Ambassador Event: APAC Insights

How the path of a semiconductor chip leads to Greater Phoenix

As global supply chains shift, Greater Phoenix is at the center of investment and relationships with Asian countries and trade groups developing technology in the southwest United States.

Efforts to reshore manufacturing over the past decade have largely coalesced in Greater Phoenix, home of TSMC’s $165 billion investment, Amkor’s headquarters and a new $7 billion advanced packaging build, LG Energy Solution’s $5.5 billion facility, and the first direct routes between Arizona and Asia through Phoenix Sky Harbor International Airport and Taiwan Taoyuan International Airport.

“The transportation and efficiency is the core of globalization,” said Dexter Ho of STARLUX Airlines. “Sky Harbor will rapidly grow into another gateway in the southwest region.”

A new report from the Greater Phoenix Economic Council (GPEC) explored trade growth between Arizona and the Asia-Pacific (APAC) region, positions of regional strength in workforce, industry growth and CHIPS Act investment, and challenges  the state and nation are experiencing.

Adjacent to the release of the report was a panel discussion with local industry leaders. This panel consisted of:

• Allison Grigg, Director of State Government Affairs, Amkor Technology
• Eric Park, External Affairs & General Project Manager, LG Energy Solution Arizona, Inc. (LGES)
• Ho Wei (Dexter Ho), Phoenix Branch General Manager, STARLUX Airlines
• Christine Mackay, President & CEO, GPEC (Moderator)

“We see the potential. Greater Phoenix is different from other cities,” Ho said. “The economic side is growing and the bond with Asia is growing.”

See the report here.

Tracking the semiconductor chip around the world

Over the last few decades, the path of a semiconductor chip from design to implementation has become increasingly globalized. Almost 40% of the supply chain in 1990 was centralized in the United States, but 40 years later, that had decreased by about 67%.

“The journey of a semiconductor chip is extremely fascinating and very global,” Grigg said. “It will cross multiple oceans and continents and borders before it ever reaches its final destination.”

The first step is design, done by a company like AMD, Apple or NVIDIA. That takes place before fabrication, which primarily happens in Southeast Asia, but companies like Intel and TSMC have made investments to reshore the creation of the chip in the U.S. Grigg compared these steps to a bakery.

“The designers are like the chefs — they create the recipe, but they don’t bake it,” she said. “[The fabrication is] the bakery part. That’s the most capital-intensive part of the process, that’s where the chips are actually being made.”

From there, the chip goes through packaging and testing. That’s Amkor’s specialty, and its $7 billion facility under construction in Peoria will be the most advanced outsourced semiconductor assembly and test facility in the U.S.

In between, there’s upstreamed materials including substrates, specialty chemicals and gasses, and then finally integration into the device.

From that process, typically a journey that crosses the Pacific, Atlantic, or both, chips are produced and implemented into the device. How did this process end up centralizing in Greater Phoenix? While there are numerous reasons ranging from operating environment, taxes, CHIPS Act funding and affordability to workforce, lack of downtime and quality of life, the three panelists gave their reasons for making Greater Phoenix home with a common denominator at the center of each decision: community.

A welcoming community with open arms

Greater Phoenix’s community was built around several constructs to ensure that companies entering the market would have operating advantages.

LG Energy Solution (LGES) evaluated more than 200 locations in the U.S. across 12 different states before deciding on its Queen Creek location, Park said. There were a variety of the usual priorities — minimal red tape, faster and expedited processes for permitting approvals, shovel-ready sites — but at the forefront was access around the region as a whole.

“The uniqueness I found (in Greater Phoenix) is actually derived from the workforce and the accessibility to the downtown city,” he said, referencing the proximity between Queen Creek and Phoenix. “There are many expats from the globe, and there are going to be so many different cultures out there. That is why a certain level of quality of living needs to be verified before that, but in different states, it was so difficult to get a certain accessibility ... Here in Queen Creek, all we need to do is spend 40 minutes to get to downtown (Phoenix).”

The interconnected freeway system and roads laid along a grid provide routes between communities around Greater Phoenix, increasing access to workforce and allowing more diverse areas of living for employees. As such, LGES is able to hire a wider swath of talent for its multi-billion-dollar battery manufacturing facility, which will help the region develop strength in AI, small modular reactors and energy storage.

Aiding the talent pipeline and field of research is Arizona State University (ASU), which was already active in the battery field prior to LGES’ arrival in the market.

“When I first came here back in 2021, ASU actually sent a bunch of professors who were studying and doing research for batteries,” Park said. “That was very helpful for us to understand that the foundation is already here.”

LGES is targeting summer as the completion of construction and aims to produce batteries by December, Park said.

“Arizona was already well-known as the American chip-building state,” Park said. “We’re trying to do similar things right now, because as you can imagine, Arizona is the only state that has the true size a gigafactory for battery manufacturing.”

On the other side of Greater Phoenix, construction for Amkor’s advanced packaging and testing facility is taking shape in Peoria. The company received assistance from local economic development organizations to ensure best fit for its location, including shifting slightly northeast from the initially planned site.

“The secret sauce is collaboration between economic development groups. It really is,” Grigg said. “The city of Peoria moved mountains for us — quite literally, actual mountains were moved.”

Among key moments for Amkor was the continued development of Core 2 in the Peoria Innovation Core, allowing the company to relocate from a 56-acre site to a 104-acre site with infrastructure that was closer to TSMC Arizona and, as of the time of the August 2025 city council meeting, was 95% designed.

“We’re a huge company, but I don’t think that level of service would have been provided in another location,” Grigg said.

Park and LGES had a similar experience in Queen Creek.

“The collaborations, eagerness and willingness to support investment is totally different from what you can get in different states,” he said.

STARLUX pulls it all together with the launch of direct flights between Phoenix and Taipei. Flying four times a week, the connection offers a roughly 14-hour flight across the Pacific Ocean.

“Government support is vital, because if you miss any of the connection in the whole chain you won’t be able to launch a plane. But the community has been working for this … with all the expatriates, all the Asian community and the companies starting to develop, it is weird that we don't have a direct flight, right?” Ho said.

Now, they do.