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    • Behind the deal: Courting Taiwan Semiconductor took years. Now, it’s on a strict timeline

    Behind the deal: Courting Taiwan Semiconductor took years. Now, it’s on a strict timeline

    “Who would have ever thought in my career I’d be marketing a place called Biscuit Flats, bordering Deadman Wash?”

    That’s the quirky description used by Phoenix Community and Economic Development Director Chris Mackay as she joked about an area that will likely soon be one of the hottest places for development in the city.

    The area, which is now renamed the Sonoran Oasis Science and Technology Park, was the site of choice for Taiwan Semiconductor Manufacturing Co. Ltd., which bought 1,128 acres of land in the area, near Loop 303 and Interstate 17 for a massive manufacturing plant.

    Landing what would become the state’s largest foreign direct investment was a years-long process, Mackay said. The company originally reached out to the state of Arizona in 2016 for a project that never moved forward but talks got revived in 2019.

    Mackay and several other leaders from the city and state, including Phoenix Mayor Kate Gallego and representatives from the Greater Phoenix Economic Council, the Arizona Commerce Authority and the local utilities, traveled to Taiwan several times during the course of the next 12 months, even during the pandemic.

    “The concept was to create more of a science and technology park, and we really listened to what was of interest to them, and we had the ability to create that science and technology park,” Mackay said.

    First trip to Taiwan

    The delegation first traveled to Taiwan in May 2019, which happened to coincide with the celebration of the 40th anniversary of Phoenix’s sister city status with Taipei. During that meeting, the Phoenix team pitched two sites to TSMC that could accommodate them, one was Biscuit Flats, the other was along the Loop 202 South Mountain Freeway, which completed construction in 2019.

    “We had not pitched Biscuit Flats to any other company,” Mackay said. “In my mind, it was a decade away from being ready.”

    It wasn’t until the second trip to Taiwan that Mackay was told of the $12 billion investment TSMC planned to make in the fabrication facility. That trip was spent having in-depth conversations with TSMC leaders about necessary schedules and other needs.

    While TSMC and those working with TSMC have only acknowledged the $12 billion announced investment, some sources who are familiar with the deal but declined to be identified have said that the final project is likely much larger, totaling about $35 billion. TSMC was looking at several other states before the company narrowed in on Arizona, but Mackay said she could not divulge the names, due to a nondisclosure agreement.

    Mackay said she credits Phoenix Mayor Kate Gallego, who formerly worked in economic development for Salt River Project, for sealing the deal with TSMC.

    “I cannot speak highly enough about her,” Mackay said of Gallego’s knowledge of utilities and economic development as an asset for landing TSMC. “Dare I say, if she hadn’t been there, we would not be sitting here. That is what secured the project for us.”

    A delegation for Taiwan also visited Phoenix several times in the process, and in October 2020, after the company had announced it had chosen Phoenix but before it had purchased the land, Mackay and others from the city and state took busloads of people out to view the site.

    Ahead of schedule

    Now, the construction of the site is ahead of schedule, Mackay said.

    The shell of the building is scheduled to be complete in July of 2022, and equipment will start being brought in once the building is complete. Then, the company will start conditioning the fab — the facility where the computer chips are made — making sure to remove all contaminants from the air and establishing the clean rooms. The clean rooms must be up and running for months before the chips can be produced. That process will go from July 2022 to July 2023, Mackay said, and then the factory will start running test chips, and will continue testing through the end of 2023.

    “These buildings are such sophisticated buildings, they are building for technology that doesn’t exist today,” she said.

    Because of the cutting-edge nature of the building and the process, all aspects, including city permitting and work, the supply chain and all building, must stay strictly on schedule or risk derailing the project and costing millions of dollars for delays.

    “The timing of these projects is more critical than any other project you will work on in your career,” Mackay said.

    Icing on the cake

    Sandra Hoffman, assistant director of development for the city of Phoenix, has been the one leading the team working directly with TSMC and its suppliers that are coming to Phoenix and the Valley.

    “Now the focus is working with the suppliers and the pressure is on the suppliers,” Mackay said. “There are quite a number of them, and we cannot miss our mark on one of these suppliers.”

    Some suppliers have already announced plans to come to Arizona, and Mackay said she expects to see more Arizona Land Department auctions for supplier sites to happen before the end of 2021 and into 2022.

    Despite the high pressure, Mackay said TSMC has been “such a gracious partner” throughout the whole process, and the process has brought some fun experiences.

    “On our first trip to Taiwan, it was the mayor’s birthday, and every company we went to had found out it was her birthday,” she said. “They heard Americans liked icing, so there was extra thick icing on all the cake.”

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