Carolina Journal News Reports
RALEIGH – Gov. Mike Easley said June 24 that Greensboro-based RF Micro Devices is the most recent beneficiary of the state’s One North Carolina Fund economic incentive.
Easley’s statement in a press release didn’t mention that the circuit maker received incentives, but the Department of Commerce confirmed the company will receive $500,000 from the governor’s discretionary fund. In addition, Guilford County and Greensboro offered the company more than $650,000 in tax reimbursement incentives. The funds were offered based on RF Micro’s plans to create 50 new jobs because it wants to make larger wafers that hold thousands more microchips.
“We’re excited to expand our manufacturing operations, and we’re very appreciative for the support from city, county, and state representatives that enabled us to create these local additional jobs,” said Jerry Neal, RF Micro’s vice president of marketing and strategic development. “This support was particularly important in driving our decision to expand right here in Greensboro.”
The Associated Press reported that “keeping the expansion project local also fits in with company cofounder Neal’s plans,” because he was born in High Point and lives on a farm his great-grandfather owned.
“It’s a privilege to be able to stay home, particularly in this business,” Neal said.
The News & Record of Greensboro reported that the company “threatened that it might take the jobs to China without local tax breaks.” RF Micro opened a “test, tape, and reel” facility in Beijing in September. The plant, where components made in Greensboro reach their final stage of assembly, is the only manufacturing facility the company has in China. The company was invited by wireless phone maker Nokia to become one of its suppliers in China.
RF Micro manufactures its products at two plants in Greensboro. Vice President and Corporate Treasurer Suzanne Rudy said incentives were one of several important considerations that factored into the company's decision. “We had other options,” she said. “We could have easily done this in China and we considered outsourcing.”
Rudy said China also offered incentives, but she declined to say how much. She said that labor would have been cheaper in Beijing and that overseas production presented an opportunity to split RF Micro’s manufacturing base. Multiple locations allow a company to continue work in case a disaster strikes a plant.
The company will spend $40 million renovating space and purchasing equipment that will enable it to produce the larger wafers. The upgrades will lower RF Micro’s manufacturing costs by 30 percent, Rudy said. For the last fiscal year the company had revenues of $508 million.
Given that China also offered incentives, it remains unclear whether the North Carolina enticements made a difference in RF Micro’s decision.
“When you look at the amount of the onetime incentives related to their costs over many years,” said North Carolina State University economist Michael Walden, “this is a very tiny amount.”
RF Micro began in Greensboro 12 years ago and now employs about 1,400 in the area. The News & Record said the company received $4.5 million in local tax breaks in 1999 to offset capital expenditures.