Evaluating economic effects of semiconductor manufacturing in water-limited regions

High-volume semiconductor manufacturing (HVSM) with high demands for freshwater is often located in regions with limited water resources. This nexus of water demand and water scarcity has raised concerns among municipal governments, prompting several to consider water supply restrictions as they plan for economic growth and development. Drawing upon water-use data and economic valuations of land use from Chandler, Ariz., this study compares the fiscal effect of HVSM with three alternative water uses: office, retail, and general manufacturing. Normalizing the economic benefit to net water use (after reclamation) has a marked effect on the fiscal consequences of water uses. The effects generated by mostly nonconsumptive water uses-e.g., HVSM and general manufacturing-increase significantly relative to less water-intensive but more consumptive water uses. Results showed that water-intensive land uses need not be avoided in communities where water is scarce, provided that the community has the facilities to reclaim the wastewater.