Greater Phoenix Projects and Progress

By Adam Bruns, Site Selection

Breaking New Ground

Projects and progress stretch across multiple industries and an entire region.

Is there a Moore’s Law for good news?

The measuring stick for the semiconductor industry posited by Intel’s Gordon Moore projected that the number of transistors in an integrated circuit (IC) would double around every two years. In the context of good news for the industry in Arizona, the pace of new investment and expansions seems more like every two months … if not two weeks or even two days.

“As the home of America’s semiconductor resurgence, Arizona continues to attract global companies in advanced industries,” said Sandra Watson, president and CEO of the Arizona Commerce Authority, in announcing record fiscal year results.

That means more than merely TSMC’s $65 billion toward three semiconductor fabs that will employ 6,000 people; Amkor’s $2 billion, 2,000-job semiconductor packaging and test services facility in Peoria; the $300 million, 500-job expansion of Dutch semiconductor company ASM’s North American HQ in Scottsdale; or Pentagon Technologies’ 300-job, $50 million semiconductor equipment cleaning facility in Mesa. It means scores of new projects, startups and partnerships across such sectors as automotive, logistics and goods movement, biosciences, climate tech, data centers, aerospace and other sectors, all against a backdrop of major infrastructure investment and an increasingly international flavor to the proceedings.

Sharon Harper, co-chair, president and CEO of The Plaza Companies and chair of GPEC’s International Leadership Counci, says the percentage of companies locating in the region that were international was 4% in 2004. Last year that percentage was 29%. “It’s amazing,” she says. “We made it happen. Leadership got out there around the world telling the story of the region’s lifestyle, opportunities and ease of doing business.”

That includes assets such as SkySong, ASU Scottsdale Innovation Center, where newly arrived firms can find the soft landing they need with, among other amenities, complimentary access for three months to premier office space and assistance from one of the largest universities in the country. SkySong is where education technology firm OneOrigin moved its HQ in 2022 and where it now employs 150 with more to come.

In June, ASU and GPEC announced a new program title, brand and benefit package for the joint program helping international companies accelerate United States growth plans, now known as the Arizona International Soft Landing Experience (AISLE). “AISLE participants are primed for success, thanks to the strategic location at Skysong, abundant GPEC resources and a thriving innovation ecosystem,” said Sally Morton, executive vice president at ASU’s Knowledge Enterprise.

In 2023, aided in part by organizations such as GPEC and StartUp AZ, startups in the region raised $1.9 billion in funding, an increase of 6% from the previous year — making Greater Phoenix one of the only large regions in the country to experience increased VC funding year-over-year. The national average was a decrease of 36% over that time frame.

Moving People, Moving Goods

Phoenix Sky Harbor International Airport, located seven minutes from downtown Phoenix, has grown its take-offs and landings too, entering the top 10 in deplanements in the nation and adding both concourses and international flights to such destinations as Paris and Tijuana. A new terminal is on the way after the airport welcomed more than 48 million passengers in 2023.

Rail and truck infrastructure is seeing its share of improvements too, as light rail expansion continues to connect assets such as the Phoenix Bioscience Core to ASU and Grand Canyon University. Meanwhile, Union Pacific has opened a new intermodal terminal and BNSF has revealed a proposal for a master-planned, 4,321-acre rail-served facility in northwest Maricopa County.

The new Union Pacific facility, opened in February 2024, includes drayage support provided by Duncan & Son Lines, a family-owned logistics firm in Buckeye, Arizona, that primarily focuses on international container drayage from the ports of Long Beach and Los Angeles. The facility is the first such intermodal service between the L.A. Basin and Phoenix and by converting truck to rail is expected to take thousands of trucks off the road per year. Keith Jones, vice president of sales for Duncan & Son Lines, tells Site Selection the launch of rail service into the Phoenix market has provided significant productivity enhancements to DSL Logistics.

“The ability to move hundreds of containers into Phoenix on one train rather than with hundreds of trucks dramatically improves efficiency,” he says in an email. “More importantly, the rail service affords some of our drivers more flexibility in scheduling and the opportunity to spend more time at home if desired as they can work locally delivering containers coming off the rail rather than making an 800 mile roundtrip journey to and from the LA/LGB Port Terminals. The added benefit of local trucking versus over the road helps DSL Logistics become an employer of choice for drivers searching for opportunities to work locally.”

More opportunities could be afoot eventually when domestic intermodal container service is introduced, he says.

