A view of the Taiwan Semiconductor Manufacturing Company (TSMC) construction site on December 6, 2022 in Phoenix, Arizona.
Secretary of Commerce Gina Raimondo has been talking about semiconductors or chips in recent weeks with Arizona Senator Mark Kelly, the president of Arizona State University, and the mayor of Phoenix.
Passed in August 2022, the CHIPS Act is a financing package designed to increase domestic production of the core technology that serves as the brains of computers. As per a New York Times report, Raimondo is responsible for doling out $52 billion for semiconductor manufacture and research.
This bill is a cornerstone of President Biden's industrial strategy and a part of an effort to maintain US economic and technological superiority over China.
Preparing for Fund Distribution
Arizona wants to be ready for the Commerce Department's once-in-a-generation federal funding, which begins Thursday, Feb. 23.
The authorities have bombarded Raimondo to promote the state's expanding chip business and met with Intel and Taiwan Semiconductor Manufacturing Company (TSMC) CEOs.
Arizona, along with Texas, New York, and Ohio, is seeking subsidies and may have a leg up on the competition. Unlike Ohio, which has one big semiconductor manufacturing, Arizona has 115 chip-related enterprises.
Since 2020, Arizona has topped the country in semiconductor investments, with TSMC and Intel announcing two $60 billion chip-making sites in the state. Local politicians gave firms large tax benefits and water and infrastructure assistance to establish the facilities. They also vowed to enhance state technical and engineering education.
The Commerce Department will shortly provide semiconductor makers $39 billion in subsidies and let corporations, colleges, and others apply for $13.2 billion in research and workforce development expenditures. The CHIPS Act offers a 25% investment tax credit for manufacturers' capital expenditures.
Raimondo called it a race among states. She said that every governor, every state legislature, and every president of public institutions in every state must immediately put their plan of attack together. She knows it will be competitive.
Read Also: China-Korea Semiconductor Trade Ties Under Pressure Due to US Sanctions
Chip History in Arizona With TSMC and Intel
According to the New York Times, Motorola's Phoenix lab invented transistors in 1949, starting Arizona's chip manufacturing history. Intel developed a semiconductor factory in Chandler, a suburb southeast of Phoenix, in 1980 due to its inexpensive property taxes and closeness to Silicon Valley.
Ex-President Donald Trump promoted an "America First" approach throughout his presidency. It allowed former Arizona governor Doug Ducey and other state leaders to turn their economy into a tech hotspot.
In 2017, Arizona authorities met with TSMC executives in Taiwan. They touted Arizona State University's 30,000-student engineering school, cheap taxes, and business-friendly regulations.
TSMC announced a $12 billion Phoenix plant in May 2020. During that year, the city gave TSMC $200 million in water, sewage, and road infrastructure incentives.
Intel CEO Pat Gelsinger unveiled a broad plan to boost US chip manufacturing in early 2021.
The firm announced a $20 billion Chandler expansion with two new plants and 3,000 new employees. Chandler authorized $30 million for the facilities' water and road upgrades.
Read Also: China Might Impose Up to 400% Tax for Using Non-Chinese Chips
