• Taiwan Semiconductor Manufacturing Co. (TSMC) will invest an additional $100 billion in microchip R&D and manufacturing in Arizona.
• The investment comes at a time of economic uncertainty due to Trump’s disruptive policies, including tariffs on Mexico and Canada.
• • The investment should turbocharge Arizona’s economy, but it will require significant planning.

Major events that have disrupted the world may very soon transform Arizona into an essential player in the evolving North American tech economy.

Donald Trump announced on Monday that Taiwan Semiconductor Manufacturing Co. (TSMC) — perhaps the most important corporation in the world — is about to make an additional $100 billion investment in microchip R&D and manufacturing in the United States, much of it in Arizona. 

Already the company has committed some $65 billion to construct three fabrication plants in the Grand Canyon State, drawing on billions of government dollars from the bipartisan CHIPS and Science Act. 

Now, TSMC is announcing it will build three new chip plants, a research and development center and two chip-packaging plants in Arizona. 

TSMC’s investment was already record-breaking

Even before this latest piece of news, TSMC’s investment represented the largest foreign-direct investment in Arizona history and one of the largest in American history.

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Add to that now three new rockets of economic growth in this state, and TSMC will be investing $165 billion to build microchips in America and to keep U.S. manufacturers equipped with them.

Microchips are the data-processing brains and components that power modern machines, appliances, automobiles, aircraft and tanks.

TSMC develops some of the most advanced microprocessors in the world. They’ve been so successful that they’ve cornered 90% of the global market on advanced chips.

COVID-19 created an opportunity for Arizona

That became an urgent concern when COVID-19 struck in 2020 and supply lines seized in the Asian Pacific, cutting off American manufacturers from advanced chips necessary to build their products, including weapons and delivery systems that comprise the arsenal of democracy.

Add to that China’s growing threat to Taiwan, where many of these chips were manufactured, and it soon became an urgent federal priority to bring more microchip manufacturing to American shores.

Congress worked to bring the microchip industry home with the CHIPS Act that would invest billions to prime the pump for greater chip manufacturing.

U.S. Sens. Kyrsten Sinema and Mark Kelly of Arizona were chief architects and negotiators of that legislation.

Trump is creating economic uncertainty

There is a catch, however, to all the good news.

Monday’s announcement comes at a time of growing uncertainty and fear about the American economy, world markets and even long-standing alliances with our closest friends.

Donald Trump’s disruptive style of governance is scaring investors, business people and world leaders.

Also Monday, Trump announced he was throwing down 25% tariffs on Mexico and Canada, our largest trading partners, in what is certain to set off a destructive trade war.

In reaction, U.S. stocks tumbled to their lowest point this year, with the S&P 500 falling 1.8% and the Nasdaq tumbling 2.6%.

Meanwhile, in Europe, our Western allies are wondering aloud if North America and Europe will remain allies in defending the free world after the eruption of bad feelings on Friday in the Oval Office between Trump, his Vice President JD Vance and Ukrainian President Volodymyr Zelenskyy. 

Disruption could upend the best-laid tech plans

As noted, disruption can create opportunity, as the pandemic and Chinese threat to Taiwan has for Arizona’s economy. But it can also upend the best laid plans of Taiwanese investors and American economic planners.

If China one day soon decides to blockade or invade Taiwan, it could spark a global recession and dry up manufacturing and the demand for microchips.

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Smaller slowdowns have already created delays for TSMC in Arizona. But a global recession would cut down hard on manufacturing.

Nothing is a given.

If the fates agree, however, and these plans move forward, all of us in Arizona will need to begin thinking about this state in new ways. 

Arizona could massively change. Are we ready?

A behemoth like TSMC brings with it scores of other manufacturers and their factories that want to be nearby. In fact, that’s already begun. 

As The Arizona Republic’s Russ Wiles points out among many examples, “Apple, TSMC’s largest customer and the most valuable corporation in the world, would invest $500 billion in new American manufacturing in coming years, with Arizona a focal point for that, too.”

It means that Arizona economic, political and education leaders will need to be on their A-game to deliver labor, housing, infrastructure, water, power and a thousand other needs.

It means that this state will be brimming with opportunity for anyone with the imagination and pluck to seize it. 

Phil Boas is an editorial columnist at The Arizona Republic. Email him at [email protected].