For decades, Hillsboro’s semiconductor industry has powered Oregon’s tech economy. Now, a new state report warns that engine is starting to lose steam.

A state-commissioned assessment released Tuesday found semiconductor employment in the region has fallen to its lowest level in three decades, with researchers warning Oregon risks becoming “an insignificant stakeholder” in the global chip market without major changes.

The report, prepared by the University of Oregon’s Institute for Policy Research & Engagement for Business Oregon, points to five major challenges: heavy reliance on Intel, a shrinking workforce, rising costs, regulatory uncertainty and a shortage of industrial land.

Intel, Hillsboro’s largest employer, cut more than 6,000 Oregon jobs in 2024 and 2025 as the company scaled back. At the same time, data centers have taken up nearly 500 acres of industrial land in Hillsboro, limiting space for new chip manufacturers and suppliers.

“The challenge is not keeping companies here — it’s getting them to grow here,” researchers wrote.

The report recommends expanding the supply of industrial land, strengthening semiconductor workforce programs, and creating more support for smaller chip companies. It also calls for expanding partnerships with universities and tapping into the expertise of retired industry workers.

The findings come despite the Oregon CHIPS Act, a $500 million package approved in 2023 to boost the semiconductor sector. The report found the investment has not prevented recent job losses.

Some policy experts pushed back on the report’s focus on taxes, arguing Oregon’s tax system is not the main barrier facing manufacturers.

“The best thing Oregon can do for Oregonians and the semiconductor industry is invest in education,” said Daniel Hauser of the Oregon Center for Public Policy.

No timeline has been set for lawmakers to act on the recommendations.