Compare semiconductor manufacturing locations in two stages: first screen for operational viability, then build site-specific construction and operating-cost estimates for the viable candidates. Water, power, and logistics are essential, but they must be evaluated alongside permitting, legal compliance, taxes, site conditions, and access to suppliers and customers. The right weighting depends on the facility’s activity, process, scale, and risk tolerance; there is no universal winning location or scoring formula.
Start by defining the facility and screening viable locations
A wafer fab, a research and development site, an assembly, test, and packaging operation, and a supplier facility do not necessarily need the same infrastructure or ecosystem. Define the intended activity, process, scale, utility requirements, supply-chain links, and acceptable risks before comparing places.
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The Semiconductor Industry Association (SIA) recommends identifying viable locations before calculating and comparing detailed construction and operating estimates. Its factors include infrastructure, logistics, permitting, legal compliance, taxes, and proximity to suppliers and customers. Use that first screen to exclude candidates that cannot credibly meet operating requirements; reserve detailed engineering and cost comparisons for the remaining sites. SIA’s investment report
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Water diligence is more than checking whether a municipality has a water source. For each candidate, establish the reliability, quality, available capacity, and cost of supply, then assess drought exposure, wastewater treatment, discharge constraints, and realistic opportunities to reuse or reclaim water.
- Supply: Request utility rates, available capacity, and project-specific service commitments. Check watershed conditions and drought records against the facility’s expected demand.
- Treatment and discharge: Verify that treatment capacity and permits can accommodate the proposed operation, including applicable wastewater and discharge requirements.
- Reuse: Ask what water can practically be recovered or recycled in the proposed design, and what treatment, infrastructure, and approvals that would require.
U.S. Department of Commerce announcements describe water conservation and wastewater reclamation at Polar Semiconductor and planned recovery and recycling measures at Entegris. These are examples of project-level plans or practices, not standard performance benchmarks for every facility. The available sources do not establish a universal semiconductor water-consumption figure. Commerce announcement on Polar Semiconductor; Commerce announcement on Entegris
Compare power reliability as well as price and source
For a continuous operation, a low electricity price is not enough. Compare grid stability, available capacity, the cost and terms of service, outage history, restoration performance, resilience arrangements, and access to lower-carbon electricity. Request current evidence from the local utility for the specific site rather than inferring service quality from a region-wide reputation.
Rank #2
The SIA warns that “Even a ‘micro power outage’ can cause substantial operational losses.” Treat reliability and recovery planning as core operating requirements, and examine the utility’s service commitments and interconnection schedule alongside tariffs and electricity mix. Evaluate backup or other resilience arrangements for the proposed facility rather than assuming that a standard solution fits every site. The cited sources do not establish a universal power-demand benchmark for semiconductor facilities. SIA overview of the semiconductor industry
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Evaluate logistics as a network, not a distance
Map the routes needed to bring in materials and equipment and move finished products to customers. Assess transport and communications infrastructure, access to relevant suppliers and customers, and the reliability of each route. Where cross-border movement matters, include customs and border processes. A short distance to a port, airport, or customer does not by itself show that a supply chain is dependable.
- Map actual suppliers, customers, and required materials against feasible transport modes and routes.
- Check route frequency, capacity, transit reliability, and likely disruption points.
- Include customs procedures where relevant and assess communications infrastructure for the facility’s operating needs.
- Compare disruption scenarios, including how alternative routes or modes would affect inbound supplies and outbound products.
The SIA identifies logistics, infrastructure, and proximity to suppliers and customers as location factors. Their relative importance depends on the particular operation and its supply chain. SIA’s investment report
Use one evidence checklist for every candidate
Apply the same comparison axes to each site, but do not treat them as a source-provided scorecard. Gather site-level evidence and weight the factors to match the facility being planned.
Rank #4
| Dimension | What to compare | Evidence to collect |
|---|---|---|
| Water | Supply reliability and quality, capacity and cost, drought exposure, treatment and discharge constraints, reuse potential | Utility commitments and rates; watershed and drought records; treatment capacity; permits; project-specific demand and reuse design |
| Power | Grid stability and capacity, outage and restoration history, cost, redundancy, resilience, electricity mix | Utility service commitments; interconnection schedule; tariff; outage and restoration data; backup and resilience plans |
| Logistics | Inbound materials and equipment, outbound product routes, supplier and customer access, transport reliability, communications | Route and mode analysis; customs processes where relevant; supplier and customer mapping; disruption scenarios |
| Site and operations | Construction conditions, land and utilities, disaster exposure, permitting, regulatory compliance, taxes | Engineering diligence; hazard assessment; permitting schedule; cost estimates; local regulatory review |
| Ecosystem | Suppliers, customers, research and development partners, education partners, talent | Current supplier and customer footprint; workforce and training capacity; partner commitments |
Site-specific engineering, utility information, permits, transport analysis, and local regulatory review turn this checklist into a defensible comparison. Keep assumptions consistent between candidates so that differences in estimated construction or operating costs reflect actual site conditions rather than mismatched scopes.
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The SIA reported that research and capital expenditure together accounted for over 40% of global semiconductor sales in 2023. That industry-wide figure is not a per-fab construction budget, an operating-cost share, or a location-specific estimate. It should not be used to estimate a candidate site’s costs. SIA overview of the semiconductor industry
Best Value
Likewise, company announcements about water conservation, reclamation, or recycling show what particular projects report or plan; they do not establish universal requirements or expected performance for other fabs. Compare each candidate using current local utility, water, transport, permitting, cost, and risk evidence.
Build a site-specific comparison, not a universal ranking
After screening for viability, prepare detailed construction and operating estimates for each remaining candidate. Make the assumptions visible, account for infrastructure and compliance as well as utility and logistics costs, and test how differences in reliability or disruption risk could affect operations. Weight water, power, logistics, site conditions, and ecosystem according to the intended facility and its risk tolerance. The cited sources identify relevant factors but do not prescribe a universal scoring formula or establish that one region is best for every semiconductor operation.
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