Arizona-based Hyperion Technologies Inc. wants to fill a gap in the nation’s emerging semiconductor ecosystem.

The fledgling company has proposed a leading-edge, fully automated manufacturing plant in the Phoenix metro totaling about 600,000 square feet. The first phase of the project, likely earmarked for the West Valley, represents a $1.5 billion investment, adding to a swell of semiconductor facilities popping up throughout the region.

That facility is expected to create 1,500 direct jobs and domesticate production of advanced, high-density interconnect substrates and interconnect fabrics — “devices that are responsible for operating” semiconductor chips, said Sam Salama, CEO of Hyperion.

“If you imagine chips as pieces of Legos and you have a platform, you take these Legos and put them together to constitute the modern computing systems that are needed for AI or high-performance computing,” Salama said.

Advanced substrates are largely procured from Asian countries such as Japan, which currently produce most of these devices. “The entity to fabricate this does not exist in the United States, we are truly first of a kind,” Salama said.

Leveraging its extensive experience in the industry and its major technology partners, Hyperion expects to be the only company in the U.S. to produce these devices at scale as it grows, potentially competing on a global stage in a $600 billion industry that’s dominated by major corporations.

Hyperion is collaborating with local municipalities, the Arizona Commerce Authority and Greater Phoenix Economic Council on its project. The ACA said it continues to work closely with Hyperion on its “significant expansion project in Arizona.”

“This project represents an important addition to Arizona’s and the U.S. semiconductor supply chain and will further Arizona’s leadership in advanced packaging,” the ACA said in a statement. “We appreciate Hyperion’s commitment to Arizona.”

Hyperion has completed the design for its manufacturing building and is finalizing the factory layout. To fund the project, Salama said they have secured multiple global equity partners and are pursuing debt, along with federal and local incentives.

It’s also in the process of selecting a site within the Phoenix region for the facility, which will likely be built in the northwest part of the Valley, near Amkor Technology Inc.’s proposed packaging plant in Peoria and Taiwan Semiconductor Manufacturing Co.’s $65 billion manufacturing complex in Phoenix.

Those semiconductor projects have already attracted dozens of suppliers and spurred plans for mega developments such as the $7 billion Halo Vista surrounding TSMC and a regional airpark in Peoria. The federal government has also awarded at least $15 billionto semiconductor companies and programs in Arizona for the on-shoring of semiconductor manufacturing.

Devices will support high-power applications

The type of substrates that Hyperion manufactures will be targeted at the growing demand for high-performance computing, which processes large amounts of data at high speeds.

Hyperion’s substrates will be used to stitch together smaller integrated circuits, called chiplets, to create more powerful devices for uses in artificial intelligence and data centers, a fast-growing sector in Arizona.

“The computing power that is required to run an AI model, whether it’s for training or inference, is actually doubling now every sixth months, and one chip is not able to do that,” Salama said.

Their substrates will support high-performance computing uses in other major industries including aerospace and defense, automotive and networking and telecommunications for products like network switches or central processing units.

Tempe-based Amkor is also establishing a critical semiconductor component with its new factory in Arizona that is set to become the largest outsourced U.S. packaging plant and produce chips for TSMC and Apple Inc.

Why Hyperion chose Arizona

The Hyperion team embarked on a detailed site selection process before choosing Arizona for its project.

They started their search 2022 and considered a handful of states that are attracting semiconductors such as New York and Texas. The Grand Canyon state’s proximity to the West Coast and the San Francisco Bay Area — where the company’s potential customers are located — and its regional access in the Southwest were attractive to Hyperion.

Arizona also stood out because of its longstanding semiconductor infrastructure, as well as a growing collection of businesses here. An estimated 40 semiconductor companies have expanded in Arizona since 2020.

“There is a coherent focus in building the semiconductor ecosystem,” Salama said. “If you look at the entire nation today, the only place that is very close to having an end-to-end cluster is Arizona.”

Arizona is now home to both Intel and TSMC, but also has equipment manufacturers, material suppliers and advanced packaging and testing providers. Production of advanced substrates could be next.

“What Hyperion offers for Arizona is the ability to truly be the one and only end-to-end cluster that produces semiconductors in the entire nation,” Salama said.

Local institutions including Arizona State University are bolstering research and development of semiconductors with the support of federal dollars. The state is also taking big steps to grow the local semiconductor workforce, an effort that Hyperion wants to participate in.

Salama said Hyperion will invest $25 million in Arizona’s workforce development. That includes on the job training and $16 million earmarked for a workforce program in partnership with local community and educational institutions.

Who is Sam Salama, CEO of Hyperion?

Salama, the company’s president and CEO, has lived in Arizona since 2001.

“I think it’s a beautiful state and a beautiful place to raise a family,” he said.

He worked for one of the nation’s leading semiconductor manufacturers for nearly 20 years — Intel Corp. — before starting Hyperion in 2022.

Salama most recently served as a vice president and general manager for one of Intel’s manufacturing and supply chain divisions. He started at Intel as a research and development engineer and took on various roles in manufacturing, operations and supply chain at the company.

“I was able to get a very deep insight into the semiconductor business and the global supply chain nature of it and that actually is a very strong foundation for what I’m trying to do with Hyperion,” Salama said.

During his time at Intel, Salama traveled between offices in Arizona, California, Japan and Malaysia.expand

Born and raised in Cairo, Egypt, Salama moved to the U.S. for college and graduated with a master’s degree in materials engineering from Drexel University in Pennsylvania.

He obtained a doctorate in laser processing of semiconductor materials at the University of Central Florida and later secured degrees in finance and business administration from the University of California Berkeley.

Hyperion’s core founding team also comprises a collective 200 years of experience in various aspects of semiconductors such as software design, hardware, supply chain and factory operations, Salama said. The company’s chief financial officer, Andre Lowe, also previously worked for Intel for nearly two decades and served as director of advanced analytics until this year.

Hyperion plans to operate as an independent merchant foundry, offering its product for both commercial and defense applications.

“At the intersection of that global supply chain redefinition, the technology infliction and unprecedented growth, we found that there is a very unique business opportunity for what Hyperion is trying to do,” he said.

Although semiconductor manufacturing typically includes water intensive operations, Hyperion’s new facility is proposed to be developed with sustainability features such as reclaimed water use and a closed-loop system for recycling its water, Salama said.

Over a decade, the company expects the project to create $6.6 billion in economic output in the Valley as it builds out its facility in multiple phases.

“Our motivation and vision for Hyperion is really to build a sustainable business that’s profitable and poised for growth,” Salama said.