Arizona welcomes semiconductor boom amid surging global chip demand – The Business Journals
The centrality of microchips, also known as semiconductors, to all things technology has placed it at the forefront of government and industry agendas around the globe in an unprecedented way. Amidst this tech race, Arizona has received significant attention.
The world’s latest technologies, such as electric vehicles, medical devices, and AI, all have one thing in common – microchips. Any device that can be turned on and off likely contains a microchip, and in some cases dozens or even hundreds.
The centrality of microchips, also known as semiconductors, to all things technology has placed it at the forefront of government and industry agendas around the globe in an unprecedented way. Amidst this tech race, Arizona has received significant attention.
Over the past three years, Arizona has attracted more than 33 semiconductor industry expansions, representing more than 13,000 jobs and over $64.97 billion in investment. The state leads the nation in recent jobs, investment, and suppliers added in the semiconductor industry.
“Everywhere you turn, semiconductors are a driver behind technologies that folks are really excited about,” said Joe Stockunas, president of SEMI Americas, one of the leading trade groups representing the semiconductor industry.
Stockunas has been in the semiconductor business since the mid-1980s and has witnessed the industry’s many transformations over the last four decades. When his career began, Stockunas said the U.S. boasted a share of 35% in semiconductor manufacturing, a percentage that has dropped to 12% as manufacturing pivoted to Asia starting in the 1990s.
“For 22 years I was one of United Airlines’ best customers,” Stockunas joked. As chip production increasingly shifted to Asia, especially Taiwan, Stockunas often found himself conducting business overseas.
These days, he’s been making quite a few business trips to Arizona. For a stretch in late 2023, Stockunas said he was traveling to the Grand Canyon State at least once a month for a major announcement or ribbon-cutting ceremony, listing ASM, EMD Electronics, Edwards and Yield Engineering Systems among his engagements.
Recently, Stockunas decided to bring his industry’s largest trade show to Phoenix. SEMICON West, a fixture of the Bay Area for over 50 years, will now be held at the Phoenix Convention Center on a rotating basis beginning in 2025.
“That’s a direct reflection of how the industry has developed so substantially in the state of Arizona,” Stockunas said of the move. According to Stockunas, Arizona isn’t just seeing investments in the base of device manufacturers, but across the entire semiconductor supply chain.
Stockunas is confident that the industry will only grow in the coming years.
In 2020, global sales of semiconductors topped $400 billion — a number that swelled to almost $575 billion by 2022. Experts predict that by 2030, semiconductors will be a trillion-dollar industry.
Arizona’s isn’t just a place where chips are made, it’s also a center of innovation.
Scottsdale-based Ambature, Inc. recently announced a major breakthrough in its microchip technology. According to CEO Ron Kelly, Ambature has successfully integrated its patented technology with silicon, the material most microchips are made from.
“We build our piece of the puzzle with our ‘secret sauce’ on top of a silicon wafer,” Kelly said. This is big news for two reasons: first, successfully integrating Ambature’s technology with silicon will make it possible for existing microchip manufacturers to work with their technology. Second, Ambature’s tech will help “facilitate one of the key strategies under the CHIPS Act called the chiplet,” Kelly said.
“We’re coming at integration with silicon from two ways,” he continued. “Building on the silicon substrate, and then actually building a chiplet, which can be vertical wafer bonded or glued onto a typical silicon substrate.”
Kelly is also optimistic about the trajectory of Arizona’s semiconductor ecosystem.
“I’m thrilled that we’re here…We get to take advantage of having all these foundries around us, all this expertise,” Kelly said. “We have nowhere to go but up.”
A leading driver of growth in Kelly’s view is the aforementioned CHIPS Act, a $53 billion federal program aimed at reshoring semiconductor production.
The CHIPS Act, along with Arizona’s supportive environment for advanced manufacturing and technology, sparked the largest foreign investment in Arizona’s history. TSMC, the world’s biggest semiconductor manufacturer, expanded its footprint in north Phoenix from $12 billion to around $40 billion in late 2022.
“They could have done it anywhere, and they chose Arizona,” Stockunas said of the TSMC expansion.
© 2024 American City Business Journals. All rights reserved. Use of and/or registration on any portion of this site constitutes acceptance of our User Agreement (updated April 19, 2024) and Privacy Policy (updated December 19, 2023). The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of American City Business Journals.
