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The CHIPS and Science Act has provided funding to several large semiconductor facilities in Arizona, including Taiwan Semiconductor (NYSE:TSM), which is investing $40 billion in multiple semiconductor fabs in the Phoenix area, and Intel (NASDAQ:INTC), which is receiving $8.5 billion to invest in Arizona, New Mexico, Ohio and Oregon. Another smaller semiconductor company is the latest to benefit from CHIPS Act funding.
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Amkor Technology, based in Tempe, AZ, is planning a new manufacturing facility in Peoria, AZ. Amkor is an OSAT (Outsourced Semiconductor Assembly and Test) service provider. OSAT companies play a critical role in the semiconductor supply chain, focusing on the back-end processes of chip manufacturing. Amkor’s planned facility would be the largest OSAT facility in the country. The project proposal includes up to $400 million in direct financing and access to up to $200 million in loans. The Semiconductor Industry Association has endorsed the deal, saying it would strengthen advanced packaging operations, which are key parts of the chip manufacturing process. During Amkor’s most recent earnings call, CEO Giel Rutten said the facility, once operational, would contribute less than 10% of the company’s total production and would use technology similar to that used at its facilities in Korea.
The project, first announced last year, has been approved by the city. Amkor expects to spend about $2 billion to bring the project, which will employ about 2,000 people, to full operation. The 55-acre campus will include more than 500,000 square feet of cleanroom space. Public infrastructure associated with the project will be located at Five North at Vistancia, a 320-acre mixed-use lifestyle and employment development.
The CHIPS Act, signed into law in 2022, has dedicated about $30 billion of its $52 billion investment to building the U.S. semiconductor industry. While Intel and Taiwan Semiconductor have faced challenges getting their facilities up and running, the impact of these planned factories is already being felt in the Phoenix area.
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Phoenix is positioning itself to become one of the top U.S. hubs for semiconductor companies, and where high-paying jobs go, expensive real estate often follows. With an estimated 50,000 jobs expected from Taiwan Semiconductor alone, the pressure is on to build both high-end rental housing and homes for sale. Major homebuilder Lennar (NYSE:LEN) plans to develop more than 700 homes near one of Taiwan Semiconductor’s manufacturing plants.
For the Phoenix area, the ongoing expansion has been a mixed blessing. While it’s positive for local businesses and attracts real estate developers eager to transform desert land into new residential communities, some residents are concerned about the rapid growth. One resident told Marketplace that the new construction is “pretty threatening to my way of life.”
While the Amkor facility is a relatively small project compared to other plants, its location in the relatively smaller city of Peoria, with a population of about 200,000, could give it an outsized impact. In Peoria, where the new Amkor facility will be located, the average sales price for a home is $533,750, suggesting that homes are at a premium. The city does have time to plan, however; construction on phase one won’t be completed until 2027, and the entire project won’t be finished until 2034.
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This article Arizona Keeps Getting Hotter, Another Semiconductor Company Signs Massive Deal originally appeared on Benzinga.com