Skills and Skills Programs Abound

If infrastructure is the backdrop, talent is downstage center. Groundbreaking efforts are taking place here too. In addition to the new Future48 Workforce Accelerator in partnership with Maricopa County Community Colleges to meet the needs of the semiconductor industry, the Semiconductor Technician Quick Start Program developed with that same system has certified over 900 students since launching in 2022.

Meanwhile, reinforcing new apprenticeship programs from such giants as Intel and TSMC, Arizona Governor Katie Hobbs has authorized the allocation of $4 million to further expansion of semiconductor apprenticeships. And the Arizona Commerce Authority also has invested $100 million in Arizona State University, Northern Arizona University and the University of Arizona to strengthen semiconductor infrastructure and workforce development.

Of such partnerships, no less than Brian Harrison, TSMC president, has said, “ASU’s Fulton Schools of Engineering and initiatives such as the Microelectronics Industry Council create a friendly environment for TSMC Arizona. Our partnership with ASU is crucial for creating a strong talent pipeline and has allowed us to recruit some of the best semiconductor talent in the U.S.”

Clean Tech

One climate tech company growing in the region is Amphenol Industrial Operations, a maker of interconnect systems, which is producing new solar products at a 58,000-sq.-ft. manufacturing operation in Mesa. As of early this year the facility was churning out 3,000 solar junction boxes per day with two more lines being added and other products also being produced. The operation employed 70 at the outset.

Asked why Mesa was the right location for the facility, Mark Cunningham, general manager, says, “First, it was close to several key customers. Second, Arizona had a favorable business climate, labor availability, ease of access and close proximity to our current Nogales location. And third, Amphenol has a small hub of business units set up in the Mesa area, making it easier to leverage and collaborate with other businesses already established in the area.”

Mesa will also be the home of the world’s first direct air capture (DAC) manufacturing facility from CarbonCapture Inc., which signed a lease for 83,000 sq. ft. in June. At full capacity, the facility is projected to manufacture 4,000 modules per year — equal to 2 megatons of removal capacity. “After an exhaustive nationwide search, the site was chosen due to its central location, availability of clean energy and workforce readiness,” the company said. “Critical to CarbonCapture’s decision was the extensive institutional support it received from the Greater Phoenix Economic Council, Arizona Commerce Authority, Arizona State University and Salt River Project. The facility will employ 30 full-time hires growing to an expected 400 total by 2029.”

Also investing in the area is Arizona Lithium, which in May cut the ribbon on a new Lithium Research Center in Tempe. With the capability to perform all of the processing steps for battery-grade lithium carbonate, the center will function as a technology incubator focused on the extraction of lithium from both the Prairie Project in Saskatchewan and the Big Sandy Project in Wikieup, Arizona.

In March the U.S. National Science Foundation delegation during a visit to Intel’s growing campus in Chandler announced that Ecolab, Hydrosat and the U.S. Green Building Council had joined NSF Engines: Southwest Sustainability Innovation Engine (SWSIE) led by Arizona State University. SWSIE unites academic, community, nonprofit and industry partners throughout Arizona, Nevada and Utah to establish the Southwest as a leader in carbon capture, water security and renewable energy.

Life Sciences

A recent report from CBRE found Phoenix is the second-fastest-growing market for life sciences degrees with a growth rate of 75% between 2017 and 2022. A new ASU School of Medicine and Advanced Medical Engineering in downtown Phoenix will only ratchet up those numbers, as will a new College of Medicine from Northern Arizona University, a new College of Health Sciences from the University of Arizona and a new Phoenix Medical Quarter home to a medical school from Creighton University in partnership with St. Joseph’s Hospital.

That’s just one door into the region’s surge in life sciences activity, headlined by the MDM2 consortium, a medical device initiative that was named one of the nation’s 31 Tech Hubs by the U.S. Department of Commerce.

A report from the Flinn Foundation found that bioscience industry jobs increased by 14.8% between 2020 and 2022 to 39,118; the average Arizona bioscience wage climbed by 11.5% to $84,536 in 2022 and reached $99,658 for non-hospital jobs; and a record high of $365 million in NIH grants went to Arizona institutions in 2023, a figure that increased by 29% (three times the national average) since 2020.

Also part of that ecosystem are Translational Genomics Research Institute (TGen), part of City of Hope, and the International Genomics Consortium (IGC), original founding companies on the City of Phoenix’s Phoenix Bioscience Core campus.

