The Valley’s microelectronics industry sees opportunity for a market turnaround, after nearly a decade of decline in the semiconductor industry.
According to the Semiconductor Industry Association, global sales of semiconductors are on the rise with sales increasing over twenty percent and topping $400 Billion last year, making it the industry’s highest-ever annual sales.
“The semiconductor industry had a very strong year in 2017 with double digit growth that was broad-based. We saw growth in all product lines, all regions of the world and all end markets. This year, we expect that the Industrial, Automotive and IoT (Internet of Things) markets are likely to be the stronger end markets,” said Ganesh Moorthy, president and chief operating officer of Chandler-headquartered Microchip Technology Inc.
Microelectronics, the designer and manufacturer of microchips and microcircuits, is a component of semiconductors. The microelectronics industry has a large presence in greater Phoenix, with operations from legacy companies such as Intel Corporation, and ON Semiconductor and Microchip Technology.
Arizona’s industry keeps growing
Last year, publicly traded microelectronics engineering and manufacturing company Benchmark Electronics announced plans to relocate its headquarters to Tempe, Arizona from Angleton, Texas this year and expects to add approximately 500 new jobs to the Greater Phoenix area.
Benchmark Electronics’ Chief Technology Officer Jan Janick said the greater Phoenix region is the only place in the United States where there is both the necessary physical space to house the mass of a manufacturing plant as well as having a workforce with skills necessary in the design and engineering of microelectronics.
“The move to Arizona means we will have the ability to design, test prototypes, and manufacture all in one single location, which will be very convenient for our customers.” Said Janick. “That combined with the proximity to Arizona State University means will we have access to skilled talent and valuable research as well.”
Eye towards the future
“We’re already home to some big players in the microelectronics industry so as a region and state, we are positioned well to take advantage of this phenomenon of demand for microelectronics.” Said Steven Zylstra, president and CEO of the Arizona Technology Council.
According to a report by the Greater Phoenix Economic Council, microelectronics is one of four advanced industries that Valley business and government leaders want to see reinvigorating Arizona’s gross domestic product. The strategy for Arizona’s microelectronics companies is to take advantage of the emerging Internet of Things industries and rising talent from engineering graduates from Arizona State University and other colleges in the Valley, said Chris Camacho, president and CEO at Greater Phoenix Economic Council.
“More and more IoT firms will come from Phoenix so Arizona’s legacy microelectronics sector should be working with the IoT industry in transitioning to creating embedded technology in driverless cars and other connected devices,” said Camacho. “You will see more companies coming to Phoenix, and also companies going to scale by acquiring new start-ups in this industry and all that investment will be beneficial for the region’s economy.”