ASU Spearheads Revitalization of State’s Microelectronics Industry

It’s not only a famous line from Ernest Hemingway’s novel “The Sun Also Rises,” it’s an apt description of how Arizona has transitioned from an economy based on its historical “5 C’s” to one centered on a sustainable high-tech industry.

A transformation fueled by Arizona State University.

In 1949, when Motorola opened its first research and development center in Phoenix, ASU did not yet exist; it was Arizona State College. By 1958, a university was born — and with it, the School of Engineering. In those same years, the transistor era emerged and the American semiconductor industry took off, including roots here in the Valley.

The industry grew through the 1960s and ’70s with Arizona companies making a contribution, but by the mid-1980s, Japan had overtaken the U.S. as the world’s top semiconductor producer. Although the U.S. regained market share in the 1990s, the industry had gone global.

Research and innovation continued to be strengths of the American market, but competition and economic incentives had driven manufacturing overseas. ASU’s School of Engineering enjoyed steady growth in these years, increasing enrollment and broadening its scope to meet demand and match opportunity.

As the industry developed, occasional chip shortages were part of the landscape. But as the dependence grew on microchips for consumer goods, the impact of supply chain disruptions grew with it.

Then the COVID-19 pandemic — combined with geopolitical factors — changed everything.

Suddenly there were critical shortages leading to lengthy backlogs for electronics used in smartphones, computers, cars and even home appliances. The wider public was aware, perhaps for the first time, just how precarious the semiconductor chips supply was.

The microchip gap became a national priority, not only for commercial purposes but as a matter of national security.

The CHIPS and Science Act was born, authorized during the Trump administration in 2020 and funded during the Biden administration through bipartisan congressional action in 2022.

ASU was prepared to be a player.

“The world that we’re building is not the world we are coming out of. Microchips are now going to be the rough equivalency of electricity — or water,” ASU President Michael Crow said. “Arizona State University is a national service university, built to accelerate positive outcomes through the integration of cutting-edge technological innovation and to be responsive in moments like this that call upon us to work collaboratively to pursue goals in the vital interest of our country.”

The university’s preparation came through many endeavors:

• Growing the Ira A. Fulton Schools of Engineering.
• Helping to inform state and federal public policy to create strategy that will re-establish the domestic semiconductor industry, resulting in Arizona’s New Economy initiative and America’s CHIPS and Science Act.
• Developing Science and Technology Centers for collaboration with the private sector.
• Re-inventing a Motorola R&D facility as the MacroTechnology Works facility at ASU Research Park, a home for collaboration between the private sector and academia, and a way to bridge the so-called “Valley of Death” — the phase between research and implementation or commercialization where technology often fails to launch to market.
• Expanding and deepening partnerships with semiconductor industry companies investing in Arizona.
• Working with local leadership to attract new industry investment and locations in Arizona, which resulted in TSMC choosing Phoenix as the location for its first American manufacturing plant.
• Opening a School of Manufacturing Systems and Networks as part of the Fulton Schools of Engineering, for greater focus on producing the workforce needed for domestic semiconductor manufacturing.
• Leading one of eight Department of Defense Microelectronics Commons innovation hubs — the Southwest Advanced Prototyping Hub — to develop microelectronics critical for the next generation of defense systems that will keep America safe.
• Partnering with the U.S. Department of State on a new initiative to bolster semiconductor manufacturing in the Americas and Indo-Pacific, a “near-shoring” strategy under the CHIPS Act to create a more resilient supply chain for U.S. semiconductor manufacturers.

Industry and community leaders agree that the contributions from ASU have been central to the success the state of Arizona has achieved in building its semiconductor industry. Arizona now leads the nation in recent private-sector semiconductor investments with $64 billion since 2021.

Economic impact and public policy consultant Jim Rounds, who has argued for greater investment in higher education to drive economic opportunity in Arizona, characterizes the impact as the equivalent of landing the Super Bowl — 10 times, every year.

“We’re a hot spot for semiconductor manufacturing,” Rounds said. “If we continue to expand, even if we just maintain the current pace …  the numbers are staggering.  When somebody says a billion dollars, it’s hard to relate to. But just for context, for every thousand workers in semiconductor manufacturing, that generates tax revenue equivalent to a Super Bowl. And we’re not talking about a thousand, we’re talking about tens of thousands.”

Sandra Watson, president and CEO of the Arizona Commerce Authority, said Arizona’s efforts to revitalize the microelectronics industry began after the Great Recession of 2008, with state leadership aggressively promoting Arizona to relevant industry leaders around the world. That outreach included a trip she and other local economic development representatives took to Taiwan in 2013, which initiated discussions with TSMC about why Arizona deserved serious consideration if the company were ever to establish its first factory outside of Taiwan.

