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REGIONS AMERICAS


Bittersweet chips I


THEMAYORSPEAKS:KATEGALLEGO


KATE GALLEGO, MAYOR OF PHOENIX, TALKS TO ALEX IRWIN-HUNT ABOUT PANDEMIC IMPACTS AND STRENGTHENING THE SEMICONDUCTOR ECOSYSTEM


n Phoenix, Arizona, the divergence between industries that have benefited and suffered during the pandemic is obvious. Kate Gallego, themayor of Phoenix, says the


US’s fifth-largestmetropolis by area has “seen a tale of two cities” over the past year. While the human toll of Covid-19 mounted and hospital- ity businesses grappled with subdued customer numbers, Phoenix was breaking records in other areas. Figures from fDi Markets indicate that in


CURRICULUMVITAE KATE GALLEGO


2019 Phoenix Mayor


Previously Phoenix city councilwoman; electric and water utility manager, Salt River Project


CITYPROFILE PHOENIX


Population 1,680,992 (US Census Bureau, July 2019)


Population growth +16.2% (between 2010 and 2019)


Construction activity growth +82% (between H1 2020 and H1 2019)


Main industries Healthcare, manufacturing, business and financial services


2020, Phoenix attracted its highest ever annual number of greenfield foreign investments. “It really has been a complex year for us,” says Ms Gallego. “We know so many people are strug- gling, and at the same time, we announced our largest ever foreign direct investment (FDI) in the state of Arizona. Taiwan Semiconductor Manufacturing


Company (TSMC), the world’s largest contract chipmaker, reportedinMay 2020 itwould build a $12bn fabrication (fab) plant in Phoenix. Other companies have followed in 2021, includ- ing Intel’s plans to invest $20bn into two new fabs near Phoenix, as the ongoing chip supply crunch fuels investment into new manufactur- ing capacity. “We believe semiconductors are only going


to be in more of the devices we have. We sawin Phoenix that we had existing expertise, and then we made an intentional investment to continue to build on it,” says Ms Gallego.


Rolling out thewelcomemat Ms Gallego travelled to Taiwan when Phoenix was trying to recruit TSMC, where she found her hosts “very generous with their hospital- ity”. Phoenix has reciprocated this through its sister-city commission with Taipei, Taiwan’s capital, aimed at providing a soft landing to TSMC and fostering connections through areas such as education, sports, arts and culture. “We’ve worked with local hospitals to make


sure there are doctors who can treat people coming to our community from Taiwan in their native language,” says Ms Gallego, who adds that local restaurants are also being chal- lenged to upgrade their culinary offerings. “Everyone seems willing to roll out the wel- comemat.” With more than three-quarters of global


chipmanufacturing capacity currently concen- trated in east Asia, Ms Gallego believes that cre- ating a welcoming and tolerant innovation


58


environment with talent will be the key to shifting the needle. “We are never going to lead on low costs,


but we can lead on creativity and a strong workforce. We made sure that all of our recent FDI partners had the chance to meet with our universities and community college leaders,” she adds.


Becomingrecession-proof MsGallego says that Phoenix’s chipmaking her- itage began with Motorola, which “helped it grow as a community” through its R&D labora- tory after the second world war. This later spawned a variety of companies, including ON Semiconductor, and developed a supply chain and technical talent pool. “It’s a very complex series of ingredients


that have come together to make us a semicon- ductor hub,” saysMsGallego,whoalso points to a stable business environment and reliable renewable energy as other factors. “We’ve cre- ated an environment where, if there’s a prob- lem, there are people who are ready to solve it.” This ecosystem is part of the city’s shift in


economic development strategy. In the wake of the 2008 recession, Phoenix city leaders pivoted away from real estate reliance tomake the city’s economy more export-oriented. “We wanted to refocus towards advanced manufacturing, bio- science, healthcare and technology industries,” says Ms Gallego. Looking ahead, she believes that a focus on


people and access to education will be crucial to Phoenix’s future, while continuing efforts to green the city. “We have also had a major focus on mental


health,” she adds, highlighting how the pan- demic has made the importance of investment into this area even more clear. “Our largest new programme during my time as mayor is an investment in behavioural health and having more behavioural health units that can respond to people in need in our community,” she concludes.■


WEARE NEVER GOING TO LEADONLOWCOSTS, BUT WECANLEADONCREATIVITY


www.fDiIntelligence.com June/July 2021


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