Environment

Why Intel and TSMC are building water-dependent chip factories in one of the driest U.S. states

Published

4 years ago

June 7, 2021

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Electric vehicle being driven through Arizona desert

The biggest semiconductor manufacturers in the world are quickly trying to build new factories as the global chip crisis continues to wreak havoc on a plethora of industries.

U.S. semiconductor giant Intel announced in March that it plans to spend $20 billion on two new chip plants in Arizona. Separately, TSMC (Taiwan Semiconductor Manufacturing Company) said it was going to build a $12 billion factory in Arizona, and chief executive C.C. Wei said Wednesday that construction had already begun.

The Grand Canyon State may not, however, seem like the most obvious place for a chip “foundry” or “fab” since the high-tech manufacturing plants guzzle millions of gallons of water every day.

At present, in the face of climate change, Arizona is facing a deepening water crisis and some of the state’s all-important aquifers have an uncertain future.

Arizona received just 13.6 inches of rainfall on average per year between 1970 and 2000, according to the NOAA National Climatic Data Center, making it the fourth driest state nationwide. Conversely, Hawaii and Louisiana recorded the highest levels of average yearly precipitation in the U.S. over the same time frame, reporting 63.7 inches and 60.1 inches, respectively.

“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,” Alan Priestley, vice president analyst at tech research firm Gartner, told CNBC.

A key consideration of any new construction would most likely be contributions to enhancing the water supply infrastructure, he added.

Glenn O’Donnell, vice president and research director at analyst firm Forrester, told CNBC that chip fabrication plants “recycle water religiously,” adding that it’s a bit like a swimming pool in an enclosed building.

“You need a lot to fill it, but you don’t have to add much to keep it going,” he said. “Also, being in an enclosed space, a lot of the water that evaporates can be captured with a dehumidifier and returned to the pool. The fabs will do similar things with their own water usage.”

Intel notes on its website that it is striving to achieve “net positive water use” in Arizona and that it has funded 15 water restoration projects that aim to benefit the state. “Once fully implemented, these projects will restore an estimated 937 million gallons each year,” the company says.

Beyond water

TSMC and Intel, two of the biggest heavyweights in the chip industry, have chosen to expand in Arizona for several other reasons, according to the analysts.

Intel has had a presence in Arizona for over 40 years and the state is home to a well-established semiconductor ecosystem. Other major chip companies with a presence in Arizona include On Semiconductor, NXP and Microchip.

Intel now employs over 12,000 people in Arizona and the state is home to Intel’s newest manufacturing facility, Fab 42.

As Intel has increased its presence in Arizona, the local universities have “established a strong reputation for semiconductor design courses and research providing a highly-skilled work force for the local semi industry,” Priestley said. “This has helped create an ecosystem of companies to supply the products and services necessary to manufacture chips.”

TSMC will be “able to tap into these resources and [the] ecosystem of supply chain vendors,” Priestley said.

Local tax breaks and incentives “will have played a big part” in the initial site selection, he continued, noting that land availability, land costs, housing costs and the local economy will have also been considered.

Seismically stable

The case for Arizona doesn’t stop there. Its seismic stability and relatively low risk of other natural interference are appealing to chipmakers, O’Donnell said.

“A chip factory cannot shake, not even a microscopic amount,” he said, adding that they set such factories into the bedrock to keep them still. “Even a 0.5 Richter shake can ruin an entire crop of chips.”

That said, Intel does have some chip plants on the West Coast of the U.S., where the ground is more susceptible to earthquakes. The company has a huge presence in Hillsboro, Oregon, for example.

“The West Coast does have fabs but they need to take great measures to isolate the shaking,” said O’Donnell. “They don’t need such drastic measures in Arizona because it shakes a lot less.”

Arizona is also immune from most other natural disasters like hurricanes and wildfires, O’Donnell said.

With its bountiful sunshine, Arizona also boasts “dependable, plentiful and green electrical power,” O’Donnell said, calling out Salt River Project as a local power utility in the Phoenix area that caters to big consumers of power. A chip foundry needs power on the scale of a steel plant, according to O’Donnell.

Ultimately, it largely boils down to politics.

“The political machinery in Arizona is determined to make the state business friendly,” said O’Donnell. “More business equals more and better jobs equals more votes to the power brokers. The recent announcements by Intel and TSMC come via a lot of help from federal, state and local government entities.”

Environment

Wheel-E Podcast: 65 MPH ONYX moped, lightweight Dahon e-bikes, more

Published

3 hours ago

July 4, 2025

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Wheel-E Podcast: 65 MPH ONYX moped, lightweight Dahon e-bikes, more

This week on Electrek’s Wheel-E podcast, we discuss the most popular news stories from the world of electric bikes and other nontraditional electric vehicles. This time, that includes a new ONYX RCR 80V electric moped, new lightweight e-bike motors, Aventon’s powerful update, California cops catching illegal e-bike riders with drones, a super lightweight new e-bike from Dahon, and more.

