Arizona and water-guzzling chipmaker TSMC are unlikely partners

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In fact, Arizona put limits on some new housing developments last year because there isn’t enough groundwater to go around.
But local officials say the city has enough water for TSMC, and potentially even more companies, as the region emerges as a top chip hub.
“We do [have enough water].” Semiconductor fabs rely on water to clean the tiny silicon wafers that computer chips are built on.
TSMC’s water usage per unit has been trending upward in recent years, though it’s also reusing water and aims to achieve a 90% recycling rate.
“Near-zero wastewater discharge … there’s no number on that,” Lepawsky said.
TSMC doesn’t expect all three fabs to come online until 2028, and they’ll likely be in service for decades.
Editor’s note: An earlier draft of this story stated that TSMC’s wastewater discharge decreased 30% between 2018 and 2022.
The article has been updated to correctly reflect that TSMC’s discharge increased, not decreased.


However, TSMC still has to answer the question of where water will come from in one of the driest cities in the nation—Phoenix, the location of the planned factories.

Water, lots of it, is needed in the semiconductor manufacturing process. A SandP Global Ratings report that identified the water supply as a potential threat stated that the global industry uses nearly as much water as New York City.

The tech hardware industry, especially the water-intensive semiconductor subsector, is vulnerable to water scarcity in the next ten years, according to a February S&P report. Such risk mishandling could have an impact on a chipmaker’s creditworthiness and operations. “.

Phoenix has experienced a drought for more than ten years. Because there isn’t enough groundwater for everyone, Arizona actually placed restrictions on some new housing developments last year. However, local authorities claim that as the area becomes known as a leading chip hub, the city has enough water for TSMC and possibly even more businesses.

According to Cynthia Campbell, a water resources management advisor for the city of Phoenix, “there is an economic tradeoff when dealing with a limited and precious resource like water, if you’re using a lot of water for one [facility].”. “Yeah, we have enough water.”. “.

Water is used in semiconductor fabrication plants to clean the tiny silicon wafers used to make computer chips. Furthermore, TSMC needs even more water to produce the new, more sophisticated cutting-edge chips that design firms like Arm and Nvidia have created to support technologies like AI. Although TSMC recycles water and strives for a 90% recycling rate, the company’s water usage per unit has been rising recently.

However, some specialists doubt the real advantages.

“Recycling 90 percent sounds really good,” said Josh Lepawsky, an expert in resource use and waste in the electronics industry and professor at Memorial University of Newfoundland. “Perhaps this should go without saying, but 90 percent implies that 10 percent is either lost or not recycled. You have a 100% need for “new water” every 10 days. “.”.

Chip manufacturers not only use water in their production process, but also generate wastewater due to the use of chemicals that may have unknown or harmful effects on the environment. A group of semiconductor makers opposed a proposed EPA rule to outlaw pervasive flame-causing substances, or “forever chemicals,” in August of last year, claiming that the move would make it impossible for the sector to produce electronics in the U.S. S. and cautioning that there would be “immeasurable economic consequences of such a summary action by EPA.”. “.

TSMC pledged to have “near zero” wastewater discharge rates for its three Arizona factories, despite the fact that the company’s wastewater discharge increased by 30% between 2018 and 2022. However, that also arouses doubt.

Lepawsky stated, “Near-zero wastewater discharge… there’s no number on that.”. “Is that one? one? ten?”.

According to Campbell, city water officials in Phoenix have been in close contact with TSMC regarding its plans for water use and treatment, but they are still unsure of the company’s exact discharge rate. Requests for comments from TSMC and the Commerce Department were not immediately answered.

The three fabs won’t be fully operational until 2028, according to TSMC, and they will probably remain in use for many years after that. Water quality in Phoenix may deteriorate during that time, according to Lepawsky. However, TSMC would find it difficult to move to “greener pastures” (figuratively speaking) after pouring $65 billion of its own funds into the factories in addition to federal grant money.

“You expect to be producing for 10, 20, or 30 years at these facilities. That’s timelines related to climate change, Lepawsky said. “If water conditions deteriorate to the point where that becomes a problem, you’re not just going to pick it up and move it somewhere else when you’re spending billions of dollars to build a new facility at that kind of magnitude. “.

Water scarcity is not a major challenge for TSMC, according to other Arizona officials. Danny Seiden, CEO of the Arizona Chamber of Commerce & Industry, stated in an August op-ed that Arizona can meet its water demands through conservation and increased water efficiency, citing TSMC rival Intel’s Chandler, Arizona, as evidence. plant, which uses its on-site reclamation facility to treat more than 9 million gallons of water every day.

According to Campbell, Phoenix’s water supply can accommodate additional projects, provided that they meet the necessary standards, as Arizona endeavors to establish itself as a center for semiconductor manufacturing.

“The amount of water is finite. There will eventually come a limit, but based on the plans we’ve seen, we don’t see anything coming to an end,” she said.

Editor’s note: This story’s previous draft claimed that TSMC’s wastewater discharge fell by 30% between 2018 and 2022. The discharge from TSMC increased, not decreased, as the article has been updated to accurately reflect.

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