Taiwanese semiconductor manufacturing giant Taiwan Semiconductor Manufacturing Company (TSMC) has broken ground on a water reclamation project to support water recycling efforts at its north Phoenix, Arizona, production plant.

According to reporting from BizJournal, the 15-acre Industrial Reclamation Water Plant (IRWP) is expected to reach operational status in 2028. The IRWP will convert wastewater into high-purity water necessary for usage in TSMC fab sites.

“One of the many reasons we chose Phoenix for our US operation was the state’s and city’s thoughtful and thorough planning, including a water supply plan for 100 years,” Rose Castanares, president of TSMC Arizona, said in a statement. “We know that water is a constant concern in the region. We will be a responsible corporate neighbor in our use of natural resources, including water.”

It will initially have a water recycling rate of around 85 percent, with a goal to achieve 90 percent. Currently, the company’s water resource center has an efficiency rate of 65 percent, converting industrial wastewater for use in the company's operations.

Chip fabrication requires “ultrapure” standard water to wash away any microscopic particles that could lead to defects in semiconductor wafers. According to TSMC, the project will be designed to achieve “near-zero liquid discharge,” allowing the company to reuse almost all of the water it uses in its operations.

Currently, TSMC’s first fab in Phoenix consumes approximately 4.75 million gallons of water daily. When constructed, the IRWP project is expected to reduce that demand to less than 1.2 million gallons per day.

The company has two other fabs at the site, one of which recently completed construction, and another where TSMC recently broke ground. Combined, the three fabs are expected to require 17.2 million gallons of water per day when running.

An environmental review by TSMC for its Arizona fabs reported that it had signed a development agreement with the city of Phoenix for access to 11.4 million gallons of water per day. According to the company, a revised agreement would need to take into account regional water demands, allowing for the required water supply while maintaining the city’s water security.

"The IRWP at the TSMC site aligns economic growth with Phoenix's water security commitments, providing an important example of the type of high-value, sustainable investments that are possible,” Kate Gallego, mayor of Phoenix, said in a statement. “By recycling and conserving water at this scale, we support advanced manufacturing and the good jobs that come with it, protect our desert environment and neighborhoods, and deliver a resilient future for generations to come.”

The semiconductor firm has invested more than $65 billion in the three Phoenix fabs. The company doubled down on its investment in the US, announcing plans back in March to invest up to $100 billion into the US chip manufacturing industry.