“Arizona is establishing itself as the epicenter of America’s semiconductor industry, and our universities are key to making that happen,” Watson said. “So, we are very fortunate to have Arizona State University to help advance microelectronics in our state, and we continue to seek opportunities to work together in accelerating the pace of industry growth. I just can’t say enough about this partnership, and President Crow’s leadership has been incredible.”

The effort to attract TSMC was a fierce competition that involved many leaders in Arizona, including ASU. Phoenix Mayor Kate Gallego was one of those who went to Taiwan in fall 2019 to support the Greater Phoenix Economic Council in a pitch to TSMC.

“I have a background in power and water, so I was able to talk about the business attributes of our community in those areas,” Gallego said. “But they really wanted to talk about Arizona State University. They wanted to know they would have a well-educated workforce. It turned out our secret weapon in capturing their attention was ASU.”

ASU’s eight schools in the Fulton Schools of Engineering collectively represent the largest college of engineering in America, with more than 32,000 students — and more than 7,000 of them are pursuing education in fields directly related to microelectronics. This major pipeline of talent is important to many businesses already well established in Arizona.

“We’ve been growing and expanding, and we’ve been positioning through that growth and expansion to meet workforce needs as companies grow their footprint,” said Kyle Squires, Fulton Schools dean. “And we’ve been advancing not just the workforce training that we provide to new graduates, but also connection to supporting industry through faculty engagement, through research and also working together with the state to position the state for CHIPS Act opportunities.”

And because the industry needs not only new college graduates but also retraining for existing workers and those who do not hold four-year degrees, ASU has responded with options.

“When we think about the workforce, we’re thinking about the regular college student, everywhere from a bachelor’s to master’s to a PhD, but we’re also doing a lot of work in the pieces around that — like certificates, short courses and upskilling — so that people who want to change careers can do so and do so easily,” said Sally Morton, executive vice president of ASU’s Knowledge Enterprise.

“This will take a skilled workforce and a large one, so we very much want to be part of meeting that demand,” she said, noting that the nearly $53 billion investment from the CHIPS Act surpasses that of the Manhattan Project, in inflation-adjusted terms.

One of ASU’s most distinctive assets is the MacroTechnology Works, or MTW, facility.

MTW has been central to much of the recent activity making Arizona a focus of America’s microelectronics revival. It has captured attention worldwide and welcomed such visitors as U.S. Department of Commerce Secretary Gina Raimondo, leaders from the U.S. Department of Defense and European Union leadership.

MTW is a place where private industry — of all sizes — and academia come together, turning ideas into commercially viable products. The facility provides companies access not just to brainpower, but to key equipment.

“Companies don’t have to purchase, install and maintain capital equipment that they might need in order to do prototyping, because a university does that,” said Zachary Holman, vice dean for research and innovation for the Fulton Schools. “They don’t have to hire and train staff members who embody the knowledge to run that equipment, because the university does that too. We lower the bar in terms of time and money. And help them reach their goals.

As a result of its unique value proposition, MTW has attracted considerable outside investment.

Last July, Applied Materials made a more than $200 million investment with support from the Arizona Commerce Authority in tooling equipment to establish a Materials-to-Fab Center to advance new semiconductor materials deposition technology.

In December, NXP Semiconductors began a new partnership with ASU, supported by significant investment from the Arizona Commerce Authority, to expand new advanced packaging and workforce training capabilities.

And as recently as March of this year, Deca Technologies and ASU announced a partnership to create North America’s first Fan-Out Wafer-Level Packaging research and development capability. The new Center for Advanced Wafter-Level Packaging Applications and Development will be located inside the MTW.

The industry partnerships that have driven these investments are closely connected both to the research and the opportunity to develop the skilled workforce that every company desperately needs as this competitive industry moves forward.

Grace O’Sullivan, ASU’s vice president of corporate engagement and strategic partnerships, was one of the people who traveled to Taiwan as part of the pitch to TSMC to attract the company here. She has attended two visits from the U.S. president to distribute CHIPS Act funding to companies in Arizona. She knows that while Intel and TSMC were the recipients of that investment, it represents a win for the entire state — and it was a team effort to make it happen.

“It’s an interdisciplinary effort to make all of this work between government agencies, universities and community colleges, and these things don’t happen overnight,” O’Sullivan said. “Greater Phoenix Economic Council, Arizona Commerce Authority and ASU, under the vision of ASU President Michael Crow, have been planning this for years.”

Gradual work that has suddenly paid off for the state of Arizona.