Here’s why TSMC and Intel keep building foundries in the Arizona desert | WHAT REALLY HAPPENED X-Frame-Options: SAMEORIGIN

Here’s why TSMC and Intel keep building foundries in the Arizona desert

Two of the world's leading chip manufacturers—Intel and TSMC—are increasing their US-based manufacturing presence by building new plants in Arizona.

Chip foundries are critically dependent on water, and Arizona is one of the driest states in the nation. Arizona gets only 13.6 inches of annual rainfall (compared with 50-60 inches in most of the Deep South, or 30.3 inches average for the USA as a whole). But as Forrester research director Glenn O'Donnell told CNBC, chip-fabrication plants are similar to indoor swimming pools—"you need a lot to fill it, but you don't have to add much to keep it going."

Counterintuitively, the famously thirsty industry can even improve the local water supply due to a focus on reclamation and purification—Intel has funded 15 water restoration projects in the Grand Canyon State with a goal of restoring 937 million gallons per year, and it expects to reach net positive water use once the projects are completed.

What Arizona lacks in water, it makes up for with overall stability—the state is very seismically stable and does not suffer from hurricanes, with low risks of other natural disasters such as tornadoes to boot. Building chip fabs without such guarantees is possible—for example, Intel has a large presence in Oregon—but chip fabricators on the West Coast must take extreme isolation measures, which Arizona plants don't require.