Why Intel and TSMC are building water-dependent chip factories in one of the driest U.S. states

By Sam Shead | CNBC

The biggest semiconductor manufacturers in the world are quickly trying to build new factories as the global chip crisis continues to wreak havoc on a plethora of industries.

U.S. semiconductor giant Intel announced in March that it plans to spend $20 billion on two new chip plants in Arizona. Separately, TSMC (Taiwan Semiconductor Manufacturing Company) said it was going to build a $12 billion factory in Arizona, and chief executive C.C. Wei said Wednesday that construction had already begun.

The Grand Canyon State may not, however, seem like the most obvious place for a chip “foundry” or “fab” since the high-tech manufacturing plants guzzle millions of gallons of water every day.

At present, in the face of climate change, Arizona is facing a deepening water crisis and some of the state’s all-important aquifers have an uncertain future.

Arizona received just 13.6 inches of rainfall on average per year between 1970 and 2000, according to the NOAA National Climatic Data Center, making it the fourth driest state nationwide. Conversely, Hawaii and Louisiana recorded the highest levels of average yearly precipitation in the U.S. over the same time frame, reporting 63.7 inches and 60.1 inches, respectively.

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