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

Annie Liu and Pinghui Wu

No 26-12, Working Papers from Federal Reserve Bank of Boston

Abstract: 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.

Keywords: CHIPS and Science Act; place-based policies; Semiconductor industry (search for similar items in EconPapers)
JEL-codes: L63 R11 R58 (search for similar items in EconPapers)
Pages: 35
Date: 2026-08-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bostonfed.org/publications/research-de ... ega-investments.aspx Summary (text/html)
https://www.bostonfed.org/-/media/Documents/Workingpapers/PDF/2026/WP2612.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbwp:103718

Ordering information: This working paper can be ordered from

DOI: 10.29412/res.wp.2026.12

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().