Writer: Joshua Andino
2 min read August 2023 — Phoenix’s manufacturing sector has rebounded and positioned the region to become one of the most in-demand advanced manufacturing markets in the country.
According to a recently released report from commercial real estate service firm CBRE, “The Phoenix metro is positioned to be a prime beneficiary of U.S. production reshoring and is expected to be a strong outlier relative to the nation.” The report cites geography, climate, a skilled labor force, numerous development opportunities and modern infrastructure, alongside a favorable business climate as key factors.
“Thanks to billions of dollars’ worth of investment over the last three years, the Valley of the Sun is quickly establishing itself as a global hub for advanced manufacturing,” the report notes.
The Valley is expected to see billions of dollars of investment thanks in part to federal incentives aimed to reshore critical industries as part of the CHIPS Act passed just over a year ago. Federal officials noted earlier this month that they have received Statements of Interest from 42 different states of companies looking to manufacture semiconductors in the country.
“Phoenix has been able to stand up really tall with our speed-to-market for construction, we’ve got amazing infrastructure. A lot of these groups need a combination of heavy power and water and we have both that we’re able to bring to the table,” Jackie Orcutt, senior vice president at CBRE, told the Phoenix Business Journal.
In Phoenix, investments from global manufacturers include TSMC, Intel, LG Energy Solutions, and Kore Power, CBRE lists in its report. TSMC’s new fabrication site was heralded as an example by the Biden Administration, with the president visiting the site, as what the country – and Phoenix, could expect from the new legislation. The company invested $40 billion in what is one of the largest foreign direct investments in the country and the largest in Arizona history.
While these projects are expected to continue their development for the foreseeable future, the process of building out and hiring workers has not been straightforward. TSMC’s plant in the area has struggled to come online as a result of differences between management and local workers.
Cultural differences notwithstanding, advanced manufacturing has made its comeback across Maricopa County, with CBRE data showing the Phoenix area had approximately 150,000 manufacturing jobs through 2023, or about 6% of the region’s total available jobs. The number marks a full recovery of all jobs lost in 2020-2021 as a result of the pandemic.
Manufacturers and emerging technologies firms are clustered around four specific corridors, and include the Chandler/Price area, Deer Valley, the immediate area around Phoenix Sky Harbor International Airport and Mesa, and include a wide range of companies. In addition to the aforementioned TSMC, other firms highlighted by CBRE include hydrogen-powered truck manufacturer Nikola, healthcare consultancy firm Lucid Group, Electra Meccanica, Zero Electric Vehicles, NRS Logistics, Li-cycle and several others.
“Ongoing Investment from advanced manufacturers in the semiconductor, microelectronics, aerospace and defense, biomedical, electric and autonomous vehicles and alternative energy production will ensure Phoenix has one of the most technologically sophisticated manufacturing sectors in the U.S,” the report concludes.
For more information, please visit:
https://www.cbre.com/insights/reports/phoenix-advanced-manufacturing
