My View: Arizona has become the place to bet on innovation
Call it the tipping point. Consider the stars are in alignment. Even label it a miracle.
Whatever you call it, there is no denying that members of the global technology community and their supporters have discovered that Arizona is the place to support innovation through investments that would have seemed just a dream a decade ago.
The most recent case in point is last week’s announcement that the U.S. Department of Commerce approved providing up to $6.6 billion in direct funding under the CHIPS and Science Act for TSMC’s semiconductor manufacturing campus underway in north Phoenix, as well as up to $5 billion in low-cost government loans for the project. In turn, TSMC announced plans to build a third fab at the site and expand its planned investment by $25 billion to $65 billion.
President Joe Biden already had stopped in Chandler earlier this year to announce Intel will receive up to $8.5 billion in grants and another $11 billion in loans to build semiconductor manufacturing facilities in Arizona and three other states. The funding also comes from the CHIPS and Science Act passed by Congress in 2022 to provide more than $52 billion for projects that will fuel the chip production trajectory in the nation.
But wait. There is definitely more than semiconductor manufacturing projects when it comes to taking Arizona’s technology ecosystem to a higher level:
LG Energy Solution is building its battery manufacturing complex in Queen Creek. The $5.5 billion facility is slated to be finished in two years, with the first hires expected by the end of 2024.
- Amkor Technology has announced a plan to build an advanced semiconductor packaging and test facility in Peoria. The company expects to invest $2 billion in the project and employ about 2,000 workers.
- American Battery Factory is constructing a 2 million-square-foot lithium iron phosphate battery cell gigafactory in Tucson, with the first phase ready by 2025. With a $1.2 billion capital investment for the facility, the project will provide an estimated 1,000 jobs and deliver a $3.1 billion economic impact as it helps speed the growth of America’s clean energy field.
- Buckeye is the site for KORE Power’s KOREPlex, which will produce batteries for transportation and energy storage sectors with a workforce of 1,250 and a $1.25 billion investment in the city. The first phase includes a 909,000-square-foot manufacturing hall, which will house operations for the production of lithium-ion cells and modules, while the second phase will have a manufacturing hall of the same size.
- Tucson-based Sion Power Corp. has gained $75 million in funding from investors including LG Energy Solution. Sion’s plan for the money is to validate its Licerion technology that uses compression in a lithium-metal battery to boost safety, lifetime and recharging rates.
There also are companies with established Arizona ties that have been in the news recently through investments of their own:
- Semiconductor manufacturer ASM, a Dutch company, has announced a $320 million plan to move its North American headquarters to north Scottsdale in 2026. ASM first opened its Arizona doors five decades earlier in Phoenix.
- Lucid Group’s expansion of its advanced manufacturing plant in Casa Grande will enable it to improve manufacturing capabilities for production of the company’s new fully electric SUV, the Lucid Gravity, as well as support future growth. The expansion features a new 3-million-square-foot manufacturing facility and warehouse.
- And Nikola Corporation marked the commercial launch of its hydrogen fuel cell electric vehicle at its manufacturing facility south of Phoenix in Coolidge. The electric truck has a range of up to 500 miles and an estimated fueling time as low as 20 minutes.
But none of this activity happened overnight. It took years to create just the right business climate, thanks to the leadership of many organizations and individuals.
Certainly, the Arizona Technology Council has played a role through its partnerships to develop a skilled workforce, which means much of the talent needed by the companies I have listed can be homegrown. Add to that our public policy activities that have helped encourage Arizona governors, legislators and mayors to play active roles in creating a welcoming environment for these projects.
The foundation for success also has come from efforts of other entities. Included in this mix have been Arizona Commerce Authority, Greater Phoenix Economic Council and City of Phoenix, among others.
And the results speak for themselves. What we’re experiencing is a miracle in the desert.
Steve Zylstra is president and CEO of the Arizona Technology Council.