As you drive along Interstate 17 in North Phoenix, the large site for TSMC's semiconductor factory catches your eye. It has been a few years since the Arizona state government and local chambers of commerce began referring to this area as the Silicon Desert, and during that time, the development of surrounding commercial and residential areas has noticeably increased. Every time I pass the construction site, I naturally wonder what this area will look like in ten years.

The population of the Phoenix metropolitan area has been growing at an annual rate of around 1.5% in recent years. However, it is projected that after 2027, the growth rate will slow to about 1.4%, which is interpreted as a result of rising housing prices and water resource constraints. It seems that a significant portion of the incoming population still comes from states with high living costs like California and Illinois, and there is a steady number of households choosing Arizona as their retirement destination. However, compared to the explosive net inflow seen right after the COVID-19 pandemic, the flow has definitely calmed down in recent years.

In terms of industrial foundation, the semiconductor cluster known for TSMC's large-scale investment stands out the most. With the successive investments from partner companies, related manufacturing jobs are gradually increasing. The data center industry is also trending towards the Phoenix area, where the power infrastructure is relatively stable, and the healthcare and logistics sectors continue to hire steadily. There are also noticeable cases of companies moving back-office functions like banking and insurance to Phoenix, as the perception of the city as one with low living costs and a skilled workforce seems to positively influence business attraction.

However, Arizona's recent unemployment rate has been reported to have slightly risen to around 4.8%, and the job growth rate in the Phoenix area is showing a gradual recovery, from 0.3% in 2025 to 0.7% in 2026. While wages are increasing, the hiring pace is slow, indicating that the labor market is in a transitional phase toward finding balance. The fact that income growth rates are above the national average can be seen as a positive sign, and it is understood that high-skilled jobs related to semiconductors are forming relatively high wage levels.

In terms of infrastructure, the Valley Metro light rail expansion and Sky Harbor International Airport terminal improvement projects are underway, and there are discussions about large-scale mixed-use development plans near the TSMC site. Once these projects are completed, the employment creation effects may gradually appear over the years. There are also regional water resource management plans being discussed to address water supply issues, which need to be monitored as variables in assessing long-term growth sustainability. The increase in power demand due to data center expansions is also mentioned as a challenge that the utility industry needs to address.

Various institutions dealing with long-term forecasts often classify Phoenix as an emerging growth city centered on semiconductors and advanced manufacturing. However, there is also a perspective that highlights the structural variable of water resource constraints, suggesting that a balanced approach that maintains both optimism and caution is necessary. In several surveys ranking areas by population inflow, Arizona consistently ranks high, but rather than focusing solely on the ranking, it is more helpful to consider the income levels and settlement sustainability of the incoming population for practical judgment.

From the perspective of Korean households, the rental demand in areas near the semiconductor cluster, such as Chandler, Gilbert, and Scottsdale, is expected to remain steady. However, with new supply also increasing, it is likely to show a gradual upward trend rather than a sharp rise in short-term prices. If considering rental income investments, it is safer to evaluate school districts and commuting distances, and prioritizing areas with established infrastructure over new developments is also a strategy. For households considering long-term residence, it is practical to plan budgets while taking into account the rising living costs due to summer heat.

Ultimately, Phoenix is a city with clear growth axes in semiconductors and data centers. However, structural risks such as water shortages and housing supply burdens also exist, so the extent to which industrial diversification takes root over the ten-year timeline will likely determine the sustainability of growth.