresham plant (21015 SE Stark St.) was Fujitsu’s first overseas wafer fabrication facility and one of its key production bases for memory products. After the April 2000 upgrade, the economic downturn forced Fujitsu to run the plant at well below capacity. Fujitsu last August tried to get AMD to buy a 50% share of the Gresham plant, but the deal fell through.

Fujitsu announced the plant’s closure and its ultimate sale in November 2001, saying it reflected “the continuing slump in the worldwide semiconductor market” that has forced the company to “reorganize its worldwide manufacturing structure to eliminate surplus flash memory capacity, a process that unfortunately requires the closing of the Gresham plant” and shifting operations to a manufacturing facility in Aizu-Wakamatsu, Japan, which it co-owns with AMD.

Knox & Co. of Westport, Conn., an investment banking affiliate of Bank of Tokyo – Mitsubishi Ltd., a trusted advisor to Fujitsu, selected Colliers International to market the property. Paul Breuer of Colliers was the Portland-area point man for the leasing team, which included Steve Rothrock and others from the company’s corporate property services division in Seattle.