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Economic Collaborative of Northern Arizona (ECoNA) — What CHIPS Could Mean for Northern Arizona

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Good afternoon,

Earlier this month, ECoNA’s Advisory Council heard a presentation from Joe Russell, Legislative Assistant to Senator Mark Kelly, about the implementation of the CHIPS and Science Act, which was signed into law this past August.

For more than a year, Sen. Kelly had championed the underlying pieces of legislation that formed the act, and served as the Arizona representative on the conference committee to reconcile the Senate and House versions of the bill.

The Act includes a $52 billion plan to boost domestic microchip manufacturing; a four-year, 25% investment tax credit to provide long-term incentives for semiconductor manufacturers and suppliers to construct or expand facilities in the United States; and $13.2 billion for research and development and workforce development.

Arizona has become a major home to microchip manufacturing in the United States, so much so that a Forbes magazine article last year called the state “Semiconductor Central,” with heavy hitters like Intel and Taiwan Semiconductor Manufacturing Company that have several fabrication facilities in Phoenix and Chandler.

But Maricopa County isn’t the only area that could benefit from the new funding.

Major semiconductor facilities depend on dozens – even hundreds – of small and medium sized manufacturers to provide components and supplies used in the fabrication process. Northern Arizona and other parts of the state could attract those companies that want to start up or relocate to the state but don’t necessarily need to be in Phoenix.

The other major impact for our region would be for our higher education institutions. The law provides additional funding through the National Science Foundation for increased research opportunities. Meanwhile, both Northern Arizona University and Coconino Community College can benefit from the STEM education funding to ensure that the state creates the tech-savvy workforce this sector requires.

Nationally, the CHIPS and Science Act will boost American semiconductor research, development and production, It will help usher in a new era of U.S. leadership in the technology that forms the foundation of everything from defense systems to household appliances. Locally, it can help spur manufacturing in northern Arizona and the creation of additional high-paying jobs in our region.