Will semiconductor plants really drain Arizona? That theory is overblown [AZ Republic editorial]

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Will semiconductor plants really drain Arizona? That theory is overblown

Semiconductor plants like Intel and TSMC may use a fair amount of water, but is that really a bad idea for Arizona amid drought and water shortages?

www.azcentral.com

Will semiconductor plants really drain Arizona? That theory is overblown​

Opinion: Semiconductor plants like Intel and TSMC may use a fair amount of water, but is that really a bad idea for Arizona amid drought and water shortages?​

Joanna Allhands
Arizona Republic
Published 9:00am MT March 4, 2022

Why is Arizona building water-intensive semiconductor plants when it is facing water shortages?

There have been multiple articles to that effect in the national and international press, which have spurred questions locally about whether this is the smartest way to use such a precious resource.

Most of the consternation comes from the Taiwan Semiconductor Manufacturing Co. (TSMC) plant that is under construction in north Phoenix, near Interstate 17 and Loop 303.

The plant is going up not just on a swath of raw desert, but in an area that has little development nearby. People look at the giant cranes and towering walls and ask, “Where are they getting the water for that?”

Phoenix has water for TSMC​

It’s a fair question, particularly because TSMC has not shared many details about its intended water use. Let’s hope that changes once the plant is up and running.

Phoenix water officials are planning for water use around 10,000 acre-feet a year at TSMC’s 5-nanometer fab and up to 40,000 acre-feet a year if, at some point down the road, there were six fabs on site. (The company has not announced anything other than the first fab, which is set to open in 2024).

So, while TSMC is likely to become one of Phoenix’s largest water users, the city has renewable supplies that aren’t currently supporting other users to accommodate this growth. That includes an allocation of Central Arizona Project water from the state land department and unused Salt and Verde river supplies.

The city’s estimates also don’t account for any water recycling that TSMC is planning to do, or any wastewater the city might capture, treat and return to the aquifer.

The key factor for semiconductors: Water recycling​

That’s the key with semiconductor plants. While the chips that power our cellphones, computers and other electronics require a fair bit of water to produce, much of it is recycled.

Intel has two campuses in Chandler with multiple fabs, for example, which used about 16,000 acre-feet of municipal water in 2020, according to its latest annual report. But just because that water flowed to the campuses doesn’t mean it was consumed.

About 80% of that water was captured after use and purified at treatment plants operated by Intel and the city of Chandler, then either returned to the fabs for reuse in manufacturing or its cooling towers, or reused within the city or injected into the ground to recharge the aquifer.

About 6,200 acre-feet of water were treated on-site and reused without entering the municipal wastewater system, according to the report, while only about 2,900 acre-feet of water was consumed – and therefore unable to be reused – during the manufacturing process.

TSMC, meanwhile, is working with Phoenix on what appears to be a similar reclamation setup, using reverse osmosis and other technologies to treat water for manufacturing or municipal reuse.

And while the company declined to offer specifics on the volume of water its facilities could treat, deputy spokesperson Nina Kao said via email that “approximately 65% of the water used in the Arizona fab will come from TSMC’s in-house water reclamation system, helping to reduce city water consumption.”

How that compares to what homes, farms use​

That’s great, you might say. But even if water is recycled, it’s still being used.

Fair enough. Let’s put that water into perspective.

Intel’s 16,000 acre-feet is roughly what it would take to support about 4,000 new homes, since about four newly constructed homes use, on average, about an acre-foot a year. (Two recently announced developments near Apache Junction entail about 10,000 new homes on 2,800 acres.)

That’s also what it would take to irrigate about 3,200 acres of cotton, since one acre uses, on average, about 5 acre-feet of water. (There were more than 27,000 acres of cotton in production in Maricopa County in 2017, the most recent farm census data available.)

So, in the grand scheme of things, it’s not a ton of water.

It’s not a trivial amount, especially as water gets scarcer.

If water is an investment, we get a return​

But if we think of water as an investment in our future – and we should, because increasingly it will function as one – semiconductor plants can offer a lot of economic bang per drop.

Sarah Porter, director of Arizona State University’s Kyl Center for Water Policy told KJZZ that for every million gallons we “spend” (that’s about 3 acre-feet), we get about 200 high-wage semiconductor jobs in return. That’s compared to 30 or 40 data center jobs or about 50 golf course jobs, she said.

Meanwhile, Intel had an $8.6 billion impact on Arizona’s gross domestic product in 2019, directly employing more than 10,000 and supporting another 58,600 jobs. And TSMC is expected to generate $38.2 billion in tax revenue statewide over 20 years, with 1,900 employees at its first fab when it opens.

The company is hiring much of its staff locally, Phoenix economic development director Christine Mackay said, and multiple suppliers have announced plans to build or expand all over the metro Phoenix area. Those and other suppliers are expected to generate another 6,000 jobs for the region, Mackay said.

Given all the ways that we could allocate our water, semiconductor plants that recycle most of what they use are not a bad investment.

Reach Allhands at joanna.allhands@arizonarepublic.com. On Twitter: @joannaallhands.

