Sources: Major semiconductor maker zeroing in on Phoenix site for huge factory

27 | 10 | 2020

An expansive swath of desert in north Phoenix is likely the landing spot for Taiwan Semiconductor Manufacturing Co. Ltd.’s $12 billion plant, multiple sources with knowledge of the deal confirmed.

Article originally posted here.

The world’s largest contract silicon chip manufacturer announced in May that it was planning to build a $12 billion plant in Phoenix and create more than 1,600 jobs. Taiwan Semiconductor (NYSE: TSM), which makes silicon chips for Apple and several other major technology companies, has been evaluating several sites in Phoenix for the factory. The company is expected to officially confirm the location by the end of the year.

The north Phoenix site, which extends across nearly 3,700 acres near I-17, is currently undergoing a rezoning through the city of Phoenix, which will create a major employment corridor in north Phoenix. The proposed zoning includes three districts: a technology campus, a technology park and freeway mixed-use development. The Phoenix City Council’s hearing on the rezoning is scheduled for Oct. 21, but public documents do not mention a potential user for the site.

The land is owned by the state, but the first portion of the site, a 1,128-acre parcel at the northwest corner of Loop 303 and the 43rd Avenue alignment, will be sold for a minimum of $89 million at an auction scheduled for Nov. 2.

The portion scheduled to be auctioned on Nov. 2 is proposed to be rezoned as a technology park, which is allowed the same uses as a general commerce park zoning and allows offices, research laboratories, warehousing and manufacturing, and prohibits any type of residential use. The zoning allows for buildings 56 feet in height, or up to 80 feet with a use permit and site plan. According to city documents, 10% of the technology park portion must remain open space.

Manufacturing jobs needed

Landing the factory would bolster the Valley’s semiconductor industry, which has been slowly been bleeding jobs as more manufacturing has taken place offshore. It also will bring a bigger player to the region that includes the likes of Intel Corp. (Nasdaq: INTC), with its Chandler campus employing about 12,000 people as well as ON Semiconductor Corp. (Nasdaq: ON) and Microchip Technology Inc. (Nasaq: MCHP).

Intel’s long-awaited $7 billion expansion in Chandler became operational earlier this year, making the southeast Valley semiconductor fabrication factory the chipmaker’s largest in the U.S. The company hired 3,000 workers over the last 18 months to work at the new fabrication facility.

Phoenix-area officials reached for comment didn’t confirm Taiwan Semiconductor had selected a site, and company officials couldn’t be immediately reached for comment.

“They are still considering multiple sites in Phoenix and should make a decision before the end of the year,” Christine Mackay, economic development director for the city of Phoenix, said in a statement.

In a statement, Chris Camacho, president and CEO of the Greater Phoenix Economic Council, said: “There continue to be multiple sites under review at this time.”

Arizona Gov. Doug Ducey said in a May statement that the Taiwan Semiconductor project will create 1,600 high-tech jobs, as well as thousands of additional jobs for suppliers. The $12 billion in capital expenditure will take place from 2021 to 2029.

“TSMC could have picked any place in the world to build this advanced manufacturing factory. They chose Arizona for our unbeatable business climate, already thriving tech sector and ready access to an international supply chain,” Ducey said at the time.

Taiwan Semiconductor has been working this week with the Trump administration as part of a White House effort to bring manufacturing jobs to the U.S. and reduce reliance on foreign sources for components sensitive to national security interests.

Construction for the plant is scheduled to begin in 2021 and production is planned to begin in 2024.

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