An Arizona steel fabrication company is putting $20 million into a second East Valley factory, betting that a wave of data center, high-rise and semiconductor construction across the Phoenix metro isn't slowing down anytime soon. AF Steel Fabricators expects the new 55,000-square-foot plant, called Fab 2, to open at the beginning of October.
A Company Outgrowing Its Own Expansion Plans
The new facility will sit adjacent to the company's existing operation, according to KTAR News 92.3 FM. AF Steel Fabricators built a 65,000-square-foot facility back in 2021, and that plant was originally designed to cover the company's fabrication needs for the next 20 years. Instead, dramatic growth arrived just five years in, driven by a construction boom across the Phoenix metro area and surging demand for work on major projects.
President Bill DeHaven, who has been with the company for nearly 30 years, said the new investment comes down to current customer needs and a hefty backlog of secured work. He said additional processing capacity was necessary to support customers' long-term success, according to the same report. The company's project list includes work on TSMC's North Phoenix campus, data centers, high-rise buildings, and a contract to fabricate steel for the Southwest border wall.
Why the Backlog Keeps Growing
The timing lines up with a broader industrial building surge across Greater Phoenix. During 2025 alone, 97 projects totaling almost 18 million square feet delivered across the region, according to CommercialSearch. At the start of the year, another 100 facilities were under development, representing roughly 4 percent of total industrial stock in the region.
Much of that momentum traces back to Taiwan Semiconductor Manufacturing Co.'s enormous footprint in the area. TSMC has boosted its Greater Phoenix spending by an additional $100 billion, bringing its total planned investment to $265 billion, per the CommercialSearch report. Elsewhere in the region, developers Creation and Crow Holdings Capital have broken ground on Avondale Tech Center, a three-building, roughly 700,000-square-foot industrial campus on 38 acres designed to serve advanced manufacturing, research and development, and assembly operations including semiconductor work and defense contracting.
A Two-Speed Construction Market
Not every measure of Arizona construction is pointing straight up, though. Statewide nonresidential building starts totaled $30.8 billion in the first five months of 2025 but fell to just $3.3 billion over the same stretch in 2026, per ConstructConnect. Much of that steep drop reflects a lopsided comparison: the Mountain Census division's overall 70.5 percent decline in nonresidential starts through May 2026 was driven entirely by the fact that the prior year's figures included TSMC's $25 billion plant. Nationally, nonresidential construction starts were actually up 17.6 percent through May 2026, ConstructConnect reported, underscoring how much a single mega-project can skew regional year-over-year numbers even as underlying activity stays strong.
That contrast helps explain why a steel fabricator like AF Steel Fabricators can be expanding aggressively even as regional headline numbers look shaky on paper. TSMC's original 2020 announcement of a $12 billion leading-edge semiconductor fab in Phoenix, built on more than 1,100 acres the company purchased, kicked off years of downstream construction work for suppliers and fabricators across the Valley, according to InBusiness Phoenix. The Southeast Valley's Phoenix Mesa Gateway area alone was projected to add 5.3 million square feet of industrial space, the outlet noted, a sign of just how much fabrication and manufacturing capacity the broader region has needed to absorb.
What's Next for Fab 2
For AF Steel Fabricators, Fab 2's opening at the start of October marks the next step in keeping pace with that demand. DeHaven's comments frame the expansion less as a bet on future growth and more as a response to work the company has already locked in. With contracts tied to some of the region's highest-profile projects already on the books, the new plant is aimed squarely at making sure the backlog doesn't outrun the company's capacity to build.