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[benb]

I found this EDGAR filing for TSMC Arizona interesting: Mentions water 4 times, but always in the context of Taiwan, not Arizona. Arizona, it seems, has plentiful water compared to Taiwan.

424(B)(2)

"The frequency and severity of disruptive events, including damaging earthquakes, other natural disasters and severe weather has been increasing, in part due to climate change or systemic regional geological changes. We have manufacturing and other operations in locations subject to natural disasters, such as flooding, earthquakes, tsunamis, typhoons, and droughts that may cause interruptions or shortages in the supply of utilities, such as water and electricity, which in turn could disrupt operations. For example, in 2020 and 2021, Taiwan has faced one of the worst droughts in decades. Government restrictions on supply and usage of water by industrial companies such as us in response to such severe weather events could also disrupt our operations.
In addition, our suppliers and customers also have operations in such locations. For example, most of our production facilities, as well as those of many of our suppliers and customers and upstream providers of complementary semiconductor manufacturing services, are located in Taiwan and Japan, areas susceptible to earthquakes, tsunamis, flooding, typhoons, and droughts from time to time that may cause shortages in electricity or water, or interruptions to our operations."
"Future expansions of our operations in the R.O.C. could be limited by shortages in water and electricity, and the limited availability of commercial-use land."

 

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Just some numbers, for what it's worth. (AF = acre-foot = 1233.5 cubic meters)

- From article: "Phoenix water officials are planning for water use around 10,000 acre-feet a year at TSMC’s 5-nanometer fab and up to 40,000 acre-feet a year"

- The City of Phoenix has access to a total of 186,557 AF [per year] of Colorado River water, representing 38% of Phoenix's water sources. (https://www.phoenix.gov/waterservicessite/Documents/2021 City of Phoenix Water Resource Plan.pdf page 81 and 23)

- Total CAP allocation = 620,678 AF [per year]. (CAP = Central Arizona Project, canal that goes from Colorado River to Phoenix and Tucson. https://library.cap-az.com/documents/waterops/subcontract-status-report-04-01-2021.pdf)

Wow, that's a lot of water.

 

[Scotten Jones]

Taiwan has had a water shortage for a long time, although it has recently gotten worse. In Taiwan TSMC recycles something like 85% of the water they use.

 

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Taiwan has had a water shortage for a long time, although it has recently gotten worse. In Taiwan TSMC recycles something like 85% of the water they use.

I'm not too worried; I live here in the Phoenix area and before accepting a job and moving out here from New Hampshire, I did some research to check whether the water management in Arizona was sensible given municipal growth + climate change. Phoenix and most surrounding towns and Tucson have done their homework. Much of the rest of the state got the short end of the stick, though, especially Cochise County in SE Arizona and parts of Pinal County south of Phoenix, where they don't have a sustainable water source to cover their needs, and are relying a lot on groundwater ("fossil aquifer") that has caused the ground to subside by many feet, and nobody is willing to agree on local water rules to prevent this trend from continuing.

Agricultural use in Arizona is going to suffer, especially with drought and the way Colorado River water rights are renegotiated as a result. Not sure how much of that really makes sense in the grand scheme of things. Some of it does, I guess... Yuma grows something like 90% of the USA lettuce crop during the winter months, mostly on farms on floodplains around the lower Colorado River, so at least it stays fairly near the water source. Other crops are less clear, and rely on low-tech inefficient irrigation in a desert... Pima cotton? citrus? durum wheat? alfalfa hay? pecans? In the end it's going to be about supply, and money, and whether farmers can adapt and/or consumers are willing to bear the extra cost the farmers need to upgrade to drip irrigation and other methods.

Conversion of agricultural use to residential / commercial usually lowers the net usage per acre --- that is what has saved Phoenix's water supply. (I've seen multiple sources for this, one is Phoenix's water resource plan but I can't remember where off the top of my head.)

Re: TSMC -- the author of the article I posted, that mentions the 10K acre-feet x 4 at full build-out, has done her homework, and expect that these numbers are net intake, taking recycling into account. I also haven't looked into water reclamation: I assume that even after recycling, there is a significant amount of wastewater that will be treated and "reclaimed" (used by other consumers that don't need potable water) or sent into a water recharge project underground to offset other groundwater withdrawal in the area.

One of the Chandler-area local newspapers had a story about Intel's recycling efforts here.) I couldn't find any public documents easily where TSMC or Intel (in Chandler) presented estimates of water use for the new fabs-under-construction; I assume that there must be something required to satisfy municipal planning authorities, given the size of these projects. I can't believe they would be allowed to skirt "sunshine" laws and keep water usage estimates confidential, but when I contacted Phoenix's and Chandler's water departments, they weren't able to find any public statistics, and the way they responded gave me the impression they were trying to respect TSMC's / Intel's confidentiality, which I get, but at the same time, I'm a citizen who lives here and there is a public need to ensure water resources are adequate. My next stop would have been to look into the local planning approval records for these two projects and see what kind of info was filed, but I ran out of free time.

I'd like to write up an article on this topic someday. Not sure where to publish it though... maybe here? My blog on embeddedrelated.com is more about embedded systems, and fab water use seems a bit off-topic.