Broken Earth: As Arizona's water woes deepen, the blame game beins

Phoenix, Arizona: A new report from ABC15 has posed a pertinent, if often asked, question: Is Arizona's booming semiconductor industry putting a strain on the state's water supply?

Sarah Porter, the director of the Kyl Center for Water Policy, told the network: “Semiconductor manufacturing plants use a lot of water to clean and cool the factories. A huge amount of water is cycled through daily to maintain production quality."

Chandler, Mesa, and other nearby cities have expressed growing unease about water allocation for these facilities. Some cities have even started imposing restrictions or altering policies to prevent new factories from freely tapping into the region's water supply.

Critics argue that the industrial water consumption outweighs the benefits, particularly in a state already struggling with limited water resources. It's also important to note that Arizona has been in a long-term drought since 1994.

Semiconductor factories rely on water to cool systems and generate electricity – globally, they are already consuming as much water as Hong Kong, a city of 7.5 million, according to an S&P Global report.

But, according to a World Economic Forum (WEF) report,  what really drives most of the industry's thirst is its need for ultrapure water that is used to rinse residue from silicon chips during the fabrication process.

What is Ultrapure Water?

Ultrapure water is treated through processes such as deionization and reverse osmosis to remove pollutants, minerals and other impurities that can damage chips. It takes roughly 1,400 to 1,600 gallons of municipal water to make 1,000 gallons of ultrapure water. An average chip manufacturing facility today can use 10 million gallons of ultrapure water per day—as much water as is used by 33,000 US households every day.

In addition to its enormous use of water, chip manufacturing also produces wastewater that contains pollutants – including heavy metals – that can be toxic to aquatic ecosystems and humans.

But these findings are not new, and chipmakers and environamental agencies are well aware of them. According to the WEF manufacturers are committing to offset the impact of their rising water use. A new chip facility being built by TSMC in Phoenix says that its Arizona factories aim to achieve a 90% water recycling rate, adding that the company has started the design phase of building a water reclamation plant with a goal of achieving "near zero liquid discharge".

Meanwhile, Intel, which is building two new chip factories in Chandler, has partnered with the city to create a reclaimed water facility. The water produced will supplement groundwater supplies and provide Intel with more water for its cooling systems (for list of companies driving Arizona's semicoductor boom see bottom).

According to a report in 'The Guardian', the rise of ethical investing has helped the semiconductor industry get cleaner. Mark Li, a semiconductor analyst at the investment firm Bernstein told The Guardian that fund managers increasingly market “green funds” and investors are asking more questions about companies’ environmental, social, and governance (ESG) impact.

Intel made a commitment to source 100% of its energy from renewable sources by 2030, as did TSMC, but with a deadline of 2050.

But there is another industry that is using a large amount of Arizona's water to grow a product that is mostly being exported overseas, and it is this product that has online forums and farmer seriously up-in-arms.

Arizona's Alfalfa industry has borne the brunt of severe criticism over its groundwater usage over the last few years, especially given that almost the entire crop is exported to Saudi Arabia.

In March of this year Arizona Governor Katie Hobbs announce that the state was terminating and declining to renew the leases of Fondomonte and the company is no longer pumping groundwater in the Butler Valley groundwater basin.

Fondomonte, which is owned by Saudi dairy giant AlMarai, held four separate lease agreements in the Butler Valley Basin. On October 2, 2023, the State Land Department notified Fondomonte that three of its four leases in the Butler Valley Basin would not be renewed. Fondomonte was simultaneously notified that one of its leases had been canceled due to an uncured default.

Another company Al Dahra, based in the Emirate of Abu Dhabi in the UAE, which began farming alfalfa in the state on about 3,000 acres several years ago, has also come under increased pressure over its water use.

Recently, Al Dahra has said that its Hualapai Valley Farm no longer grows alfalfa. "New crops that are less water-intensive and higher value such as hemp and baby potatoes are being produced," the company told the Center for Biological Diversity. Al Dahra said the company uses state-of-the-art water systems, including "sub-surface drip irrigation" and soil moisture probes that help pinpoint the amount of water applied to crops. Al Dahra has about 170 employees in Arizona.

Arizona's semiconductor industry

Intel: Located in Chandler, Intel has been a long-time player in Arizona's semiconductor scene. Intel is investing heavily in new fabs (Fab 42 and Fab 62), which are part of a $34.5 billion expansion aimed at producing advanced semiconductor chips​.

TSMC (Taiwan Semiconductor Manufacturing Company): TSMC is constructing a massive plant in Phoenix, with a planned investment exceeding $40 billion. The first fab is expected to begin production in 2024, and a second fab will be producing advanced 3nm chips by 2026.

Onsemi (formerly ON Semiconductor): Headquartered in Phoenix, Onsemi specializes in intelligent power and sensing technologies. It has a substantial presence in Arizona with over 11,000 employees​.

ProTek Devices: Based in Tempe, ProTek is a key supplier of high-performance TVS protection devices and other semiconductor components​.

ASM: With over 2,000 employees in Phoenix, ASM is a leader in semiconductor wafer processing equipment, helping to develop advanced technologies like epitaxy and ALD​.