Hovland's withdrawal followed a tie for 58th place at the AT&T Pebble Beach Pro-Am, beating only 14 players in the limited-field event.
He opened with a 69 last Thursday, but struggled to consecutive 72s before the tournament was shortened to 54 holes due to weather.
It was Hovland's first start since opening 2024 with a T22 at The Sentry, the season's first $20 million ($A30 million) signature event that also featured a limited field.
Hovland's decision not to compete in Phoenix sparked the embers of rumours of a potential move to the LIV tour.
England's Tyrrell Hatton pulled out shortly before last week's Pebble Beach start, going on to join Jon Rahm's team that won LIV's first event of the season in Mexico on Sunday.
The Norwegian has repeatedly denied a potential move to LIV, saying in December he doubted it would be a future consideration.
"I don't think their product is that great. I'm not such a fan of, for example, playing without a cut," Hovland told Eurosport Norway.
"You need the competition with 150 players and a cut. If you don't play well enough, you're out. There is something about it that makes your game a little sharper.
"If I had gone to LIV, I don't think I would have become a better golfer. And then it is, in a way, end of discussion."
Hovland has committed to the third signature event of the year at the Genesis Invitational at Riviera in Los Angeles next week.
He was followed out of Phoenix by fifth-ranked Xander Schauffele, who was coming off a T54 at Pebble Beach - his first finish outside the top-10 in four starts this year.
Hovland's withdrawal created a spot for Victor Perez, with Alexander Bjork joining the field in place of Schauffele.
The tournament begins on Thursday (Friday AEDT) at TPC Scottsdale and still includes an elite field that is led by two-time defending champion and world No.1 Scottie Scheffler.
He is scheduled to be joined by No.6 Wyndham Clark, Max Homa (8), Matt Fitzpatrick (9) and Brian Harman (10).
Other marquee names include Jordan Spieth, Justin Thomas, Sam Burns and Rickie Fowler, along with former major champions Hideki Matsuyama and Australia's Adam Scott.
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