How federal investments are shaping Phoenix’s semiconductor sector

President Joe Biden has made it clear he wants more semiconductor chips to be made in America.

The CHIPS and Science Act, which he signed into law in August 2022, included $52.7 billion for semiconductor manufacturing, research and development. At the bill signing ceremony, Biden said it would help the United States “lead the world in future industries and protect our national security.”

Now that money is starting to flow.

As part of our ongoing “Breaking Ground” series — which examines how the Inflation Reduction Act, CHIPS and Science Act and the Bipartisan Infrastructure Law are changing the role of government in the economy — “Marketplace” host Kai Ryssdal visited Phoenix with Washington Post columnist and Marketplace contributor Heather Long. The Arizona city is known as the ‘Silicon Desert’.

“This is ground zero for the new economy,” Long told Ryssdal. “I mean, the people are here, the money is coming here — (it’s) one of the fastest growing areas in the country — and they’re about to get an even bigger cash infusion from the federal government.”

The semiconductor industry is not new to Phoenix. Motorola, which opened a research lab in the city in 1949, began Phoenix’s foray into semiconductors; Intel has been making chips there since the 1980s. But thanks to a boost from CHIPS Act funding, massive expansions are underway.

Intel, which received $8.5 billion in direct funding from the CHIPS Act, plans to invest $20 billion to build two chip factories in Arizona. Taiwan Semiconductor Manufacturing Co., or TSMC, which also received CHIPS Act grants, is building three factories in Phoenix at a cost of more than $65 billion.

In a column for The Washington Post, Long explored the challenges ahead as the Biden administration attempts to reshape the semiconductor industry in the United States.

Click on the audio player above to hear the first episode of Ryssdal and Long’s reporting from Phoenix, including a visit to the TSMC construction site and a training center for people crucial to completing America’s new semiconductor factories.