close
close
awsum

Arizona’s semiconductor gains could slow with Trump’s election victory.

Neon
Arizona’s semiconductor gains could slow with Trump’s election victory.

Donald Trump criticized CHIPS and the Science Act, which aims to revitalize semiconductor manufacturing in the United States. If this effort is stalled, Arizona may feel the pinch more than most states.

play

Few states have benefited more from the passage of CHIPS and the Science Act than Arizona, but progress in expanding this important industry could slow if President-elect Trump acts on his recent criticism of the law.

The CHIPS Act aims to revitalize America’s role in the production of complex electrical components that power cell phones, computers, home appliances, medical devices and much more.

The law, which takes effect in 2022, was a signature achievement of the Biden Administration; president Biden has visited Arizona twice in recent years. Celebrate Intel Corp.’s expansion in Chandler and a Taiwan Semiconductor Manufacturing Co. in North Phoenix. Huge new complex by.

But Trump criticized the law in late October.

“This chip deal is terrible,” he said on Joe Rogan’s podcast. “We put billions of dollars in for rich companies to come in, borrow money and start chip companies here.”

Instead of expanding federal CHIPS Act funding to manufacturers, he proposed adding tariffs to imported semiconductors. He predicted this would encourage foreign manufacturers to set up factories here to bypass those taxes, drawing parallels with the expansion of Japanese auto factories in the United States.

TSMC has committed to making its $65 billion Phoenix investment in 2020. that local economic development officials have been courting for years. and two years before the CHIPS Act passed Congress on a bipartisan vote led mostly by Democrats. Similarly, Intel began its Chandler expansion before the legislation went into effect.

Neither TSMC nor Intel has yet received federal funding, and it’s possible those funds will be distributed to the companies before Trump takes office.

It’s too early to predict with certainty Trump’s impact on CHIPS Act spending

U.S. Sen. Mark Kelly and U.S. Rep. Greg Stanton, both Democrats, warned of Trump’s threat to the CHIPS Act and semiconductor companies operating in the state.

At a press conference held in late October, They warned of job losses and other detrimental effects on the state if Trump rips up the law. Kelly said it would “bring the state’s economy to its knees,” adding that Trump’s plan to add tariffs would increase the cost of many imported goods.

Others with stakes in Arizona or the CHIPS Act reacted with mostly muted reactions or no reaction at all. For example, a TSMC spokesperson in Arizona said only in a post-election statement that the company’s “investment plan in the United States has not changed.”

Similarly, an Intel spokesperson downplayed Trump’s recent rhetoric and noted that the CHIPS Act was based on proposals put forward by officials in his first administration.

“Reestablishing America’s leadership in semiconductor manufacturing is integral to the nation’s economic competitiveness and national security,” Intel said in a post-election statement. he said. “As the only American company designing and manufacturing cutting-edge chips, Intel has a critically important role to play, and we look forward to working with the Trump Administration on this shared priority.”

Chris Camacho, president and CEO of the Greater Phoenix Economic Council and one of the local officials who helped attract TSMC here, said he remains optimistic about continued federal support and emphasized the importance of semiconductors to national security, noting that the CHIPS Act has bipartisan support. .

About 40 semiconductor-related companies have operated or expanded operations in Arizona since 2020, he said, while another two dozen or so companies are considering projects there.

Semiconductor advancement: TSMC to start commercial semiconductor production in Phoenix sooner than expected

Recent semiconductor successes in Arizona

The risks are particularly high here because Arizona companies can receive disproportionately large amounts of federal grants and low-cost loans under the CHIPS Act; $8.5 billion for Intel, $6.6 billion for TSMC, $400 million for Tempe-based Amkor Technology for chip testing and packaging facility in Peoria and $162 million for Chandler-based Microchip Technology for projects in other states.

Sunlit Flou & Chemical Co. in Taiwan Many suppliers such as have also come to Arizona. A chemical complex opened near the TSMC complex in north Phoenix, the first such U.S. investment.

Also educational institutions, including Arizona State University In line with funding under different programs of the CHIPS Act.

In addition to describing the CHIPS Act as bad, Trump accused Taiwan of “(stealing) our chip business.”

Still, there are reasons to think that the new administration may not abandon the CHIPS Act altogether. First, this dovetails with many of Trump’s initiatives to revitalize manufacturing and is rooted in proposals made during his first administration. Additionally, many of the largest investments announced so far are in red states or battleground states like Arizona, Ohio and Texas.

But the next Trump Administration could change the size of the grants or change other details, such as funding phases tied to job creation, workforce benefits, environmental practices or other policies at recipient companies. At the very least, it is likely that the new president will leave his mark on the program.

Contact the author at [email protected].

Related Posts