Arizona Could Be Ground Zero in U.S. Microchip Self-Reliance

Arizona’s technology sector will play a prominent role in American manufacturing’s latest plan to reclaim its title as the world’s leader in semiconductors from Asia.

One of the lessons learned from the COVID-19 pandemic was the need for U.S. manufacturing companies to diversify their supply chains. Semiconductor production slowed to a crawl in 2020, causing microchip shortages worldwide. The void in chips led to a systemic supply chain disruption in several industries, most notably for automobile manufacturers.

According to semiconductor industry leaders, the answer to that dilemma in domestic production is the National Semiconductor Economic Roadmap. The Arizona Commerce Authority said Tuesday the plan would address three steps necessary to creating a thriving semiconductor manufacturing sector in the U.S.: finding and training a workforce, establishing a resilient supply chain, and installing the surrounding infrastructure.

“Today more than ever, we see the strategic importance of a robust U.S. semiconductor industry,” said Pat Gelsinger, CEO of Intel. “Intel has been at the forefront of designing and manufacturing semiconductors in the United States for over 50 years, and many of our leading commercial and technological innovations have grown out of Arizona.”

The group’s first meeting is planned for October, with the final roadmap unveiling due in July 2022.

“States have a pivotal role to play in advancing U.S. competitiveness,” Arizona Gov. Doug Ducey said. “Arizona looks forward to engaging with other states and industry leaders to establish an industry-led roadmap to help drive U.S. semiconductor leadership for decades to come.”

The U.S. once was a major supplier of semiconductors, the silicon-centric material used in microchips that power electronic devices, but 80% of the facilities are now based in Asia.

With Intel announcing in March a $20 billion plan to build two more fabrication facilities (fabs) in Arizona and the Taiwan Semiconductor Manufacturing Company’s plans to build a new fab in Phoenix, the state is expected to see a large share of the planned expansion.

“As Arizona’s experience has shown, states are on the front lines of semiconductor investment and attraction,” Arizona Commerce Authority President Sandra Watson said in a news release. “We’re proud to help lead this historic effort alongside our state and industry partners to develop a shared vision, one that can help drive American semiconductor leadership for decades to come.”

The Arizona Commerce Authority said Arizona is one of the “top-four” states for semiconductor industry share.

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This article was published on September 28, 2021, and is reproduced with permission from The Center Square.