High-tech sector holds its own

Manufacturers weather tough global economy

By Gordon Oliver, Columbian business editor

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Clark County’s technology sector is holding its own, and that’s good news for an industry buffeted by forces as diverse as the European debt crisis, last year’s natural disasters in Japan, and local energy costs.Clark County holds about 3,000 jobs in computer and electronic manufacturing, an increase of about 200 jobs from 2009, the state Employment Security Department reports. (The county has about 18,500 manufacturing jobs).Employment Security projects only modest increases in technology manufacturing, to an estimated 3,400 jobs in 2014 and 4,100 jobs in 2019. That level of growth would hardly return Clark County’s tech manufacturing sector to its glory days: At its peak in 1997, technology manufacturing employed some 5,400 workers in Clark County, said regional economist Scott Bailey.

Still, there are some promising signs of growth. Vancouver’s own nLight grew in 2011, securing $17.5 million of private capital to expand local manufacturing and add jobs. With $110 million of private investment in its 11-year history, the semiconductor laser manufacturer is one of the county’s brightest stars as it moves closer to an initial public offering. With the addition of 100 employees last year, its workforce stands at more than 300 in Vancouver and Hillsboro, Ore., with another 150 overseas. The company projected some $70 million in sales in 2011.

WaferTech last year completed a $1.6 million energy efficiency upgrade at its Camas chip manufacturing plant, financed in large part by public funds and utility fees. With about 1,000 employees, the company is Clark County’s seventh-largest employer and the only technology company to make the top 10 employment list. The Taiwan-based company has plenty of room for expansion but has no current plans to grow in Clark County.

And the ever-secretive Hewlett-Packard showed its commitment to its Vancouver printing division, much reduced from its peak before the company shipped manufacturing overseas, by relocating to east Vancouver’s Tech Center. HP does not disclose its local employment numbers.

In 2009 HP sold its 174-acre campus, with four buildings and 694,000 square feet of space, to SEH for $55 million. The company, a division of the Japanese firm Shin-Etsu Handotai Ltd., has not revealed any plans for the property.

In one small gain for Clark County, Sharp Solar relocated to Camas from Southern California, starting with about two dozen employees and plans for adding more early this year. The vast Sharp corporate spider web is firmly entrenched in the county, with Sharp Laboratories of America and Sharp Microelectronics of the Americas also based here.

Sharp was among the Japan-based companies affected by disruptions in the manufacturing supply line in the aftermath of the March 11 earthquake and subsequent tsunami in Japan.

Other Asia-based companies with Clark County operations, including SEH and Wacom, had to make adjustments as their parent companies coped with troubles in manufacturing in the region affected by the twin natural disasters. But by year’s end, it was apparent that advance planning and redundancies in supply systems had paid off in restoring normalcy to production. Worldwide semiconductor sales quickly returned to pre-disaster levels, thanks to strong demand for automotive electronics, smartphones, tablets and reading devices.

Seeking efficiencies

Still, there are few signs that growth in demand will be strong enough in the short term to give a big boost to the local economy.

Linear Technology, a chip manufacturer based in California’s Silicon Valley with 290 employees at its chip fabrication plant in Camas, in 2010 floated the idea of a second fab in Camas. But that idea is now off the table. The company is “not anticipating further expansion in the near term,” said John Hamburger, the company’s director of marketing and communications, by email. “However, we are committed to the Camas area and are waiting for the timing to be right for further capacity expansion.”

Many in the semiconductor industry are saying full recovery won’t come until the next technological breakthrough of smaller, faster, and cheaper chips. And the cutting edge of that breakthrough could happen across the Columbia River at the Intel campus in Hillsboro, Ore.

Intel and other manufacturers want to move from the current dinner-plate-size 300-millimeter wafers, to larger, more efficient 450-millimeter wafers. Some estimates suggest that could shave nearly a third off the cost of each chip. Major manufacturers including Intel and TMSC, parent of WaferTech, have formed a global consortium to speed research and development of the 450-millimeter wafers.

Intel is spending $3 billion to build its new research fab, D1X, in Hillsboro. The Silicon Valley-based company has said that D1X will be able to accommodate larger silicon wafers. Construction will be completed this year, and the fab will be operating in 2013.

Amid global uncertainty, Clark County technology manufacturers remain concerned about a distinctly local issue: Initiative 937, approved by Washington voters to stimulate increased use of renewable energy. The Clark County High Tech and Community Council, representing some of the county’s largest technology employers, would like the Legislature to modify some of the renewable energy requirements and to give utilities more credit for conserving power.

Rob Bernardi, president and chief executive officer of Kokusai Semiconductor Equipment Corp. in Vancouver, said in a January 2011 article in The Columbian that local tech manufacturers don’t want to undermine I-937 but rather want to eliminate “unproductive costs” related to the measure.

“Cheap and predictable energy has always been our region’s trump card in attracting and retaining companies that manufacture and none do so more efficiently than our local high-tech companies,” said Bernardi, who acknowledged that the chances of the Legislature taking action this year appear slim.