By: Lacey Suastegui of TSMC
PHOENIX (September 25, 2025) -- TSMC's Arizona’s first three semiconductor fabs represent a $65 billion commitment to advanced chip production in the United States. Central to this expansion is an Industrial Water Reclamation Plant (IRWP) designed to achieve near-zero liquid discharge—a technical feat for water management standards in semiconductor manufacturing while addressing regional water scarcity concerns.
Current Water Usage and Recycling Infrastructure
TSMC Arizona currently operates at a 65% water recycling rate, processing wastewater through existing treatment systems before discharge back to Phoenix's municipal system. Lacey Suastegui, a 20-year construction industry veteran and Project Manager at TSMC Arizona, explains the complexity of water use in semiconductor manufacturing: "We use water in a number of areas within the factory. Primarily, it's used for cleaning wafers, but we also use it in what we call heat transfer."
The semiconductor fabrication process demands ultra-pure water for wafer cleaning to prevent defects that could compromise chip functionality. This requirement creates a cascade of water treatment needs that generate significant volumes of wastewater requiring further processing.
"Using water in the cleaning process requires very high purity. So, we go through and extract things out of the water so that the water that touches the wafer doesn't cause defects," Suastegui said. "We use something known in the industry as ultra-pure water. The process to create UPW separates contaminants through the reject water, leaving behind clean water.”
Water consumption in semiconductor manufacturing is substantial. According to the Semiconductor Industry Association, producing a single 300mm silicon wafer can require between 2,200-3,000 gallons of ultra-pure water. With TSMC Arizona targeting production of approximately 20,000 wafer starts per month when fully operational, the facility's water requirements represent a significant demand.
Technical Specifications of the Planned IRWP
TSMC's Industrial Water Reclamation Plant aims to achieve 90% water recycling efficiency through advanced treatment technologies upon completion, with an anticipated 85% efficiency at launch. The system employs multiple processes familiar to municipal water treatment but scaled for industrial semiconductor manufacturing requirements.
"We’ll take that not-so-clean water, and we'll run it through a process called reverse osmosis. In your house, you might have a reverse osmosis machine or filter - that little tap that sticks up on the countertop, and you can take clean water out. It's just that on a very, very large scale," Suastegui explained.
The IRWP also utilizes ion exchange technology for removing specific contaminants. "We also use things called ion exchange. You might have a water softener in your house—you remove calcium and magnesium out of your water so your taps don't get clogged up with scale. That's another part of the process that we use in the water treatment process."
Near-zero liquid discharge technology concentrates contaminants into manageable waste streams while maximizing water recovery. The process "essentially removes all the salts out of the water so the water can then be reused back in the process," according to Suastegui.
Timeline and Construction Challenges
"We've broken ground this year and expect to have the plant operational in 2028," Suastegui said.
The timeline takes into account various factors, including the need to analyze actual wastewater characteristics from operating facilities. "We couldn't fully design the plant until we had good representative wastewater coming out of the fab to understand what we were working with," Suastegui explained.
The IRWP is designed to serve TSMC's expanding Arizona campus. "We're building the industrial water plant to serve not just the first factory, but the second factory as well. It'll provide services to both fabs as the second fab comes up," Suastegui noted.
Plans include future expansion capabilities. "In the near future, we’ll start design on an IRWP expansion in order to support the third fab and beyond. The vision is to be at 90% or better recycling at the start when future fabs come online."
Regional Water Supply Context
TSMC's water management strategy operates within Arizona's complex water supply framework. "We buy all of our water from the city of Phoenix, and we discharge all of our water back to the city of Phoenix. We get a monthly invoice, just like you would get as a Phoenix citizen," Suastegui said.
Arizona's water supply relies on multiple sources, providing some resilience against drought conditions affecting the Colorado River. "The state gets water not just from the Colorado River, which is shared with six other states, but we also have an in-state watershed called the Salt and Verde River watershed," Suastegui explained. "Roughly half of the water comes to the state from the Salt River and Verde River watersheds."
Both Phoenix and Arizona have established long-term water security planning. "The city and the state have done an amazing job of planning for the future. They've done a lot of water banking up to this point, and they've got a 100-year assured water supply plan in place both in the city and the state," according to Suastegui.
Economic Impact and Resource Management Benefits
The IRWP provides both operational and economic advantages for TSMC's Arizona expansion. Higher water recycling rates reduce dependence on municipal water supplies while decreasing wastewater discharge volumes.
"It also provides us some more resiliency because if we're not using as much water, we're less impacted by potential drought situations and water rationing and things like that, if that were ever to come to pass," Suastegui said.
The technology also supports TSMC's broader sustainability commitments. The company has pledged to achieve net-zero emissions by 2050 and reduce water consumption intensity. Advanced water recycling contributes to these goals while demonstrating environmental leadership in the semiconductor manufacturing industry.
Looking Ahead: Impacts and Beyond
TSMC Arizona's Industrial Water Reclamation Plant represents both an engineering challenge and a strategic investment in operational sustainability. The facility's 90% recycling target addresses regional water concerns while supporting the company's $65 billion investment in three fabs and future expansion.
The 2028 operational timeline reflects the complexity of implementing near-zero discharge technology at the semiconductor manufacturing scale. Success will depend on the effective integration of multiple treatment technologies while maintaining the ultra-pure water quality required for advanced chip production.
The IRWP's economic impact extends beyond direct cost savings to include operational resilience and environmental leadership. As semiconductor manufacturing continues expanding in water-constrained regions, advanced recycling technologies become essential for sustainable growth.
TSMC's approach may influence industry standards and regulatory frameworks for industrial water management. The facility's performance will provide valuable data for other semiconductor manufacturers considering similar investments in water recycling infrastructure.