Where the CHIPS Fall: Local Labor Market Impacts of Semiconductor Mega-Investments in Maricopa County, Arizona

This paper examines the local labor market effects of mega-scale semiconductor investment, using Maricopa County, Arizona, as a case study. The county has received about $300 billion in commitments through the 2030s under the CHIPS and Science Act of 2022, the largest place based industrial investment in recent US history. Using synthetic difference-in-differences, we find large employment gains, but few of these gains occur within the manufacturing sector. Semiconductor manufacturing shows no measurable net change, as hiring at new facilities offsets reductions at existing ones. The gains instead concentrate in construction—13 to 33 percent above the synthetic counterfactual—and in supply chain sectors—5 to 46 percent above—which together represent about 9,700 and 7,100 jobs, respectively. More than 80 percent of the latter fall into wholesale trade and technical services rather than manufacturing. We attribute this composition to the high capital-to-labor ratio of semiconductor fabrication and to a scale threshold in supplier relocation.