Perspectives from ISB

India has emerged as a promising global semiconductor chip manufacturing contender harbouring vast growth potential. However, realising this potential hinges on various critical factors, including power supply, access to energy-grade silicon, robust chip design capabilities, talent, and perhaps most significantly, meeting the water supply requirements. Semiconductor manufacturing is notorious for its immense water consumption of millions of gallons daily. We delve into India’s readiness to address the water demands of the semiconductor industry, exploring governmental initiatives, concerns surrounding water scarcity, and potential solutions for sustainable water management.

Semiconductor Manufacturing – a Water-Thirsty Game

Water consumption in semiconductor fabrication plants (also known as fabs) is mainly driven by process-related activities, which account for approximately 75% of the total water usage. These activities involve producing ultra-pure water (UPW), facility scrubbers, and cooling towers. Generating UPW is a complex and power-intensive process. While fabs often have systems for UPW reclamation, the rates vary across different fabs and processes.

Depending on the manufacturing process’s complexity and the fabrication facility’s size, a fab can consume millions of gallons of water daily. A semiconductor manufacturing facility may require over five million gallons of UPW daily. To produce this pure water, at least eight million gallons of city water daily are needed.

Indian States Eyeing Semiconductor Manufacturing

Several Indian states, including Gujarat, Madhya Pradesh, Karnataka, Odisha, Telangana, Andhra Pradesh, Tamil Nadu, and Uttar Pradesh, have shown keen interest in attracting semiconductor manufacturing facilities.As per the Central Water Commission of India’s report, the country is already experiencing water stress, with a per capita water availability of 1486 cubic meters (m3) per year. Disturbingly, projections indicate that by 2051, this availability is expected to decline further to 1228 m3 per year, intensifying the water stress situation. According to the Falkenmark Water Stress Indicator, when the per capita availability of water is less than 1700 m3, it is considered a water-stressed condition. If the per capita availability falls below 1000 m3, it is categorised as a water scarcity condition. Currently, the agricultural sector is the largest consumer of water, accounting for 70% of water abstractions nationwide. However, there are also significant increases in water demand anticipated from the domestic, industrial, and energy sectors. Against this backdrop, establishing semiconductor fabs in India necessitates improved water management practices that address the diverse water needs for domestic use, industry, and irrigation. India’s national water policy is designed to tackle these challenges by promoting sustainable and rational water usage.

In response to the pressing issue of water stress, seawater desalination initiatives have emerged as a promising solution to address India’s water scarcity challenges. Seawater desalination is a process that separates saline seawater into fresh water and concentrated brine. For example, Gujarat has led by commissioning the country’s first desalination plant in Dahej, which has a daily production capacity of 100 million litres of fresh water. Tamil Nadu has also made significant strides in this area, implementing multiple desalination projects, including two seawater desalination plants in Chennai. These plants have a combined capacity of 200 million litres of water daily.

Andhra Pradesh is just a little behind, with ambitious plans to establish a desalination plant in Krishnapatnam to produce 100 million litres of water daily. Recognising the situation’s urgency, even Karnataka, one of India’s most water-stressed states, has shown interest in pursuing desalination initiatives to alleviate their water scarcity issues. These efforts highlight the increasing importance of seawater desalination as a viable solution to address water scarcity in India.

Need To Look Beyond Water Desalination for Long-Term Gain 

India stands at a critical juncture where the decisions made today will shape our water security for generations. Thus, in our pursuit of self-reliance, we must prioritise a secure future in terms of water resources. We must acknowledge that relying exclusively on seawater desalination projects to fulfil water requirements in the semiconductor industry could present challenges and be an unsustainable solution, particularly in light of climate change projections. Additionally, the substantial capital investments associated with desalination plants and semiconductor fabs raise concerns about sustainability and economic feasibility.

Taiwan’s experience with droughts in 2021 and 2023 is a stark reminder of the risks of changing water patterns. It highlights potential water security challenges for the semiconductor industry. Taiwan’s government has opted to redirect the limited water supply away from agriculture to prioritise the semiconductor industry, specifically rice cultivation. To compensate farmers for this shift, subsidies are being offered to encourage them to keep their farms fallow. India should carefully evaluate the semiconductor industry’s current and future water demands to ensure long-term viability while exploring alternative approaches beyond desalination.

We must also prioritise measures such as water conservation, reuse, recycling, diversification of water sources, and rainwater harvesting, considering current and future water demands and potential changes due to climate change. By adopting a comprehensive approach encompassing these strategies, India can mitigate risks, reduce water consumption, and ensure a water-secure future for everyone.

About the author:

Ishaan Kochhar is a Research Lead at Blue Sky Analytics, a Climate-Tech start-up harnessing satellite data and Artificial Intelligence for environmental monitoring. He is also a Public Policy student specialising in Technology and Policy at the Takshashila Institution. He began his career at Defence Research Development Organisation as a Junior Research Fellow and later worked at International Centre for Integrated Mountain Development, Nepal.

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