Gov. Katie Hobbs hosted a reception in Taipei, Taiwan, on Tuesday to celebrate the launch of Arizona’s new Taiwan trade office. The office, which opened in March in Taipei and falls under the purview of the Arizona Commerce Authority, will work to increase Taiwanese business investment in the state.
“Arizona is entering a new era of economic growth, and our success is underwritten largely by our relationships abroad,” Hobbs told the audience of more than 100 attendees, many of whom were from the island nation’s business, government and education sectors.
The event was a stop on Hobbs’ eight-day trip to Taiwan and South Korea to bolster government ties and attract business partnerships. Arizona already has won major investments from the two nations in recent years. Computer chipmaker Taiwan Semiconductor Manufacturing Co. and South Korean battery maker LG Energy Solution currently are building factories in the Grand Canyon State.
Arizona isn’t the only U.S. state vying for Taiwanese investment. In the past three years, the number of state offices in Taiwan has grown from seven to 15, with four more in the works, according to the American State Offices Association in Taiwan.
Just hours before the reception for Arizona’s trade office, Virginia announced the opening of a Taiwan trade office of its own.
Arizona No. 1 for foreign investment
Taiwan started making headlines in Arizona in 2020 when TSMC, the world’s largest chipmaker, unveiled plans to open a factory in north Phoenix. Two years later, the tech giant announced it would open a second factory in the region. Together, the plants amount to a $40 billion investment, the largest foreign direct investment in Arizona’s history, according to TSMC.
Since TSMC’s initial announcement, more than 20 semiconductor companies and suppliers, including six from Taiwan, have announced plans to join it in Arizona or expand already-existing operations in the state.
Arizona currently ranks as the No.1 state for overall foreign direct capital investment, according to the trade magazine Business Facilities.
Trade between Arizona and Taiwan alone has grown by more than 200% since 2017, totaling more than $3 billion in 2022, according to the Arizona Commerce Authority.
Hobbs cited Arizona’s highly skilled workforce, low-cost business environment, transportation infrastructure and proximity to global markets as reasons why the state has attracted so much foreign investment in recent years.
Challenges with TSMC plants, Arizona’s growth persist
While more Taiwanese companies are considering setting up shop in Arizona, many are closely watching TSMC’s move to see if it pays off.
The corporation’s pricey Arizona expansion is already facing obstacles. The company delayed the first factory opening from 2024 until 2025, citing a shortage of specialized workers, and is now looking to bring 500 Taiwanese workers to Arizona to complete the project. Meanwhile, unionized workers in Arizona have criticized that decision and are campaigning for the Taiwanese workers to be barred from working on the plant.
Arizona also has faced challenges associated with its rapid growth in recent years, including skyrocketing housing costs and overflowing schools.
When asked whether an influx of Taiwanese companies could exacerbate those pre-existing issues and potentially push Arizonans out, Hobbs said that’s not a concern. She noted that the bulk of the jobs being created by TSMC and others are well-paying jobs for Arizonans.
The investments between Taiwan and Arizona are “mutually beneficial to both of our economies,” she said. “So we’re making sure that Arizonans are seeing the benefit.”