Managing Arizona’s most precious resource: TSMC Arizona’s thoughtful plan for managing water use Article originally posted on AZ Big Media on March 6, 2026 As economic developers look for ways to bolster Arizona’s economy, they must balance the need to attract relocating and expanding companies with the availability of our state’s most precious resource: water. TSMC selected North Phoenix as the site of its U.S. operation in 2020 precisely for this reason. The decision to locate here was largely due to the state and city’s thoughtful and thorough planning, including a 100-year plan to reduce water consumption, improve water quality and enhance water availability. Like Arizona and Phoenix, TSMC is committed to reducing natural water consumption in its operations and across its supply chain to minimize environmental impacts. The company established a sustainable water management system, with comprehensive policies and management guidelines that exceed regulatory requirements and drive the supply chain to conserve water. TSMC is also investing heavily in water conservation, aiming for more than 90% water recycling at its facilities, including in desert regions like Arizona. TSMC Arizona’s stewardship of water in an industry that needs it Water consumption in the semiconductor fabrication process is significant, with typical fabs using millions of gallons to clean wafers – the circular slices of high-purity crystalline material used to manufacture integrated circuits and electronic chips. The process demands ultra-pure water to prevent defects that could compromise chip functionality. Ultimately, this requirement creates a cascade of water treatment needs that generate significant volumes of wastewater, which requires further processing. New plant to advance semiconductor manufacturing water conservation Today, TSMC Arizona operates at a 65% water recycling rate at its Phoenix campus by processing wastewater through existing treatment systems before discharging it back to Phoenix’s municipal system. Recycled water is used in the site’s central chillers and air scrubbers. In the summer of 2025, given the demand for its chips and the need to expand its footprint, TSMC Arizona broke ground on a 15-acre Industrial Reclamation Water Plant (IRWP), marking a significant advancement in semiconductor manufacturing water conservation. Scheduled for completion in 2028, the plant will enable the company to achieve “Near Zero Liquid Discharge” capabilities to recycle nearly all of its water usage and convert industrial wastewater back to ultrapure standards required for semiconductor production. At startup, the facility is expected to achieve an 85% water recycling rate, with plans to increase that to 90% or better to reduce the water supply required from the City of Phoenix. An important feature of the plant is its design, modeled after TSMC’s Taiwan facilities while taking into consideration Phoenix’s harder water, with higher levels of magnesium and calcium. Capacity for 90% or better recycling will continue to be the goal of TSMC Arizona even as the campus expands. Part of a larger investment in Arizona’s burgeoning semiconductor industry Construction of the IRWP continues TSMC Arizona’s infrastructure development at its Phoenix location, where the company plans to invest a record-setting $165 billion in domestic chip production capabilities. But the facility’s economic impact extends far beyond direct cost savings to include operational resilience and environmental leadership. As semiconductor manufacturing continues to expand in water-constrained regions, advanced recycling technologies are essential for sustainable growth. TSMC’s approach may influence industry standards and regulatory frameworks for industrial water management and provide valuable data for other semiconductor manufacturers considering similar investments in water recycling infrastructure.