Water-intensive industries spring up in Maricopa County during the worst drought in 1200 years

by Robert Marcos, photojournalist

American consumers are well aware that their electric bills have been going up, in some areas dramatically.1 The construction of AI data centers have been widely blamed for this, even though (at present) they’re responsible for only a small part of the increase. In Phoenix and Chandler Arizona – two of the nation’s hottest and driest cities – enormous factories are being built to fabricate the semiconductors used in those data centers, and they’re widely expected to drive up costs that local residents pay for both electricity and water. Since the increased costs are shared by all rate payers, it can be said that residents of Maricopa County who pay for water and power are subsidizing the cost of water and power used by these new industries.7

Water Usage Concerns

TSMC’s Phoenix plant is projected to consume over 17 million gallons a day. Critics from groups like Chip Coalition United argue this adds pressure to local supplies, potentially raising municipal costs despite recycling pledges (e.g., TSMC’s near-zero discharge goal). Phoenix officials counter with investments like a 70,000 acre-foot recycling facility by 2030 to offset shortfalls.4

The new Intel semiconductor plant in Chandler, Arizona (part of expansions at the Ocotillo campus), obtains its water from the City of Chandler. This supply is drawn from the Colorado River, Verde River, Salt River, and some groundwater sources.8 Intel heavily recycles water at its Chandler facilities, treating up to 9.1 million gallons daily on-site and returning much of it to the city or aquifer via partnerships like the Ocotillo Brine Reduction Facility. The company achieves high reuse rates (over 90% in some reports), minimizing net freshwater demand.9

Power Demand Impact

TSMC’s facility alone could require electricity for 300,000 homes, straining Arizona’s grid and emitting gases rivaling 32,000 households. Intel’s Chandler expansions add further load, prompting calls for full environmental reviews. No sources confirm explicit resident bill hikes yet, but increased grid demand often leads to higher utility rates over time.5

Manufacturer’s commitment to recycling water

TSMC and Intel’s semiconductor plants in Arizona address their substantial ultra-pure water needs for chip fabrication—primarily wafer rinsing and cooling—through advanced on-site recycling facilities designed for Arizona’s arid conditions. TSMC Arizona currently recycles about 65% of its water for cooling towers and scrubbers via in-house systems, with a new 15-acre Industrial Reclamation Water Plant (IRWP), groundbreaking in 2025 and operational by 2028, set to treat industrial wastewater back to ultrapure standards, targeting 85-90%+ recycling rates to achieve near-zero liquid discharge and minimize fresh municipal water draws. Intel, operating multiple Chandler fabs, already recycles over 80% of water through on-site reclamation plants like its 12-acre Ocotillo facility, purifying used water for reuse in manufacturing, cooling, or aquifer recharge, while pursuing net-positive water goals by 2030 via conservation and restoration. These strategies sharply reduce net consumption, with TSMC’s first fab projected to drop from 4.75 to 1 million gallons daily post-recycling, supporting sustainable expansion amid regional scarcity.6

Sources

  1. Choose Energy: https://www.chooseenergy.com/electricity-rates-by-state/
  2. Bipartisan Policy Center: https://bipartisanpolicy.org/explainer/why-is-my-electric-bill-going-up-understanding-changes-in-electricity-bill-prices-over-time/
  3. InBusiness: https://inbusinessphx.com/technology-innovation/arizonas-semiconductor-boom-sparks-environmental-concerns
  4. Greater Phoenix Economic Council: https://www.gpec.org/blog/water-key-resource-in-greater-phoenix-and-the-semiconductor-industry/
  5. Stand: https://stand.earth/insights/the-climate-cost-of-bidens-semiconductor-buildout-in-arizona/
  6. Construction Owners: https://www.constructionowners.com/news/tsmc-arizona-breaks-ground-on-water-recycling-plant
  7. Bloomberg: https://www.bloomberg.com/graphics/2025-ai-data-centers-electricity-prices/?embedded-checkout=true
  8. UltraFacility: https://www.ultrafacilityportal.io/insights/end-user-insight:-water-strategy-at-intel’s-ocotillo-site
  9. Arizona Disital Free Press: https://arizonadigitalfreepress.com/intel-ocotillo-aws-water-certification/

Leave a Reply