Today’s episode is sponsored by CYCROWN, an e-Bike company born from a passion for cycling. Its lineup now includes the new CYCROWN Dremax – a high-performance urban commuter e-bike now on sale in the US and Canada. Use Electrek50 to save $50 off your new eBike when you order.

The Wheel-E podcast returns every two weeks on Electrek’s YouTube channel, Facebook, Linkedin, and Twitter.

As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.

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After the show ends, the video will be archived on YouTube and the audio on all your favorite podcast apps:

We also have a Patreon if you want to help us to avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.

Here are a few of the articles that we will discuss during the Wheel-E podcast today:

Here’s the live stream for today’s episode starting at 9:00 a.m. ET (or the video after 10:00 a.m. ET):

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Environment

China’s nationwide ‘cash for clunkers’ trade-in program causing huge e-bike boom

Published

8 hours ago

July 4, 2025

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China's nationwide 'cash for clunkers' trade-in program causing huge e-bike boom

While much of the Western world is still figuring out how to get more people on electric bikes, China just flipped a switch, and the results are staggering. Thanks to a generous nationwide trade-in program rolled out around six months ago, China has seen an explosive surge in electric bicycle sales, with over 8.47 million new e-bikes hitting the road in the first half of 2025 alone.

The program, which offers subsidies to riders who trade in their old, often outdated electric bikes for newer, safer, and more efficient models, has sparked a new e-bike sale boom in a country already dominated by e-bike travel. In major provinces like Jiangsu, Hebei, and Zhejiang, over one million new e-bikes were sold in each region in just six months. That’s a tidal wave of e-bike sales.

The incentives vary depending on location and the model being traded in, but for many consumers, the subsidies cover a substantial portion of a new e-bike’s price – enough to turn a “maybe next year” purchase into a “right now” upgrade. And these aren’t just budget bikes either. The program has driven demand for higher-quality models with better batteries, safer braking systems, and more reliable electronics, accelerating both adoption and innovation across the industry.

The move has proven successful in replacing the millions of older models with lower-quality lithium-ion batteries that had posed safety risks around the country. Instead, China has pushed for higher-quality lithium-ion batteries, a return to a newer generation of higher-performance AGM batteries, and even interesting new sodium-ion battery options.

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Most e-bikes in China look more like what we’d consider seated scooters

According to China’s Ministry of Commerce, more than 8.4 million consumers have participated in the e-bike trade-in program so far, contributing to a sales increase of 643.5% year-over-year and more than doubling sales month-over-month. Meanwhile, production of new electric bicycles rose by nearly 28%, as manufacturers scrambled to meet demand. The sales boosts have already been seen in the financial reports of major industry players like NIU.

And it’s not just the big players benefiting – over 82,000 small independent e-bike dealers reported average sales increases of ¥302,000 (around US $42,000), giving a serious boost to local economies.

What’s particularly striking here is how fast this happened. The program was officially launched late last year as part of a broader effort to stimulate domestic consumption and phase out outdated vehicles and appliances. But while most analysts expected gradual growth, the e-bike sector responded much more quickly. In less than a year, the trade-in subsidies have reshaped the electric bicycle market, creating a consumer-driven boom that shows no signs of slowing.

For those of us watching from outside China, it’s hard not to wonder what might happen if other countries tried something similar. While most families in Chinese cities already own an electric bike and thus see this as an opportunity to trade it in for a newer model, Western countries like the US are still figuring out how to stimulate commuters into buying their first e-bike.

It’s too soon to know exactly how long the boom will last or whether the momentum will carry into 2026 and beyond. We’ve seen bicycle industry bubbles grow and burst before. But one thing’s clear: with the right incentives, even modest ones, it’s possible to ignite real, large-scale change. China just proved it with nearly 8.5 million new e-bikes to show for it.

And if you’re wondering what it looks like when a country takes electric micromobility seriously, this is it.

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Environment

Day 1 of the Electrek Formula Sun Grand Prix 2025 [Gallery]

Published

15 hours ago

July 3, 2025

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Day 1 of the Electrek Formula Sun Grand Prix 2025 [Gallery]

electrek formula sun grand prix solar car track event race

Today was the official start of racing at the Electrek Formula Sun Grand Prix 2025! There was a tremendous energy (and heat) on the ground at NCM Motorsports Park as nearly a dozen teams took to the track. Currently, as of writing, Stanford is ranked #1 in the SOV (Single-Occupant Vehicle) class with 68 registered laps. However, the fastest lap so far belongs to UC Berkeley, which clocked a 4:45 on the 3.15-mile track. That’s an average speed of just under 40 mph on nothing but solar energy. Not bad!

In the MOV (Multi-Occupant Vehicle) class, Polytechnique Montréal is narrowly ahead of Appalachian State by just 4 laps. At last year’s formula sun race, Polytechnique Montréal took first place overall in this class, and the team hopes to repeat that success. It’s still too early for prediction though, and anything can happen between now and the final day of racing on Saturday.

Congrats to the teams that made it on track today. We look forward to seeing even more out there tomorrow. In the meantime, here are some shots from today via the event’s wonderful photographer Cora Kennedy.