Reshoring Semiconductor Manufacturing in Arizona

Arizona stands at the forefront of a national effort to reshore the semiconductor supply chain, with substantial investments from the Creating Helpful Incentives to Produce Semiconductors and Science Act, (CHIPS Act 2022), and industry leaders such as Intel and Taiwan Semiconductor Company (TSMC). Arizona is ideal for semiconductor manufacturing because of its business-friendly tax structure, cheap land, and its history with the industry. However, realizing Arizona’s potential as a semiconductor hub requires overcoming critical market forces, as the state currently lacks sufficient incentives to attract entrants and create spillover benefits in the market. This proposal recommends certain tax incentives specifically to attract semiconductor companies throughout the supply chain. This policy action offers an approach to fostering innovation and ensuring Arizona’s long-term competitiveness in the semiconductor sector. By aligning state policy with industry needs, Arizona can secure its place as a leader in the U.S. semiconductor landscape, driving economic growth, supply-chain resilience, and technological innovation.