By Madeline Salazar – Contributor
Last year, Taiwan-based chip company Taiwan Semiconductor Manufacturing Co. (TSMC) announced plans to expand its footprint in north Phoenix from $12 billion to an estimated $40 billion to build its massive U.S.-based semiconductor hub — one of the largest foreign investments ever made in U.S. history, and the largest ever made in the state.
The TSMC plan may be the biggest example of foreign investment in Arizona but it should come as no surprise that foreign investors have taken notice of Arizona, which is quickly emerging as a thriving hub for global commerce.
“Arizona has become the go-to destination for the world’s most advanced technology companies,” said Sandra Watson, president and CEO of the Arizona Commerce Authority.
Arizona’s biggest trading partners remain Mexico and Canada, but in the last four or five years, Arizona has begun attracting the attention of European and Asian investors, said Christine Mackay, Phoenix’s economic development director.
“We've come into a place where we've never been before in foreign direct investment,” Mackay said, adding that foreign investment in the state is now primarily focused on advanced manufacturing, especially semiconductors, batteries, electric vehicles and biotechnology.
Last year, expansion projects were announced by companies such as Switzerland-based Nestle, which announced a $675 million investment to build a factory in Glendale, and South Korean electronics giant LG Energy Solution, which invested $1.4 billion to build a high-tech battery facility in Queen Creek.
Foreign investors are attracted to the state for many of the same reasons domestic companies are flocking to Arizona: the state’s favorable regulatory environment, strategic geographic location, availability of land, amenable climate and a built-in talent pipeline to draw a skilled workforce.
Another big draw has been government programs aimed at strengthening U.S. supply chains by bringing high-tech manufacturing back to the states. The CHIPs Act, for example, was among the reasons TSMC decided to expand its Arizona operations, said Senator Mark Kelly, who championed the CHIPs Act and called the TSMC investment “a big win” for Arizonans.
Foreign investment isn’t just a boon for Arizona’s economy, it’s also a job creator. The TSMC fabrication plants (fabs) in north Phoenix alone will create 21,000 construction jobs and will employ an estimated 4,500 permanent workers. Today, foreign investment provides jobs for more than 133,500 workers in the state.
Experts anticipate recent high-profile investments will only make Arizona a more attractive destination for foreign investors.
“Once you become known as a great place for foreign direct investment,” Mackay said, other companies take notice. “Activity begets activity.”
The surge of foreign investment in Arizona shows no signs of slowing down, with the state continuing to attract companies from all corners of the world. As more companies set up shop in the state, they will contribute to job creation and economic growth, further cementing Arizona's status as a top destination for global commerce.