My View: This Arizona industry makes something small. But it’s really big.
Remember the transistor radio? I do. (No cracks about how old I am.)
My radio was the best. I still clearly hear the first song coming from it: “I’m Henry The VIII, I Am” by Herman’s Hermits.
Even to a child, the word “transistor” triggered visions of something different as something so small held the promise of taking us into the future.
Little did we realize at the time this actually signaled that big things can come in small packages. Who would argue that we now believe this to be true of the transistor’s descendent: the semiconductor? The “chip,” as it often is called, has become something upon which the modern world relies.
Consider what appeared in Forbes recently: Higher digitization following Covid-19, the 5G upgrade cycle in the wireless market, and the need for more advanced chips for applications such as AI and machine learning, and cloud computing are big levers of semiconductor demand growth.
There’s that word “big” again. And this from Time: The $550 billion firm today controls more than half the global market for made-to-order chips and has an even tighter stranglehold on the most advanced processors, with more than 90% of market share by some estimates.
Semiconductor hub
That last paragraph appeared in a profile about Taiwan Semiconductor Manufacturing Company. If you don’t know that name, or TSMC as others call it, you will. Part of the reason is the company is spending $12 billion to build a factory, or fab, in north Phoenix.
TSMC is the latest chapter in Arizona’s ascent to become the place for new semiconductor investments. Across the Valley in Chandler, Intel — whose first Arizona manufacturing facility went online in 1980 — is adding another two fabs to its Ocotillo campus at a cost of $20 billion.
And let’s not forget the other success stories in the semiconductor sector here. Microchip, Onsemi, NXP and Benchmark Electronics are just some of the companies making their own mark. Arizona places third in the nation with 107 semiconductor establishments operating here, according to the Semiconductor Industry Association. Add to that our being No. 2 when it comes to chip exports, reaching a value of $3.5 billion.
Wages of more than $8 billion earned in Arizona by more than 22,000 employees on the job ranks us fourth in the nation when it comes to semiconductor manufacturing. Keep in mind that Intel’s two new fabs will add 3,000 workers while TSMC will put 1,600 employees on the payroll here.
Another signal that our state has arrived is that semiconductor manufacturers are counting on finding much of their talent here. One of the reasons is the new Certificate in Semiconductor Processing program offered by the Ira A. Fulton Schools of Engineering at Arizona State University. The graduate-level course provides professional training in different aspects of chip production.
By now, you might be wondering how does this guy know all of this? While my role leaves me pretty well-versed in developments by this industry, I admit that I just finished reading the latest issue of TechConnect, the digital magazine published by the Arizona Technology Council and Arizona Commerce Authority. I invite you to go online and read more about what is happening here when it comes to chips.
Whether you or your family members become part of this industry, or you all just enjoy the fruits of its labor, know that Arizona will be part of something big for years to come.
Steve Zylstra is president and CEO of the Arizona Technology Council.