The massive Taiwan Semiconductor Manufacturing Co. plant planned for North Phoenix seems to spark interest in corresponding investments in Arizona.
LCY Chemicals, one of the largest chemical manufacturers for semiconductor manufacturers, is considering building a factory in Arizona to supply Taiwan Semiconductor. This would expand Metro Phoenix’s growing semiconductor core, which also includes Intel, Microchip Technology, ON Semiconductor and NXP Semiconductors.
The prospective dry-cleaning facility would be the largest such facility outside of Taiwan’s society where LCY Chemicals is based, according to one Report from Nikkei Asia.
“We are actively planning this new facility in the US,” CEO Vincent Liu told the Japanese publication and expressed a desire to move the semiconductor supply chain closer to customers for various reasons.
For example, a recent shortage of semiconductors for vehicle production has created bottlenecks in automotive manufacturing. Phoenix-based ON Semiconductor, which supplies chips used by automakers, recently cited “delays in fulfilling certain customer orders due to supply chain constraints,” exacerbated by the COVID-19 pandemic, according to the company’s latest quarterly financial report.
Metro Phoenix economic development groups, including the Greater Phoenix Economic Council and the Arizona Commerce Authority, declined to comment or responded to inquiries about this article. Neither does KKR & Co., the New York-based private equity firm that LCY acquired two years ago.
Taiwan Semiconductor purchased more than 1,100 acres for $ 89 million to build the northwest Phoenix facility, which is expected to create approximately 1,900 jobs. The groundbreaking ceremony for the facility near Loop 303 and 43rd Avenue is scheduled for later this year. The company is the world’s largest specialty or contract manufacturer of semiconductors.
LCY Chemicals produces other types of chemicals in addition to plastics, rubber, copper foil, solar energy components and much more.
Shortening the supply chain
Various factory delays caused by COVID-19 shutdowns and staff infections have drawn attention to supply chain location in many industries. U.S. officials, including former President Donald Trump, have also highlighted the need to increase domestic manufacturing of components, including semiconductors.
“I’ve never seen the shift and reorganization of the supply chain in the past few decades,” Liu told Nikkei Asia, who noted that LCY’s isopropyl alcohol product is important for cleaning wafers and manufacturing equipment.
Chemicals used in advanced semiconductor manufacturing must be virtually flawless, Liu said. Locating a utility near a customer’s factory can help in this regard – and avoid the 45-day, 7,000-mile journey from Taiwan to Arizona.
Second US factory
According to the report from Nikkei Asia, plans for the proposed Arizona facility are still ongoing and the factory would take about two years to build, with possible opening in late 2023.
Liu told Nikkei Asia that his company was in close contact with government officials in Arizona and had spoken to other chemical suppliers to see if anyone was ready to collaborate on the facility. No location was given.
The article by Nikkei Asia indicated that recycling and environmental protection would be a high priority in the new factory. Recycled semiconductor chemicals can be used in other industries and applications, including coatings and construction.
LCY also has a chemical plant near Houston and in other countries including Taiwan and China.
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