Sat. Apr 13th, 2024

In Arizona, an $8.5 billion CHIPS grant spells ‘jobs’ more than geopolitics

By 37ci3 Mar21,2024


CHANDLER, Ariz. – In booming metro Phoenix, a rare bipartisan push by Washington politicians to bolster national security amid a high-tech arms race with China is fueling enthusiasm for something more fundamental: jobs.

Fresh $8.5 billion flow in CHIPS and Science Act funding In Chandler, 30 minutes southeast of downtown Phoenix, Intel is expected to bring thousands of high-paying roles to the region to help build two semiconductor plants and upgrade an existing plant.

“That’s what the city needs — jobs,” said lifelong Chandler resident Alfred Garza, who said over the years he’s watched the balloon “go to where they’ve taken away all the natural beauty, my God.”

“I hope it helps the community, because look, this side of town is still in disrepair,” he said. “Intel, I think, would be a good start.”

Manufacturing in America is good – for me and many others sitting in our community.

Alred Garza of Chandler, Ariz.

The tech giant already employs 13,000 people in the Phoenix area and at the White House It predicts that Arizona projects will form 3,000 more manufacturing roles and at least twice as many construction jobs — matching gains expected in Ohio, the second of four states, along with New Mexico and Oregon, where federal grants have helped Intel expand its chip operations.

“Manufacturing in America is good — good for me and a bunch of others sitting in our community,” Garza said.

It’s a sentiment many officials in Chandler were happy to talk about Wednesday.

Lael Brainard, director of the National Economic Council, told NBC News that “CHIPS and the Science Act are huge job creators,” adding that the impact will extend beyond Intel’s own workforce. “It also causes all kinds of nearby restaurants to do business, small service businesses nearby to start up and hire their own workers.”

Joe Biden
President Joe Biden spoke with Intel CEO Pat Gelsinger at the Arizona chip plant on Tuesday.Jacquelyn Martin / AP

Intel’s funding, which includes loans of up to $11 billion, is the latest award of a $52.7 billion pool that began to run out late last year. The first grant, totaling $35 million, was allocated to help BAE Systems expand chip production for fighter jets Nashua, New Hampshire.

Now, with a focus on semiconductor heavyweights like Intel, the only U.S. company that both designs and manufactures high-end chips, bigger prizes are heading out the door.

But relative to the billions of dollars in the Biden administration’s other domestic spending — namely, from the De-Inflation Act and the Bipartisan Infrastructure Act — CHIPS funding is not primarily intended to juice the domestic economy. That’s to insulate the country’s chip supply from growing competition from China, whose ambitions to control Taiwan, a self-governing island and global chipmaking hub, helped speed a bipartisan package through Congress in 2022.

We want this industry here. … More important than the location of oil reserves in the last 50 years.

Intel CEO Pat Gelsinger

Intel CEO Pat Gelsinger told NBC News on Wednesday, “After three decades of these supply chains drifting toward Asia, all of a sudden we realized we’re not going to build them in the United States anymore.” chip shortage during pandemic It highlighted “both the economic and national security implications of such a critical industry.”

“I think of the CHIPS Act as the most important piece of industrial policy legislation since World War II,” he said, noting that technologies from electric vehicles to generative artificial intelligence all depend on semiconductors. “We want this industry here. … In the last 50 years, it is more important than where the oil reserves are.”

But all politics is local, as they say – even if it’s geostrategic.

“These are great jobs,” Gelsinger said, citing opportunities for pipefitters, welders, construction workers, wafer technicians and “top-level PhDs inventing new molecules.” But it is the communities that support them,” he said. “It’s school teachers, it’s police officers — it’s great for the economy.”

And in a purple state like Arizona, which he won in 2020 By just over 10,000 votesBiden never misses an opportunity to emphasize economic development.

Speaking at an event celebrating the deal Wednesday, Biden said the Phoenix-area jobs supported by the Intel grant will pay an average of more than $100,000 a year, and many will be unionized and won’t require a college degree.

“That’s a change!” announced.

Aaron Pool, founder of Gadzooks Enchiladas and Soup, said he hopes the new chip factories, known as “fabs,” will mean more eateries for his restaurant chain after the hybrid business reduced foot traffic.

“It’s going to open on Tuesday and then it’s just going to be kind of quiet,” he said. “By getting people out of the chip fab, I think we’ll see that translate at some point.”

Todd Sanders, chief executive officer of the Greater Phoenix Chamber of Commerce, said expectations like Pool’s are common in the local business community.

“People are aware of what’s going on,” he said. “Small businesses are looking for ways to be part of this ecosystem.”

In addition to Intel, Taiwanese chipmaker TSMC already has a footprint in Phoenix and plans to build a second U.S. semiconductor factory in the metro area. while that project has been postponedcompany too It is expected to receive CHIPS Act funds to support.

Intel's newest factory, Fab 42, became fully operational in 2020 at the company's Ocotillo campus in Chandler, Arizona.
Intel already operates a semiconductor plant in Chandler, Ariz.Intel Corporation / GDA via AP file

The Phoenix-Mesa-Chandler metro area grew by nearly 200,000 people from 2020 to last year. census estimates released last week. As the chip industry plans local expansion, some residents fear an influx of well-paid workers could keep inflationary pressures down, Pool said, citing higher costs for everything from labor to beef, which are “cruel” to Gadzooks.

“A lot of people are saying it’s going to drive up prices on housing and everything,” he said. Already, rents in Maricopa County have increased 37% since 2020, according to Zillow, and mortgages have increased 53% during that time, according to Redfin.

“We’re at a point where you can’t raise prices anymore,” Pool said. “Consumers won’t allow it.” That left some area business owners in what they called a “holding pattern,” waiting to see the next turnaround in the regional economy.

After rising to 13% in summer 2022, 4 percentage points above the US peak at the same time, Inflation eased to 2.2% in Phoenix, lower than the current national level of 3.2%. Since that roller coaster ride, Pool said, the city’s business climate has “just been kind of lethargic.”

Sanders remains optimistic, pointing to the state’s efforts to diversify its business base and invest in infrastructure while minimizing “burdensome” regulations.

“I don’t know that companies moving here are going to create inflation,” he said, then pointed to something that’s on everyone’s mind: “I think what they’re going to do is create jobs.”



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