Enlarge / In 2020, Intel partnered with the National Forest Foundation on Phase III of a project that would replace invasive Arundo and Tamarix weed species with native flora and re-green areas that were burned. This phase of the project aims to restore 79 million gallons of fresh water per year. Two of the world’s leading chip manufacturers – Intel and TSMC – are strengthening their manufacturing presence in the USA by building new plants in Arizona.
Chip foundries are heavily dependent on water, and Arizona is one of the driest states in the country. Arizona receives only 13.6 inches of annual rainfall (compared to 50-60 inches for most parts of the deep south, or 30.3 inches on average for the US as a whole). But, as Forrester Research Director Glenn O’Donnell told CNBC, chip-making facilities are similar to indoor swimming pools – “it takes a lot to fill it, but you don’t have to add a lot to keep it going.”
Against the intuition, the notoriously thirsty industry may even improve the local water supply by focusing on reclamation and purification – Intel has funded 15 water restoration projects in Grand Canyon State with the goal of restoring 937 million gallons a year, and expects net positives Water consumption once the projects are completed.
What Arizona lacks in water it makes up for in overall stability – the state is very seismically stable and does not suffer from hurricanes or wildfires, with little risk of other natural disasters like tornadoes. Chip fabs can be built without such guarantees – Intel has a large presence in Oregon, for example – but West Coast chipmakers must take extreme isolation measures that are not required in Arizona plants.
The lack of rainfall in Arizona has another benefit – plenty of sunshine, which former Arizona Governor Janet Napolitano once said the state has the potential to become “the Persian Gulf of Solar Energy.” As of 2018, the state’s energy providers generated around 5.2 GW – almost 5 percent of their total electricity budget – from solar generation. Decentralized (non-utility-scale) generation in Arizona delivered another 2.3 GW in the same year.
However, the human factor can go beyond the natural benefits of the state. Intel started its Arizona presence more than 40 years ago and currently employs more than 12,000 people in the state. Local Arizona universities responded by building “reputations for semiconductor design courses and research,” according to Gartner analyst Alan Priestley. And, as Forrester director O’Donnell points out, “the political machine in Arizona is determined to make the state business-friendly … recent Intel and TSMC announcements come with a lot of help from federal, state and local authorities.” . “