In recent years, the Greater Phoenix economy has truly grown into its long-aspirational Silicon Desert nickname to rival California’s Silicon Valley. High-tech industry history here dates back to the 1940s—but the new arrival of billions of investment dollars and the buildout of facilities is lightyears from the days when Motorola was the only game in town, or even when Intel launched its first semiconductor plant in Chandler in the 1980s.
In its current stage of evolution, the most visible development has come with TSMC’s investment of $165 billion, breaking ground on their third facility this spring, and the entire vendor base and infrastructure to support their plans. For example, Tempe-based Amkor is one of the notable advanced manufacturers and suppliers that has been attracted to the area. They are currently trying to fast-track a $2 billion facility in Peoria to help test and package TSMC’s chips—assisted by a $400 million federal CHIPS Act grant.
As noted in last month’s Real State, property demand in that area of north Phoenix market is red-hot, with properties that were trading at $150-$170/SF less than two years ago now commanding $325-$350/SF.
Semiconductor Industry Impacts in CRE and Beyond
TSMC and the semiconductor industry have played a major role in the maturation of CRE and on several other levels, as the Valley creates its future:
- Cultural, with projects under development including multitenant retail and food and beverage focused on Taiwanese and other Asian investors. The trend even extends into multifamily projects, birthing centers and postpartum centers that accommodate the expectations of those unique cultures.
- Workforce development, with industry leaders such as Intel, TSMC, and XP partnering with Maricopa Community Colleges and Arizona State University to provide curriculum and training to meet the skills and knowledge needs of the semiconductor industry.
- Travel, with two recent announcements. First was STARLUX Airlines flights between Phoenix Sky Harbor International Airport and Taipei’s Taoyuan Airport starting in 2026, the first-ever nonstop air service to Asia from Phoenix. Then, at the beginning of June, Southwest announced a partnership with China Airlines, Taiwan’s largest carrier, with service also beginning next year.
Challenges Behind the Scenes
One cautionary note is that high-tech companies are facing increased headwinds, including tariff impacts on the federal level and from Valley city leaders and the state legislature as far as tax incentives and zoning rules.
- TSMC and Intel are among many high-tech manufacturers seeking exemption from tariffs, which they say could create cost and logistics issues.
- Amkor hired a director of state government affairs to help the company navigate pushback from local residents who are concerned about water use and other environmental concerns.
- The City of Phoenix has plans to implement stricter regulations for data centers, while Mayor Kate Gallego called for an end to the state’s “antiquated” tax incentives in her State of the City address in May.
Still, there is no debate that Arizona today plays a key role in the US economy, as a key inland distribution and logistics hub as well as semiconductor standout. Site Selection magazine recently ranked Arizona first in the Mountain Region for business investment attraction—calling it “the region redefining the future of tech.” The Arizona Commerce Authority reports 482 active business expansion projects, while the Greater Phoenix Economic Council has about 260 active deals. Savvy CRE investors can look to capitalize on the trends, every bit as much as the forward-thinking companies that are staking their claim in the desert.
R.O.I. Properties Now Offering Real Estate Services for Mandarin Speakers
To meet the burgeoning need for cross-cultural business communication, the newest addition to the R.O.I. Properties team is a native Mandarin speaker with expertise in real estate transactions. To learn more about this new service—as well as possible investment opportunities in the Valley hotspots for international CRE—please contact our office.
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