➤ Phoenix Mayor Kate Gallego is focused on bioscience, semiconductors and sustainable tech as pillars of her economic agenda.

➤ Phoenix is leveraging relationships with international partners such as TSMC and Amkor to grow the semiconductor industry in the region.

➤ Boosting chip production is a bipartisan effort in Phoenix that Gallego expects to continue under President Donald Trump.

Phoenix, the fifth-largest US city, is working to establish itself as a hub for innovative technology, advanced manufacturing, bioscience and aerospace. The city is home to Taiwan Semiconductor Manufacturing Co. Ltd.'s most advanced US fabrication plant, which began producing 4-nanometer chips in January 2025. City officials are touting an influx of semiconductor and biotech manufacturing as a return to the roots underpinning its economic prosperity after World War II, when Phoenix experienced an economic boom from its aerospace and defense industrial manufacturing base, led by companies like Honeywell International Inc.

Looking to attract new talent and showcase local businesses, Phoenix Mayor Kate Gallego recently attended CES 2025, the Consumer Technology Association's annual trade show. S&P Global Market Intelligence spoke to Gallego at the event about how the city is betting big on tech.

What follows is an edited transcript of MI's conversation with Gallego at CES.

S&P Global Market Intelligence: The arrival of TSMC in Phoenix has been hailed as a success, and already, we've seen 4-nanometer chips on par with those being made at the company's flagship fab. What did it take to make that happen, and why are chips so important to the economy of Arizona?

Martin Diamond, founder of Phoenix-based startup PawPort, and Kate Gallego, mayor of Phoenix, at CES 2025. Source: City of Phoenix.

Kate Gallego: I worked in economic development and innovation before I ran for mayor, and I really wanted to focus on diversifying the economy. We have an excellent real estate sector, and I want that always to be true. But we need several areas of excellence, so I have focused a lot on three areas: semiconductors, health/bioscience and sustainable tech.

My first international trip as mayor was to Taiwan to recruit TSMC. I played a small role in Intel Corp.'s expansion and knew what great infrastructure we had around semiconductors with multiple leadership companies and a higher education system that really has expertise in semiconductors. We have reliable weather and reliable power, and that also helps make us really competitive. As you and I are sitting here, much of the country has been affected by terrible snowstorms — that's not a challenge for us. There was recently a significant earthquake, and that's not a challenge that impacts our manufacturing. So we're really well-positioned, and that's one of the reasons I wanted to make a big bet on semiconductors. But we are unified in Arizona — from school boards to state government — in pursuing the innovation economy, and that's helped us be very competitive.

The CHIPS Act was one of the signature achievements of the Biden Administration. TSMC has been promised $6.6 billion in federal grants as part of a $65 billion project in Phoenix featuring the production of current-generation chips. As we're transitioning to a new administration now, how do you try to carry some of that momentum forward?

In Arizona, the chips economy has been very bipartisan, and I suspect it will continue to be. TSMC was located in Phoenix during the first Trump administration with support from the federal government. So we think that should continue. The national security concerns and the supply chain concerns are still very real. We need leading-edge manufacturing in the United States. Taiwan has an incredible record, but it's better for the global economy if these essential products are made in multiple jurisdictions.

[Editor's note: As of Jan. 28, the White House paused all federal loans and grants amid a review of spending.]

Diversification — that shift toward friend-shoring or reshoring — has been a theme of our semiconductor coverage. Can you tell us how South Korean companies in Arizona fit into the broader sphere of Asian allies and what that relationship means for the local economy?

We have incredible partnerships in Arizona with South Korea across multiple sectors. Amkor Technology Inc. [which designs, packages and tests integrated circuits for chip manufacturers] has long had a presence between America and Korea, but they just made an additional $2 billion commitment in our region. LG Electronics Inc. looked all around the country and felt the Greater Phoenix area was right for their manufacturing facility.

It's not just the big companies, as well. One of my personal favorites is Pablo Air Co. Ltd., which is a drone company. So, if you ever have a major celebration where instead of fireworks, you want drone lighting, Pablo Air is a leader in that, and they're based in Incheon, South Korea, but their US headquarters is in Phoenix.

What is the most interesting thing that you've seen so far here at CES?

To me, the progress in health technology has been incredible. From your home, you can get all the information about your own health that used to require a doctor's visit. One of the great companies we brought from Phoenix with our delegation is Mii Health [an AI health assistant]. They have a partnership with Mayo Clinic, one of our top healthcare providers in the country, to get people home and out of the hospital sooner. They put a lot of sensors in the home so that your care team can understand how well you're doing. For older adults, they want to be at home and not in a hospital situation, so Mii Health is helping with that. There are advanced analytics that are portable and can really tell you what you're doing. I just learned that scales may be able to predict if you're taking on water and might have a heart episode.

The Smartec Products LLC PawPort is also very cool. So, your dog can wear a collar, and the smart dog door will trigger. I went down to their booth and got to use a sledgehammer on the door, and I could not break it. So it's very secure. And in Arizona, we have more acres of parks in Phoenix than any other city in the US, so there's a lot of wildlife, and making sure your dog can go in and out — but not coyotes — can be a real pain point. So I love that PawPort technology.

Is there anything else that you wanted to highlight about 2025 and beyond in terms of tech and Phoenix?

One of the things I love about our tech ecosystem is that our companies are willing to help each other. It feels like the type of environment where everyone rises together, and it's not as competitive. We also hear from our employers that employees tend to stay longer and that they're not jumping to the next equity deal or small raise, that people really commit to companies. I think that's been part of our secret sauce as well. And then, I feel very lucky — I have an MBA in entrepreneurship and a city council that has an innovation and entrepreneurship background, as well. I think that quality in our elected leaders has helped us support the success of our ecosystem, and then having the most innovative university in our backyard, Arizona State University.