By Audrey Jensen | Phoenix Business Journal
Intel Corp.’s existing chip fab and $20 billion expansion in Chandler, in addition to Onsemi and Microchip Technology Inc., have helped build up the Valley’s semiconductor ecosystem and paved the way to attract TSMC (Taiwan Semiconductor Manufacturing Company) and future suppliers to the Valley, experts say.
Intel, which has operated in Arizona since 1979, said it purchases from hundreds of suppliers based in Arizona and the Phoenix region.
Motorola building on McDowell Road in south Scottsdale, Apr. 1957.
The semiconductor industry, which first moved into Phoenix around 1950 with Motorola, supports technologies dependent on chips that require a supply chain full of companies involved in design; production; assembly, testing and packaging; integration and consumption.
This entire process of a producing a chip can take months and more than 1,000 steps — and cross international borders 70 times — before reaching an end customer, according to the Center for Security and Emerging Technology at Georgetown University. All of these steps also rely on advanced semiconductor manufacturing equipment; materials like chemicals and gases; design software and intellectual property.
The complex, $500 billion global semiconductor supply chain is critical to the success of companies like TSMC, which makes 50% of the world’s chips and has more than 2,500 direct suppliers and 10,000 indirect suppliers. TSMC, which uses a pure-play foundry model, said the construction of its 5-nanometer fab in Arizona has driven investment from leading suppliers to Arizona.
“Some are starting their first U.S. operations in Arizona, and others are expanding their U.S. operations.,” Nina Kao, head of TSMC public relations, said in an email. “They bring new strengths to the U.S. semiconductor supply chain and will contribute greatly in ramping up leading-edge chip manufacturing. When our Arizona fab is complete, TSMC’s customers will benefit from having the proximity of a world-class foundry and the supply chain that surrounds this industry.”
Bob Hess, vice chairman of global strategy for Newmark Inc. and member of the Site Selectors Guild, said that bringing more suppliers and related companies to Arizona, one of a handful of states that’s leading in the semiconductor industry, can also benefit existing semiconductor companies in the area.
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