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Arizona is becoming a microchip manufacturing center at just the right time

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Posted at 4:26 PM, Nov 11, 2021
and last updated 2021-11-13 09:57:56-05

PHOENIX — A worldwide shortage of microchips is turning the semiconductor industry on its head.

As it turns out, that is good news for Arizona, and more importantly, the greater Phoenix area.

In North Phoenix along Loop 303, the Taiwan Semiconductor Manufacturing Company’s 5.6 million square foot chip plant is beginning to take shape. TSMC says its Phoenix plant will open in 2024.

When it opens, it will produce microchips for some of the world’s biggest suppliers of computers, smartphones, automobiles, and appliances.

“It’s been exciting to see how Phoenix has been transformed. The greater Phoenix area is now #1 globally for semiconductor investment. We are on the map in a big way,” said Phoenix Mayor Kate Gallego. “If anything it’s going to help us with the recovery of the shortage.”

In Tempe, Bear Hendley is one of the owners of Walts TV and Appliance, a family-run business that began in a garage in 1957 as a TV repair shop. Walts has grown into a high-end appliance store with an online business that covers 48 states. The merchandise Walts sells rely on microchips.

The chip shortage has changed the way Walts does business. Some of the refrigerators on the showroom floor were purchased in January but they didn’t arrive until July. Normally, Hendley says, the store doesn’t start buying for Christmas until September. This year they started building inventory in the spring.

“Certainly there’s concern, we’ve been experiencing shortages in different product categories. But we’ve been preparing since early last quarter,” said Hendley.

Hendley says vendors are now warning him the microchip shortage is driving up the cost of the chips as the suppliers compete to purchase them. Higher chip prices will eventually mean higher prices for televisions, entertainment centers, and appliances like refrigerators, washers, and dryers. Hendley says customers know about the chip shortage and started buying for Christmas in early October. “We’re more concerned keeping the cost low for our customers,” Hendley said.

The shortage of microchips is expected to last for at least another year or two. About the time the Taiwan Semiconductor Manufacturing Company and INTEL, which is currently expanding its chip making and developing capacity in Chandler, are in production. Bear Hendley says he will be ready for that day.