One company looking to take advantage of the ecosystem is Wisconsin-based Exact Sciences, the cancer detection and treatment company which currently employs more than 190 people but is looking to establish a 250,000-sq.-ft. center of excellence at Phoenix Sky Harbor Center. The company’s proposed expansion will result in more than 800 new jobs.

In north Phoenix, the anchor is Mayo Clinic, whose footprint includes its original campus in Phoenix proper established in 1987, its own Alix School of Medicine that graduated 47 students in May 2024 and Discovery Oasis, a 120-acre medical and research campus announced in 2023 in Scottsdale. Mayo Clinic has been in Arizona for 36 years, employs approximately 10,400 employees and has an annual state economic impact of $4.7 billion.

Mayo itself is part of the region’s growing international fabric. In an interview, Mayo Clinic cardiologist Dr. Steven Lester, M.D., medical director of Discovery Oasis, says his team recently has welcomed delegations from TSMC’s home country of Taiwan, Ireland, France, the Netherlands and Japan. Global firms have also been prominent in the six years of cohorts at Mayo’s MedTech Accelerator.

Lester says Mayo is part of a robust ecosystem, and cites the words of a colleague who told him, “The seeds of innovation only grow in fertile soil.” Lester and his colleagues saw small firms competing with large incumbent health care organizations and winning. “I thought, why don’t we identify these creative startups, and if they have clinical or ideological links to people in our organization, bring those companies in, connect them and work collaboratively? More of a pull strategy of innovation,” he says. “Let the companies manage the business aspects. We provide access to patients, clinical trials, data and potentially capital. We will make investments in Mayo-aligned projects. That was the birth of the medtech accelerator program.”

Mayo has invested in around half of the accelerator’s portfolio companies and seen four companies exit. Pfizer has collaborated with one of them, and another is led by the ex-CEO of Cardinal Health. Yes, Lester says, the portfolio is attracting interest from life sciences multinationals, partly to keep abreast of discovery, partly to watch for acquisition targets and partly — because research and innovation are so expensive — to outsource some of it and thereby “de-risk it a bit,” he says.

Lester says the Phoenix area is “catching up very, very quickly” to other areas when it comes to biosciences talent. “Think about it: nearly 32,000 engineering students alone at ASU. That’s a rich pool of talent,” he says, noting the equally important training resources of Maricopa County Community Colleges. “If we are building a company and need a certain type of workforce, we can go to these colleges and identify the training programs,” he says. “It’s a lot easier to get people to move across the parking lot than across the state line.”

Asked about his personal experience of life in the Phoenix region, Lester, a native Canadian who grew up in Toronto and lived in Vancouver, says he came to Arizona thinking he’d be there for a few years and then go back to Vancouver. Twenty-six years later, he uses one word to describe living in Arizona: “Easy. It’s easy to live here. The weather is great. The infrastructure is spectacular — roads, the school system, health care organizations, cultural opportunities. It’s been a wonderful place to live and raise a family.”

Looking out his window at Discovery Oasis, he observes that the highway there didn’t exist when he first arrived. “The level of growth has been remarkable, but it’s been strategic and well planned,” he says. “And very much like Canada, very few people were born and raised here.” That means networks are not hardened and closed, but open.

“People are very welcoming and embracing,” Lester says. “The community wants everybody to work together. That is one of the secret sauces to the growth in Arizona.”

Thomas Osha, executive vice president at Wexford Science + Technology and a noted global expert on life sciences districts, says small firms are leasing space at his company’s Connect Labs site in Phoenix, which he describes as “our smaller, flexible, ready-now lab product.” The facility is 85% leased, he says, including space leased by the NIH for its national diabetes and kidney research.

“Talent wise, there is a ton of talent in Phoenix,” Osha tells Site Selection’s Alexis Elmore. “The PBC [Phoenix Bioscience Core] is the only location in the state where all three of the public universities have a presence — Arizona State University, the University of Arizona and Northern Arizona University.” There is TGen. There is the Barrow Neurological Institute. And 10 minutes away is one of the largest Veterans Administration facilities in the country.

But the real engine is the proliferation of medical schools. In the past decade or so, the region has gone from zero to five.

“Imagine,” says Osha, “the research and the talent behind that.”

If recent history is any guide, you won’t have to imagine it for long.

Originally published in Site Selection Magazine's September 2024 issue.