Semiconductor purgatory


roundup-logo-thumb-14BY LINDA BAKER | OB EDITOR

Intel’s manufacturing way station; Merkley’s attack dog; Diamond Foods gets into the innovation business.

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roundup-logo-thumb-14BY LINDA BAKER | OB EDITOR

Intel’s manufacturing way station; Merkley’s attack dog; Diamond Foods gets into the innovation business.

Ever wonder what happens to Intel’s outdated semiconductor manufacturing equipment? 

We did, especially since Intel’s recent tax deal allows the company to invest up to $100 billion over the next 30 years in new manufacturing equipment, most of it at a reduced property tax rate.

Intel gets tax breaks on new equipment because so much of the value of its new facilities is tied to that equipment. Up to half the cost of a new fabrication facility is reportedly in manufacturing tools — and not the physical structure in which the new tools are housed.

So what happens to the old tools?

 “The nature of our business is to constantly upgrade our manufacturing process and an important part of that is try and do as much equipment reuse as possible,” Intel spokesperson Chelsea Hossaini told me.  The equipment for manufacturing is sometimes upgraded and sometimes resold, she said.

Hossaini pointed me to the Intel Resale Corporation, a subsidiary of Intel charged with selling the company’s “excess assets,” as well as a recent donation to the Department of Electrical and Computer Engineering at the University of Illinois.

She declined to discuss pricing or make an IRS director available for an interview. A fruitful subject for further inquiry.

In other Intel news: While reading the Sunday New York Times yesterday, I glimpsed an ad for the Times’ upcoming International Luxury Conference, featuring Intel CEO Brian Krzanich as one of the speakers.  Krzanich appears to be the outlier in a conference lineup that includes the CEOs of Neiman Marcus, Four Seasons Hotel and Resorts and fashion icon Diane von Furstenberg. 

Not sure who gains more prestige from the association: Intel for being linked to a luxury brand conference, or luxury brands for hosting an intellectual heavyweight like Intel.  Either way, the conference is more evidence that the tentacles of tech are penetrating everywhere — and that geeks are indisputably part of the cool crowd now.

In last week’s column, I wondered why Sen. Jeff Merkley’s communications staff continued to attack Monica Wehby so relentlessly, since the Republican contender is doing such a great job trashing her own campaign. This weekend, the Oregonian ran a similar story about Merkley deputy campaign manager Andrew Zucker.

Reporter Jeff Mapes describes Zucker thus:  “A champion of the biting commentary … Zucker is almost a constant presence on Twitter, delivering real-time commentary on the race that often sounds like what you’d hear at a trash-talking pick-up game of hoops.”

This morning, I spoke with Holly Mensch, vice president of research at Diamond Foods, about the company’s new 7,000- square foot “Innovation Center,” which breaks ground this week in Salem.

These days, of course, everyone is hiring an innovation team. Asked what distinguished the new center from the company’s previous product development initiatives, Mensch said Diamond hopes to leverage the creativity associated with its Kettle Chips brand — ready-to-eat popcorn, spicy Thai potato chips anyone? — across all divisions: Emerald, Pop Secret, and Diamond of California.

“By having a dedicated innovation team, we can provide more support and synergies across all the businesses,” Mensch said.

Based in San Francisco, Diamond selected Salem as the location for the new center because of the area’s agriculture and food processing base and proximity to Portland, a food trend mecca, Mensch said.

The center should also boost the state’s fledgling efforts to seed a food cluster, an initiative we reported on here.

Linda Baker is the editor of Oregon Business.