MARK BRODIE: Phoenix earlier this month hosted SEMICON West, a major conference of leaders in the semiconductor industry. The Valley has been working to make itself a hub for the sector. Officials say the more than $160 billion investment by Taiwan Semiconductor Manufacturing Company is a big part of that. But other companies are also playing a role, including Intel, which has had a presence in the region for many years.
The Arizona Republic's Sasha Hupka has written about this and what the Valley needs to do to continue its current momentum. She joins me now to talk more about this. Good morning, Sasha.
SASHA HUPKA: Good morning. Thanks for having me.
BRODIE: Thanks for being here. So how big of a deal is it that Phoenix was the host of SEMICON West instead of a place like, I don't know, San Francisco?
HUPKA: So I think that the way to think about this is that this conference sort of legitimizes Phoenix's semiconductor hub, right? We've seen momentum behind bringing companies here now for years, including TSMC, which you just mentioned, kind of the juggernaut in that space. And this conference is sort of a global, almost recognition of the fact that Phoenix has become the domestic semiconductor manufacturing hub.
BRODIE: So, what does it say then? I mean, obviously it's a big deal on the global scale to have this conference here. For folks who came here from outside of Arizona, what were they saying about the Valley as a semiconductor leader?
HUPKA: Well, you got all the things, you know, people would usually say, right? "The weather was beautiful. They totally lucked out." ...
BRODIE: [LAUGHS] They weren't here in July, we should point out.
HUPKA: Right. It was like the first week of nice weather in the fall. But really, I mean, this represents just a huge shift in the U.S. You know, San Francisco and the Bay Area and California has long been thought of as sort of the semiconductor hub.
But what we're seeing is while there are a lot of companies that are headquartered there — Intel is one of them, they're headquartered in Santa Clara — increasingly, the manufacturing side is shifting here to the desert.
And so I think for officials here, this was a chance not only to sort of like bask in the glow of: "We're the big semiconductor manufacturing hub in the U.S. now." But also to start trying to draw more companies in, because these companies like to cluster sort of together in a group.
And so one of the focuses that they're going to have to have moving forward is sort of building this, like, end-to-end supply chain here.
BRODIE: Well, that's kind of been the hope for the area in north Phoenix where TSMC is, right? Like, yes, their factories there, but also other companies, maybe suppliers, other related businesses all sort of end up in that same part of the region, right?
HUPKA: You see that with Amkor. I think they're a good example of this. They're not in Phoenix, they're in Peoria. But they're just a few miles down Loop 303 from TSMC. And their presence here and then later their expansion of their investment here, all of that is directly linked to having TSMC right up the road.
BRODIE: So what do folks say that Phoenix and the Valley need to do to sort of continue to build on this momentum? And it can't all be sort of, as my mom would say, lollipops and unicorns.
HUPKA: So, I think there's a few things. The first, like I said, they need to kind of sort of continue to bring in these companies and build that end-to-end supply chain. I think Amkor is a good example of this. They do something called packaging and testing, which is sort of like the end process of creating a computer chip.
And until they sort of get their factory up and running here, there's not really going to be a presence for that piece of the manufacturing process in the Valley. So, that momentum in terms of bringing in suppliers and other related companies needs to continue. But I think that this also raises some really interesting questions around the sort of research and development end as well.
Because in semiconductor manufacturing, one thing I've heard over and over again from experts is that it's not just about what you're doing today, it's about what you're going to be able to do tomorrow. You know, the world is in this global chips race, because these tiny little computer pieces are integral to our ability to send emails and have autonomous vehicles and all of these futuristic technologies that are important for both our life today and in the future.
And it's going to kind of come down to which areas and which countries can keep up on designing new types of chips that enable more powerful technology going forward.
BRODIE: That would seem to speak to the need for education, especially maybe in higher education, in terms of preparing scientists and researchers and people who know about this to be able to do not just the manufacturing, but the research and development.
HUPKA: That's absolutely part of it. I would also say, though, you know, you mentioned the manufacturing. And that's a part of it, too. There's also a workforce need. If you're bringing in all of these companies, they're going to need people to do the actual work of manufacturing a silicon wafer into a computer chip.
And I think that that's where a lot of officials here see opportunities for Arizonans. Because historically our state has not been the most well educated on the higher education level. But a lot of these jobs don't require you to be.
BRODIE: Does it seem as though the folks with the companies and in the industry ... is the business climate here, what it needs to be? Are the things that the Valley might need to work on? Are they more policy things or are they more like just, we have to do this to get people up and running?
HUPKA: I think it's always both. ... Policy is reflective of what you want your outcome to be. And so I think that you'll see they need both. But I do also think on the policy front, there's going to be some interesting decisions that are also going to need to be made around data centers. Because what you see is that data centers and AI are sort of driving a boom in the chips industry right now.
And so there's this awkward reality as Valley officials on the local level, on the zoning level, tackle: Do we want data centers in our community? They use a lot of energy, they use a lot of water, they use a lot of space, and they don't create a lot of jobs, typically speaking.
As they grapple with that value proposition, they also have to sort of grapple with the reality that that's what's driving this industry, that now our region is sort of betting its hat on to a certain extent.
BRODIE: Yeah. Lastly, before I let you go, is there sort of a consensus on what the ultimate potential of this sector is — what's the ceiling for the Valley in the semiconductor industry?
HUPKA: I can't speak for the Valley specifically, but I can tell you that at SEMICON, something that was repeatedly said was the idea that this is going to be a $1 trillion industry soon, before the end of the decade. That's a lot of money.
BRODIE: Yeah. And the Valley, in theory, will have some slice of that, the hope is.
HUPKA: Yes. And I think part of the reason this story is so important is because it's not just about now. It's about the future and how do you get that piece of the pie.
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