Semiconductor, clean energy industries saw major wins in 2023
All eyes are on Phoenix now as major corporations make huge commitments to the market and growth perseveres on all levels in the region.
Continuing the momentum from the past few years, the Phoenix area in 2023 saw another influx of advanced manufacturers, distributors and new headquarters announced for locations across the Valley, including a steady flow of companies moving out of California and into Arizona.
The greater Phoenix area saw 31 companies move to the Valley in 2023 for more than 4,100 phase-one jobs, 3.7 million square feet of space and $7 billion in investments, according to data compiled by the Greater Phoenix Economic Council.
Chris Camacho, president and CEO of GPEC, said inflation in Phoenix has started to come back down since reaching a peak in 2022 at 13%. Job creation in the Phoenix area also chugged along in 2023 and is expected to see a 2.2% growth in 2024, he said.
“A large part of that is because we’re just seeing much more economic diversity than we’ve seen in past cycles,” Camacho told the Business Journal.
Global brands in prominent technology industries made international headlines this year with announcements for some of the biggest investments in the state’s history, including tech giants LG Energy Solution, AMS and Amkor.
In addition to local leaders visiting companies in Taiwan, South Korea and Japan, large delegations of businesses from across Asia and the Netherlands were hosted by GPEC in Arizona for further business attraction and promotion.
The biomedical sector also continued to show resiliency throughout 2023, Camacho said, with major health care companies such as Mayo Clinic, Barrow Neurological Institute, Banner Health and more unveiling major announcements.
“We’re one of the top bioscience job-growth markets,” Camacho added. “We’re seeing health care jobs continue to evolve in clinical, diagnostics, regenerative medicine — there’s just a lot of excitement in our bio future.”
Camacho said he expects to see ongoing announcements in 2024 from companies in the semiconductor and clean energy sectors thanks to federal legislation with billions of dollars to incentivize the growth of supply chains and manufacturing domestically.
“You’re going to see Phoenix in the next five years evolve as one of the top clean tech hubs — we’re seeing the early stage formation of that,” he said.
This year, Phoenix started the process to become a federally designated technology hub focused on medical devices and was named a workforce hub by the White House with a focus on manufacturing jobs.
Alongside the growth, Arizona business leaders will also be working to combat some of the negative messaging around the state’s water supply, housing shortages, affordability and labor concerns that also made national headlines in 2023.
“We’re in a vastly different position than we were 20 years ago in terms of technical talent and STEM,” Camacho said.
As for office, Camacho said he’s also hopeful to see a rebound in the sector as companies reevaluate their space needs and the sector works to recover from the Covid-19 pandemic.
“They’re either growing into new space or they’re in this reassessment process determining they need different kinds of space to meet their employee needs,” Camacho said.
Companies that moved to the area in 2023 included Olam Nuts for a 268,872-square-foot facility in Phoenix; Custom Control Sensors for a new 55,000-square-foot headquarters in Phoenix; and others such as TriColor Auto, FM Industries and Wedgewood Pharmacy.
The year’s top announcements
Here are some of the most prominent economic development announcements made in 2023:
• South Korea-based LG Energy Solution announced that it will triple its investment for a pair of new battery manufacturing plants in Queen Creek, just south of Phoenix. The massive facility will represent an investment of $5.5 billion, create 3,700 jobs at full build out and comprise 1.4 million square feet. The factories will serve as a key production hub for cylindrical batteries in North America, according to LGES.
• In one of the most significant announcements of 2023, Tempe-based Amkor Technology Inc. plans to invest $2 billion and create 2,000 new jobs for a new advanced packaging and testing facility for semiconductors in Peoria. The new facility will package Apple Inc. chips made at the Taiwan Semiconductor Manufacturing Co. plant in north Phoenix.
• Google revealed its plans earlier this year for a major data center campus in Mesa, representing a $600 million investment from the company. The first phase will comprise a 288,530-square-foot data center building and is expected to create 1,200 construction jobs. The first phase is expected to be completed by early 2025.
• Dutch semiconductor equipment supplier ASM International said it will invest $300 million for a new headquarters and research and development facility in Scottsdale with plans to create 500 new jobs for the Valley. It plans to build a 250,000-square-foot headquarters, which will be its largest research and development facility out of its seven global facilities.
• Scottsdale-based Discount Tire Co. chose a vacant site near the Loop 101 and State Route 51 for a new $200 million office headquarters in Phoenix that could total 600,000 square feet at full build-out. The first phase will total about 300,000 square feet while the overall project is expected to create or retain 1,100 jobs.
• Phoenix-based Republic Services Inc. plans to build a new 240,000-square-foot office campus at the master-planned CityNorth in Phoenix adjacent to Desert Ridge Marketplace. The environmental services company, which will move out of its existing HQ in Phoenix, plans to create 600 new jobs over 15 years at the new campus in addition to 1,000 existing jobs.
• Rehrig Pacific Co., a reusable container manufacturer, decided to relocate its Los Angeles headquarters to a new manufacturing plant in Buckeye with plans to create 100 new jobs. Rehrig started construction on its new factory, which will be 260,000 square feet with room to expand up to 500,000 square feet at 8283 S. Turner Road.