How Taiwan Semiconductor's New Factory Will Transform The City's North Side

How Taiwan Semiconductor's New Factory Will Transform The City's North Side

Original Article Posted On Phoenix Business Journal On May 28, 2021

Phoenix is on the cusp of an unprecedented direct foreign investment infusion with the construction of a massive semiconductor manufacturing facility on the north side of the city. This investment, which could be close to $35 billion, will have an even bigger ripple effect on the Valley's economy.

“I was just talking with a company from Europe, trying to recruit them to come to Phoenix, and they said, ‘To land the state’s biggest foreign direct investment in the state’s history, in the middle of a pandemic, you should be able to handle us,’" Phoenix Mayor Kate Gallego said.

That investment comes in the form of Taiwan Semiconductor Manufacturing Co. Ltd.’s forthcoming fabrication facility, which will be built on 1,128 acres of land the company bought last December. So far, the Taiwan-based company has confirmed it plans to spend $12 billion developing the first phase of the facility, but has remained mostly tight lipped about its plans. Sources familiar with the deal have said the total investment, which will eventually include building five or six chipmaking fabs, will be closer to three times as much.

While the project itself is record-setting, the reverberations that will occur in the state’s economy could be just as strong, economic development experts said.

“I worked in economic development before running for city council,” Gallego said. “In my career, I’ve never seen a deal that had so many benefits.”

Jobs, jobs, jobs

TSMC plans to hire about 2,000 people to work in the first phase of the plant, which by 2024 is expected to produce 5 nanometer computer chips for other companies including Apple Inc. and Intel Corp. The majority of TSMC’s fabs are in Taiwan, with additional production in China. Since the Arizona fab will be the first facility that TSMC builds in the states, 100 of the 250 already hired have moved to Taiwan to train for a year.

For each semiconductor manufacturing job created in Phoenix, an additional four to five jobs are created to support the first one. While jobs in every industry have a multiplier, from manufacturing positions to restaurant workers, economic development experts said semiconductor manufacturing jobs have one of the highest multipliers of any job.

This means that if TSMC hires 2,000, an additional 10,000 jobs could be created to support the new employment, ranging from advanced manufacturing positions to grocery workers needed to accommodate an increase in demand in the areas near the factory or elsewhere.