Hynix.JPG

The project would have brought at least 229 new jobs to the facility, plus 700 short-term construction jobs.

(The Associated Press/file photo)

Chipmaker Broadcom won't reopen the former Hynix computer chip factory in Eugene after all, abandoning plans for a $400 million retrofit that would have brought at least 229 new jobs to the facility, plus 700 short-term construction jobs.

"Broadcom has decided to sell an unused (manufacturing) site in Eugene, Ore., that it no longer plans to deploy in its wireless semiconductor business," Broadcom spokeswoman JP Clark said in a statement to The Register-Guard newspaper, which first reported the news. Broadcom did not immediately respond to a request for additional comment.

Broadcom, which makes communications chips, did not indicate why its plans have changed. On Wednesday, though, it announced it will pay $5.5 billion to buy Brocade Communications Systems, a networking chip company.

At the same time, the market for communications chips is slowing as the smartphone market matures.

Broadcom's reversal represents a major economic setback for Eugene and Lane County, where Hynix had once been a major employer. Broadcom's decision last year to buy and revive the plant had been a surprising piece of good news for the region.

Hynix spent $1.5 billion to build the 1.2-million-square-foot factory, which opened in 1998. It had 1,400 employees and contractors when it shut down in 2008.

The 100-acre property sat fallow for seven years before chipmaker Avago paid $21 million for it last year. Avago changed its name after acquiring Broadcom.

Broadcom won $21 million in local property tax exemptions to help finance the overhaul of the 18-year-old facility, promising to pay its workers 150 percent of the average local wage - nearly $60,000 a year. Those tax incentives don't have any value if the project doesn't go ahead, since there will be no new equipment or facilities to apply them to.

The incentives might help attract another manufacturer, though options for rehabilitating the aging facility decline every year it sits fallow. Given that it sat empty for seven years before Broadcom took an interest, it's not obvious why another buyer would suddenly have interest now.

"We were looking forward to wellpaying jobs for a lot of people," Eugene Mayor Kitty Piercy told The Register-Guard on Tuesday, lamenting Broadcom's decision. "That's very discouraging, and I look forward to finding out why it occurred."

-- Mike Rogoway

mrogoway@oregonian.com

503-294-7699

@rogoway