To: rkral who wrote (181016 ) 5/9/2005 8:28:07 AM From: Proud_Infidel Respond to of 186894 Arizona mulls measure to lure Intel fabs EE Times (05/06/2005 8:24 PM EDT) SAN JOSE, Calif. — The Arizona Legislature has approved a $8.2 billion budget package — a move that could pave the way for Intel Corp.'s $4 billion fab expansion plan in the state, according to The Business Journal of Phoenix on Friday (May 6). The budget, approved on Thursday (May 5), includes funding for a downtown medical school in Phoenix and tax cuts for businesses. Still to be seen, however, is whether Arizona Governor Janet Napolitano will sign or veto the tax measure, which is said to benefit semiconductor companies in the state, according to the report. Businesses are pushing Napolitano to sign the bill, paving the way for the so-called "sales factor" tax measure. Top Democrats oppose the measure, according to the report. "Intel is considering its Chandler campus for a $4 billion expansion," according to the report. "Whether Intel opts to expand in Chandler, Oregon and offshore location could hinge on Napoltano's approval of the 'sales factor' tax bill, and that puts some pressure on the governor." Intel CEO Craig Barrett recently said that current legislation "demotivates" Intel from making further investments in the state of Arizona. Still, Intel filed an updated preliminary development plan with Chandler city authorities on Feb. 18, that if approved, would allow Intel to upgrade its existing building and build up to "three computer chip plants" in the region (see March 1 story). The U.S. needs a coordinated strategy to reduce the cost differential created by foreign government tax and incentive policies in order to keep chip manufacturing in the domestic market, according to the top executive at the Semiconductor Industry Association (SIA). SIA President George Scalise recently said that lower tax rates and incentives that reduce the cost of capital in other countries -- and not lower labor rates -- are the principal reasons why most new wafer fabs currently being built are outside the U.S.