The Greater Phoenix Economic Council (GPEC), a major business group in the US city, on Friday promised Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) that it would gain access to sufficient water supplies for its fabs under construction in the drought-affected state of Arizona.
TSMC has obtained a large volume of water as the city had promised since the company began its investments in Phoenix, GPEC president and CEO Chris Camacho said, adding that if it is planning to build more fabs in the city, his group would help the Taiwanese chipmaker gain sufficient water.
On its Web site, the GPEC said it has fueled the regional economy in the past 33 years by helping 950 companies, creating more than 174,000 jobs and US$36 billion in capital investments.
Photo: CNA
The GPEC has been named one of the top economic development organizations in the US by the non-profit International Economic Development Council, which serves economic developers.
Concerns over water supplies in Arizona have been running deep since a March 31 report in the financial weekly Barron’s, which speculated that TSMC could face competition for water in the state from agricultural users and nearby native American people.
US rival Intel Corp’s advanced fabs in Arizona are expected to add pressure on TSMC’s water needs, the report said.
Photo: CNA
TSMC is investing US$40 billion to build two wafer fabs in Phoenix, with one scheduled to start mass production next year, using the company’s advanced 4-nanometer process, and the other to begin commercial production in 2026, using the more advanced 3-nanometer process, the latest technology the chipmaker has mass produced in Taiwan.
International news media have reported that TSMC could build up to six fabs in Arizona.
Citing an estimate from Phoenix officials, Barron’s said that TSMC could require up to 40,000 acre-foot (49.3 gigaliters) of water a year if it builds six fabs in Arizona, enough for 160,000 homes.
Camacho said that water has become a scarce resource to the western US, but Arizona has made great efforts in water resource planning in the past few decades to tackle this problem.
Camacho said the manufacturing sector only accounted for 5 percent of the total water allocation in Arizona, so future investors are expected to gain sufficient water resources.
TSMC is highly interested in water recycling and about 90 percent of the company’s water is recycled, which has drawn much attention from Phoenix, Chamacho said.
After the Barron’s report was published, TSMC tried to assuage fears over water supplies in Arizona, issuing a statement in early April reiterating its plans to construct a water recycling facility to meet the needs of its advanced wafer fabs in Phoenix, and build a comprehensive waste water treatment system to reduce consumption and increase efficiency.
TSMC said it has been in close contact with officials in Phoenix since the initial planning stages for its Arizona fabs, to ensure sufficient water resources.
Although TSMC’s water recycling efforts are expected to reduce the effect from Arizona’s water supply issues to some extent, electricity supply, much of which is generated by water, could pose another challenge to the chipmaker, Kirkland Capital (柯克蘭資本) chairman Kirk Yang (楊應超) said, adding that as Intel’s advanced fabs in Arizona are expected to exacerbate the situation, TSMC would face competition for water and power.
On Friday, the government-sponsored trade promotion organization Taiwan External Trade Development Council signed a memorandum of understanding with the GPEC to set up a partnership to push for economic development.
Camacho said that 24 TSMC suppliers have followed the chipmaker to go to the US, and another 27 are in talks with the GPEC about possible investments.
In addition to cooperation in semiconductors, the GPEC is eyeing investments in aviation, medical equipment and bioscience, renewable resources, and information and communications from Taiwan, he said.
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