Semiconductor Industry Confronts Mounting Water and Sustainability Pressures

The surge in semiconductor manufacturing has created a less obvious boom: an enormous need for ultra-pure water. With billions of dollars pouring into new U.S. chip fabs and domestic production expected to triple by 2032, companies are realizing that water management is not a side project. It is mission-critical.

“Water is actually the largest-volume chemical used in semiconductor manufacturing,” said Paul Westerhoff, a regent’s professor at Arizona State University who studies water sustainability. And the numbers back him up. Producing chips can require as much as 10 million gallons of ultra-pure water every single day. That is more water than 33,000 American households use in a day. This water must be nearly perfect. Even tiny traces of minerals or organic compounds can throw off a chip’s performance or compromise a wafer.

The problem is twofold. Fabs must secure large amounts of water, then turn it into ultra-pure water, often referred to as UPW, stripped of nearly everything except H2O molecules. “We’re talking parts-per-quadrillion purity,” said Prakash Govindan, co-founder of the water-treatment company Gradiant. “Imagine one molecule of impurity in an Olympic swimming pool.” Once that water is used, fabs also have to figure out how to reclaim it, reuse it, or return it safely to the community.

Manufacturers are trying to cut water use in their plants and rethink how water moves in and out of their facilities. Taiwan Semiconductor Manufacturing Co., for example, has invested heavily in reclamation. In 2023, it met its goal of replacing 12 percent of its water supply with reclaimed water. It also opened a new industrial reclaimed-water plant the previous year. Still, the company struggled with overall consumption. Instead of reducing its water use per unit of production, as planned, the number jumped more than 25 percent in 2023.

One of the biggest hurdles is the complexity of wastewater. A single fab can produce 15 to 18 distinct streams of wastewater, each with different contaminants. Some of the trickiest pollutants, like urea from municipal wastewater, simply cannot be removed by standard filtration. TSMC said it had to work with universities and research labs to find ways to remove these stubborn compounds to meet semiconductor-grade requirements.

Because of these challenges, manufacturers often design water-treatment systems into the fab from the beginning. Once operating, they focus on reducing their water footprint both inside the facility and in the surrounding community. Sometimes, fabs treat water beyond what regulations require, then release it to local utilities or recharge it into the groundwater. Intel’s Arizona sites, for example, restore more water to the community than they consume, which helps them qualify as “net water positive.”

Inside the facilities, some water is reused in cooling towers and scrubber systems, which clean chemical vapor and exhaust gases. But recycling water all the way back into UPW remains extremely difficult. As WE&T Magazine noted in June, reclaimed water is rarely purified enough to reenter the UPW loop. Most of it ends up in mechanical systems rather than in direct manufacturing, meaning fabs still rely heavily on local freshwater supplies.

Westerhoff says the industry has not yet cracked the code on turning its own wastewater back into new UPW at scale. Still, progress is happening. Govindan said Gradiant reached a 99 percent recycling rate at a major semiconductor facility, reducing the plant’s need for outside freshwater to just 1 percent.

There is also a long-term risk management range. Companies that treat their wastewater more aggressively reduce their chances of future pollution liabilities. Westerhoff pointed to PFAS chemicals, which the industry once used widely. Even though manufacturers phased them out years ago, new EPA rules now scrutinize them. Treating water at the source protects companies from being caught off guard by future regulations.

On top of that, better purification can help fabs recover valuable materials like isopropyl alcohol and minerals such as copper. “Recovering some of that copper really helps the economics,” said Govindan. It turns water treatment from a cost center into part of a circular resource system.

But the biggest challenge remains simple: fabs need to withdraw less water from their watersheds. In Taiwan, where chipmaking dominates the economy, water stress has become a recurring national concern. Govindan noted that while the situation in the U.S. or Europe might not escalate to that level, individual states and cities already feel the strain as new fabs break ground.

Looking ahead, experts say the next frontier is understanding the water footprint of entire supply chains, not just the fabs themselves. “Any of these companies that have complex supply chains are going to try to look toward their suppliers to help them reduce the water footprint of their products,” Westerhoff said. To truly become net water positive, manufacturers will have to think beyond their fences and into the broader communities and industries connected to them.