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Arizona allocates $100 million to boost semiconductor industry in state

Phoenix Business Journal

The state of Arizona announced on Friday that it plans to invest $100 million to support the growth of the state’s semiconductor industry.

The $100 million investment will go towards building a public-private partnership focused on building out Arizona’s infrastructure, workforce and research and development for semiconductors, the state said.

“Arizona has earned a place as one of the world’s leading destinations for chip design, manufacturing and innovation,” Gov. Doug Ducey said in a statement. “This funding ensures we make the most of this moment and cement our semiconductor leadership for decades to come.”

The funds will be managed by the state’s economic development agency, the Arizona Commerce Authority, and be used to help accelerate development, commercialization and manufacturing of U.S. semiconductor technologies while identifying research infrastructure and workforce needs, the state said.

It’s also hopeful that the investment will increase its chances for funding and research and development opportunities through the recently passed CHIPS and Science Act.

Additional details about where the funds are allocated from and how it will be distributed were not immediately available. The ACA said the governor’s office allocated $100 million from federal funding awarded to the state of Arizona, adding that discussions with industry are taking place to determine priority areas of focus for applied research, workforce development and shared facilities.

“Timelines for disbursing funds will take into consideration these industry priorities as well as competitive opportunities under the CHIPS Act. We will provide additional information as details are finalized,” the ACA said in an email.

The CHIPS and Science Act, which became law on Aug. 9, includes $52 billion to boost the domestic semiconductor industry, and several Arizona organizations will soon submit applications to get a piece of the funding. The National Institute of Standards and Technology is expected to start dispensing money from the program early next year.

The Valley is one of America’s semiconductor production hubs and is almost guaranteed to benefit from the new funding. Intel, the country’s largest chipmaker, set up shop in Chandler in 1980 and will soon open two new factories, or fabs. Semiconductor companies Onsemi and Microchip also call the Valley home, and Taiwan Semiconductor Manufacturing Co. will soon open its first-ever American-built fab in Phoenix.

The modern semiconductor industry started in the United States, specifically in California’s Silicon Valley with the birth of Intel in 1968. In the decades since, America has lost the edge in leading both chip design and manufacturing; Today the greatest quantity and most complex chips come from Asia. The CHIPS Act was designed to regain some of America’s lost semiconductor supremacy.

In August, Ducey was also one of several government officials who visited Taiwan and South Korea to help boost semiconductor manufacturing operations in Arizona and the U.S. amid ongoing tensions with China.

News of the state’s investment into semiconductor also comes as it continues to compete for federal funding and for the influx of suppliers looking for sites to build new facilities in states like Arizona. Already, dozens of suppliers have made plans to operate in the Phoenix region and Pinal County.

Former Phoenix Business Journal reporter Andy Blye contributed to this report.


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