PHOENIX — Salesforce’s annual San Francisco mega-conference drew more political attention than usual this week due to CEO Marc Benioff’s newfound support for Donald Trump and bringing National Guard troops into the city.
But another tech affair skipped town entirely this year for the first time in its five-decade-long history. Instead, representatives from Silicon Valley’s homegrown companies like Intel and Nvidia joined more than 20,000 attendees who descended on Phoenix last week for SEMICON West — North America’s largest trade conference for the semiconductor industry.
For now, they’re expected to run it back at the iconic San Francisco venue, the Moscone Center, next October, under a recent five-year deal to rotate between the two metros.
Yet a new possibility that the jump southeast, widely welcomed in interviews with POLITICO and rewarded by record turnout, could become permanent shows how quickly fortunes can flip for cities tied to the conference circuit. Those corporate events are one key metric for San Francisco Mayor Daniel Lurie as he tries to prove downtown has recovered from its Covid-19 slump.
“Overwhelmingly, the feedback I received was stay in Phoenix,” said Joe Stockunas, Americas president for SEMI, the industry association that hosts the convention and is headquartered in Silicon Valley. “I want to make a good decision, and it’s certainly being considered based upon how successful we were last week.”
Benioff, who also signed an agreement to keep his Dreamforce conference in San Francisco through at least 2027, had given himself an out earlier by saying it will stick around only if the city remains “safe and secure.”
SEMICON West’s circumstances are different, reflecting a weak spot for the broader state of California: its struggle to tap into the resurgence of domestic high-tech manufacturing encouraged by government incentives such as the 2022 CHIPS and Science Act.
Industry representatives offered POLITICO plenty of culprits, from California's higher energy and labor costs to its land use regulations. No matter the cause, the CHIPS Act hasn’t changed the fact that Silicon Valley is now rich in companies that develop the world’s best chips, then produce them elsewhere. Gov. Gavin Newsom and state leaders have tried to reverse the trend by offering tax credits and including semiconductor facilities in exemptions from state environmental permitting rules he signed earlier this year.
But over the week of the conference, the Phoenix Valley hosted three semiconductor-related groundbreakings and a ribbon-cutting — a feat that would be hard to imagine the Golden State replicating. Intel opened a new plant in the desert days prior. While other Democratic states have won over multibillion-dollar sites of their own, a total of three companies are expanding factories in California under CHIPS.
“We’ve got 60 companies that have announced expansions in our state for a total of $210 billion,” Sandra Watson, who leads the Arizona Commerce Authority, told POLITICO. “We decided that it would be a conversation well worth having, to start to think about, ‘Is there even a possibility that they would consider having that conference in a new location?’"
Newsom administration spokesperson Willie Rudman emphasized that California is still “home to the nation's most comprehensive semiconductor ecosystem.”
“We continue to work with our industry partners, including SEMI, to invest in this vital industry and ensure that the talent and businesses of the future remain in the Golden State,” Rudman told POLITICO in a statement. “And we look forward to having a strong California presence at SEMICON West 2026 in San Francisco.”
Lori Lincoln, a spokesperson for San Francisco’s tourism organization, noted that SEMICON West had confirmed to be at Moscone next year, 2028 and 2030.
“Moscone Center is hosting 34 events this year, generating nearly 657,000 room nights,” she added. “Based on conventions currently in our pipeline, we anticipate meeting or exceeding 2025 levels.”
Eyeing alternatives
Stockunas, the Americas president for SEMI, said he chose to explore alternatives a few years ago, as big-dollar investments began rolling into Arizona, because he wanted to inject new life into the Bay Area staple. He looked at San Jose (not enough of a change in scenery), Austin, Texas (its conference center was too small), and Portland, Oregon as well.
By the time he approached Phoenix for a meeting, a full house of officials stood ready to close the deal.
“They had the whole city there,” Stockunas said, recounting representatives from Watson’s organization, the Greater Phoenix Economic Council, the convention center, plus neighboring Chandler and Tempe. “I was kind of set back by it. In San Francisco, I deal with one organization.”
Individual companies, too, have weighed where they can find the same white-glove treatment and sense of urgency that defines chip-making hubs like Taiwan, as states compete for their projects. Executives recalled seeing Arizona Gov. Katie Hobbs on multiple occasions throughout the week, and during a keynote speech at the conference, she dubbed herself the “semiconductor governor,” promising them that “no state will do more to support your success.”
Intel’s vice president of government affairs, Sarah Kemp, praised the state’s tax incentives for covering about 30 to 40 percent of its construction costs. “That’s a game changer. I mean, when you’re talking about $20 billion” for a factory, she said at the conference. “That’s a chunk of change. My CFO is like, ‘looks good.’”
A version of this story first appeared in California Decoded, POLITICO’s morning newsletter for Pros about how the Golden State is shaping tech policy within its borders and beyond. Like this content? POLITICO Pro subscribers receive it daily. Learn more at www.politicopro.com.
Early figures make a convincing case for the Phoenix camp. The conference was SEMICON West’s largest in 18 years. It had to add a second exhibition space to fit more than 1,500 booths, a 45 percent spike. Registrations nearly doubled from about 11,400 last year.
Stockunas plans on digging into the figures further — for instance, to check if attendance from Silicon Valley’s many chip design firms had slipped. Should he walk away from San Francisco, he’ll also need to settle what’s owed to the city (a hefty, though he says not insurmountable, bill) and lock in new dates for Phoenix.
“Obviously, we’d love to see it here every year,” said Thomas Maynard, interim CEO at the Greater Phoenix Economic Council. “We can make our own brand … that’s as valuable as Silicon Valley, where the VCs sit and the headquarters are.”
Arizona Chamber of Commerce President and CEO Danny Seiden quipped, “I think it'll be moving here permanently, if I was a betting man.”
That'd be what Jessica Gomez, the CEO of Oregon-based CHIPS awardee Rogue Valley Microdevices, prefers. “There’s a lot of excitement, tons of people on the show floor, so we've gotten a chance to meet with a lot of suppliers and customers,” she said. “It just seems to have very good energy this year.”
The San Francisco Bay Area did have its defenders.
“San Francisco is much better because you have, I guess, it's teething problems,” said Mike Wilson, a conference speaker and top executive at the logistics company DSV who lives in Switzerland. “What I saw in San Francisco, particularly last year, there were people engaging and there was value being added. What I see here is people wandering around.”
Still, they were outnumbered even among Californians. Saeed Amidi, CEO of the Plug and Play startup accelerator in Sunnyvale, pointed out that Phoenix is “close enough that everybody from Silicon Valley can come.”
“It’s a fresh perspective, and it’s not bad,” he told POLITICO. “It creates a little competition to Silicon Valley, so maybe we will wake up.”
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