Semiconductor manufacturers Intel and TSMC seek new housing for their plants in Arizona. Amid the looming global chip crisis, processor makers are struggling to cope up with the demand of the people who are relying on the technology inside their homes.

Intel, TSMC Found New Semiconductor Plant Location

Intel, TSMC to Construct Semiconductor Plants in Arizona--Why in Water-Dependent State?
(Photo : Christoph von Gellhorn)
Intel and TSMC is constructing the new chip plants in Arizona.

The US-based chip maker, Intel has previously laid out its plans to construct two new factories amounting to $20 billion in Arizona.

On the other hand, TSMC, which is headquartered in Taiwan has announced that it would build a $12-billion plant in the same location, in partnership with Apple. According to C.C. Wei, the company's chief executive said on Wednesday, June 2 that it has already commenced the building operation of the semiconductor mill. 

What's puzzling about the tech titans is why they chose the arid spot of the Grand Canyon State as the location. The said place is known to be a "super-dry" region. Currently, the state has been struggling with its problem in the water supply, that's why it needs aquifers to sustain it.

"Water is a key element in semi manufacturing, but the infrastructure has been put in place [in Arizona] to ensure adequate supply to meet the industry's current needs," Gartner VP analyst, Alan Priestley said.

Read Also: TSMC takes lead as Samsung bows out of race for Apple A8 chip

Furthermore, Intel and TSMC have potentially chosen the place to improve its water supply while gradually finding a fix to the chip shortage which is seen to persist through 2022.

According to Intel's blog, the company is pushing to reach a "net positive water use" in the state to seek development for Arizona's restoration programs. When the project is already operational, about 937 gallons of water each year will be replenished.

Experts Reveal Why TSMC and Intel Chose Arizona as Chip Hotspot

From CNBC's report on Friday, June 4, analysts shared the reason why the two semiconductor companies selected Arizona for the expansion of their plants.

According to the people who know the situation, Intel has been around in Arizona for over 40 years. Over the past period, the firm has been engaging its semiconductor activities in the state. At the moment, it has deployed more than 12,000 workers in the region.

While the spot is reasonable to be a good spot for chip plants, Arizona could be triggered with several tremors underground. Several earthquakes could hinder the companies' production, that's why they should implement "drastic" measures for that preparation.

Besides seismic events, it is also home to wildfires during the peak of summer. Intel and TSMC could have seen a great potential in this state which would later be a part of their solution to pace the global chip shortage with hope.

On top of that, politics is also playing a major role in this adoption. The companies would want to thrive amid economic crises, and to do that, they need to be friendly to every state that they visit.

Related Article: Global Semiconductor Shortage Won't be 'Resolved' For a Few More Years, Intel CEO Says--How Pandemic Impacts it?

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Written by Joseph Henry

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