The technology industry in Arizona is energized and growing! Every year — more accurately, every month — we are hearing about and seeing major activity from big investments to new startups and everything in between. Arizona has also become a hub for several key technology sectors such as semiconductor and advanced manufacturing. The state also continues to build on its legacy industries such as aerospace and defense.

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As we look ahead, the technology sector is also paying close attention to industry happenings that will set the pace for the next decade and beyond. Specifically, in this article I’d like to cover some game-changing sectors and activities happening across the Valley that will have a major impact on Arizona and the nation.

These industries include generative AI, which is the current technology hot topic. In fact, a few Arizona companies are already playing key roles. There’s also the explosion of semiconductors and advanced manufacturing in the Valley. I would be remiss not to also cover a few public policy initiatives that could change the future of Arizona’s technology industry.

Generative AI

It’s no surprise that generative AI (GenAI) is hot, and it probably will be for at least the next 10 years. Industries and companies everywhere are working to identify ways to use and understand the power of GenAI and programs like ChatGPT to enhance their products, services and productivity. The Arizona Technology Council and its members have been closely following the explosion of this innovation and also have an AI Committee dedicated to staying informed on all things AI.

A relatively new Arizona-based company, Synapse Labs, is also taking on the challenge of helping companies adopt AI, as well as big data and machine learning, into their workflow. The company offers an expert team with more than 40 collective years of experience and more than 25 AI patents. Companies like Synapse Labs will provide a crucial service as the use cases and power of generative AI continue to grow and expand. Especially with Synapse Labs citing the PwC’s Global artificial intelligence study that says that GenAI can inject a staggering $15.7 trillion to the global economy by 2030.

Semiconductor and Advanced Manufacturing

The semiconductor industry is generating the type of impact here in Arizona that GenAI is making globally. Due to Arizona’s technology-friendly business climate and the Biden Administration’s CHIPS and Science Act funding, our state has become the center of semiconductor manufacturing in the U.S.

The projects of two major companies — Taiwan Semiconductor Manufacturing Company (TSMC) and Intel — are making national headlines almost daily here in the Valley. TSMC has committed a $40 billion investment and is in the process of building two chip manufacturing facilities. These facilities will create 4,500 direct high-tech, high wage jobs, with more than 1,000 hired to date. There are also estimates of more than 13,000 jobs being created at supplier companies.

The other major player making significant investments is long-time Arizona resident Intel. The company has committed to a $20 billion investment to build its new facility in Chandler. Intel officials have stated this investment will bring 9,000 new jobs to Arizona. The Biden administration also recently announced that Intel will receive $8.5 billion for projects here and other states through the CHIPS Act.

The projects of the two companies here are monumental wins for Arizona in the near term, but looking long-term, we expect Arizona to continue growing as the nation’s largest hub for semiconductor investment and activity as thousands of suppliers for both companies flock to the Valley.

Outside the semiconductor industry, there are several other advanced manufacturing investments shaping Arizona’s technology future. Specifically, these investments are found in the clean energy and e-mobility space. Four companies in this sector — LG, which is making a $5.5 billion investment to build two facilities in Queen Creek, and KORE Power, which is making $1.25 billion investment, recently received an $850 million loan from the DOE and has committed to offering 3,000 jobs at its 1.8 million square-foot facility in Buckeye. Sion Power and American Battery Factory also just announced major investments in the form of new factories and expansions.

American Battery in particular just broke ground on a 2 million-square-foot gigafactory in Tucson. The site will provide an estimated 1,000 jobs, $1.2 billion in capital investment and $3.1 billion in economic impact to the state while speeding the growth of the clean energy economy nationwide.

This acceleration of semiconductor and advanced manufacturing activity continues to set Arizona up for a bright future in multiple innovative technologies that will only continue to grow.

Public Policy

Finally, there are two key initiatives in the realm of public policy that are critical to Arizona’s technological future: ensuring the continuation of the Arizona Commerce Authority (ACA) and improving access to STEM-related education opportunities. These are two activities that the Council, alongside our members, are working hard to push forward.

The ACA’s continuation is critical to Arizona’s technology industry, as well as to our state’s economic development. The ACA and its CEO, Sandra Watson, have been among the state’s most important assets in driving technology companies to Arizona. The organization was key to helping TSMC choose Arizona for its new facility, and countless other technology companies could tell the same story. The ACA’s continuation will ensure constant effort to drive technology leaders to our state. Fortunately, a four-year extension for the ACA has made it through the House and the Council will continue to advocate for the extension until a decision on the legislation is reached.

In the early stages is an initiative advocating computer science to be a requirement at schools K through 12. As the technology industry grows — especially in information technology and cybersecurity — it is critical that students gain exposure to more STEM-based educational opportunities, including computer science. Today, no requirement exists to teach computer science and only 36% of high schools offer the subject to their students. The Council and its Public Policy Committee are working to ultimately run a bill requiring computer science be taught in high schools across Arizona, as well as providing the necessary funds to train teachers to teach these classes.

Both public policy initiatives will have major positive implications on the future of our technology growth and workforce development in Arizona.

While Arizona’s innovation ecosystem is buzzing with other activity and numerous updates I could call out, I believe these are some of the most significant game changers to our state’s technology sector.

Author: Steven G. Zylstra is the president and CEO of the Arizona Technology Council.