Phoenix, Arizona’s largest city, has quietly transformed into a thriving innovation hub over several decades. While known for its golf courses, Major League Baseball’s Spring Training, and retirement appeal, the city has become a significant center for semiconductor manufacturing and testing of self-driving cars and drones.
According to Anne Hoecker, global head of technology at Bain Global, cities that become important technology hubs typically have four key elements: a favorable business environment, an ecosystem of other companies, close proximity to a university with a strong engineering program, and availability of talent. Phoenix meets all these criteria, making it an attractive location for tech companies.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading advanced chip manufacturer, has pledged to invest $65 billion in the greater Phoenix area. This investment is expected to create around 62,000 jobs once the associated science and technology park is complete. The park is designed to support TSMC’s smaller suppliers by providing them with rentable space and infrastructure.
The city is also a hub for autonomous vehicle testing. Companies like Uber, Cruise, and Alphabet’s Waymo have chosen Phoenix due to its favorable infrastructure, including gridded streets and consistent weather. Arizona’s welcoming policy towards self-driving technology, supported by former Governor Doug Ducey’s executive orders reducing regulatory barriers, has further encouraged this development. Waymo’s robotaxi service now operates across 315 square miles in the city.
Drone technology is another area where Phoenix is making significant strides. Amazon received regulatory approval to launch its Prime Air drone program in Tolleson, a Phoenix suburb, with plans to scale deliveries to 500 million per year. The company reports that thousands of packages have already been delivered successfully.
As David Carbon, vice president and general manager of Amazon Prime Air, noted, “This is just the beginning” of Amazon’s drone delivery expansion, with more developments expected in 2025. Phoenix’s emergence as a tech hub is a result of its strategic advantages, business-friendly environment, and the presence of major technology companies.
