Arizona’s technology sector continues its impressive expansion in 2024, establishing the state as an increasingly vital hub in America’s tech landscape. What began as modest growth has transformed into a robust ecosystem of aerospace giants, semiconductor manufacturers, and innovative startups reshaping the employment market across the Grand Canyon State.
The numbers tell a compelling story. According to CompTIA’s 2024 State of the Tech Workforce report, Arizona now hosts over 241,000 technology workers, marking a 3.2% increase from last year. This growth rate exceeds the national average of 2.8%, positioning Arizona among the top 15 states for tech employment expansion.
Raytheon Technologies leads this charge as Arizona’s largest tech employer with approximately 15,000 workers across its Tucson and Phoenix facilities. The defense and aerospace giant recently announced plans to add 1,500 additional jobs over the next three years, primarily in engineering and advanced manufacturing roles.
“Arizona offers a unique combination of talent, business environment, and quality of life that has allowed us to expand our operations significantly,” noted Daniel Ashby, Raytheon’s Southwest Regional Director, during the Arizona Technology Council’s quarterly briefing last month. This expansion comes as Raytheon secures several major defense contracts requiring specialized technological expertise.
Perhaps most transformative for Arizona’s tech landscape is Taiwan Semiconductor Manufacturing Company’s (TSMC) $40 billion investment in Phoenix. The company’s massive fab complex now employs nearly 2,000 workers, with projections to reach 4,500 by 2026 when full production capacity is achieved. According to the Arizona Commerce Authority, TSMC’s presence has already attracted 23 supplier companies to the region, creating an additional 5,600 jobs in the semiconductor ecosystem.
The multiplier effect of these major employers extends beyond direct hiring. The Federal Reserve Bank of San Francisco estimates that each high-tech job creates approximately 4.3 additional jobs in the local service economy, generating significant economic benefits throughout Arizona communities.
Beyond these tech giants, midsize employers have become increasingly important to Arizona’s tech landscape. Axway, the Scottsdale-based software development company, has expanded its workforce by 18% this year, while Infosys continues growing its technology hub in Phoenix with over 1,000 employees.
The Arizona Technology Council reports that average tech industry wages in the state now reach $97,500 annually, approximately 86% higher than the state’s average private sector salary. However, this figure remains about 12% below comparable positions in California, creating a competitive advantage for Arizona employers recruiting from neighboring states.
This wage differential has contributed to significant in-migration of tech workers. U.S. Census Bureau data indicates that approximately 8,700 tech professionals relocated to Arizona from California in 2023 alone, with similar trends continuing in 2024. LinkedIn’s Workforce Report confirms this pattern, ranking Phoenix third nationally for attracting software engineers from out-of-state.
The growth comes with challenges, however. The Greater Phoenix Economic Council identifies a persistent skills gap in specialized areas like cybersecurity, artificial intelligence, and semiconductor manufacturing. Nearly 68% of Arizona tech companies report difficulty filling advanced technical positions, forcing many to invest heavily in training programs and educational partnerships.
Arizona State University has responded by expanding its engineering and computer science programs, graduating over 3,200 students in these fields last year. Additionally, the Arizona Commerce Authority’s Technology Workforce Initiative has allocated $25 million toward technical training programs targeting high-demand skills.
Smaller metro areas are also benefiting from the tech expansion. Flagstaff has seen a 26% increase in technology startups since 2022, while Tucson continues building on its aerospace and defense technology foundation. The University of Arizona’s Tech Park hosts over 80 companies employing approximately 5,800 workers in southern Arizona.
“What we’re witnessing is the decentralization of America’s tech industry,” explains Dr. Maria Holguin, economist at Arizona State University’s W.P. Carey School of Business. “Arizona offers the infrastructure, talent pipeline, and quality of life that technology companies increasingly prioritize, especially as remote and hybrid work models become permanent fixtures.”
The state’s relatively lower cost of living compared to traditional tech hubs remains a significant draw. Housing costs in Phoenix average roughly 60% less than San Francisco and 45% less than Seattle, according to Zillow Research data from June 2024. This advantage helps companies attract talent while maintaining lower operational costs.
Looking ahead, the Arizona Office of Economic Opportunity projects technology employment will grow by 15% through 2028, adding approximately 36,000 new jobs. This growth trajectory depends partly on continued semiconductor industry expansion and Arizona’s ability to develop specialized talent.
As traditional tech hubs like Silicon Valley face challenges with housing affordability and workforce retention, Arizona’s technology ecosystem appears positioned for sustained growth. The state’s combination of established aerospace presence, emerging semiconductor manufacturing, and growing software development creates a diversified tech economy with significant momentum.
For a state once known primarily for tourism and retirement communities, Arizona’s transformation into a technology employment powerhouse represents one of the most significant economic shifts in its recent history. The ripple effects extend far beyond the tech sector itself, reshaping everything from education priorities to housing development across the Grand Canyon State.
