Farmers see water cuts as semiconductor plants expand in Arizona

COOLIDGE, AZ (3TV/CBS 5) - Caywood Cotton Farms has been in the Caywood family for five generations. “My granddad bought this farm in 1930,” said Nancy Caywood, as she looked out at a dusty field. “You know, it’s always a tough business. We’re dependent on weather. We don’t know what Mother Nature is going to throw at us. Right now, she’s throwing a drought at us,” said Caywood.

The farm gets its water from San Carlos Lake. And that water allocation dried up earlier this year. Even after the wet summer, it is still not enough to grow the cotton and alfalfa that normally turns the brown fields green.

“There’s about 80 acres out here and because of drought, we haven’t been able to plant it,” said Caywood. She says it could cost her family its livelihood and do the same to lots of other family farmers.

All over Pinal County, you see the signs of the drought: empty fields, abandoned cotton gins and it may get worse. The water allocation for Pinal County farmers from the Central Arizona Project is set to drop in January. It could disappear altogether in 2023.

But north of Pinal County’s dusty fields, an industry that also relies on large amounts of water is thriving and expanding. Two giant semiconductor projects are getting underway. Intel is expanding in Chandler and Taiwan Semiconductor is building its own microchip plant in north Phoenix. It’s an industry that has had a sordid history in the Valley of the Sun.

“It is a legacy in the Phoenix area that we are still living with today,” said Dennis Shirley, who owns and runs Synergy Environmental, LLC.

He says the older microchip plants that employed thousands in Phoenix in the 1950s, 1960s and 1970s were major polluters. They contaminated groundwater with cancer-causing solvents. But Shirley says modern-day microchip plants are a far cry from their polluting predecessors. “Oh, they’ve learned their lessons. I believe these companies are on top of all of those issues.”

The plants do still use a lot of water, but people in the business community say the tradeoff is worth it. “These two companies could have produced these chips anywhere in the world and they selected greater Phoenix,” said Chris Camacho, who is the president of the Greater Phoenix Economic Council.

Camacho says the projects will create thousands of high-paying jobs and tens of thousands of indirect jobs. “These kinds of uses in terms of providing high-quality jobs in this modern economy are critically important,” said Camacho.

Taiwan Semiconductor is spending $12 billion on a microchip manufacturing complex at Interstate 17 and the Loop 303. The company weathered a major drought in Taiwan this summer. A spokesperson for Taiwan Semiconductor wrote, “At our estimates, a drop of water is reused 3.5 times in our manufacturing process and we achieve a 90% water recycling rate.”

In Chandler, Intel is spending $20 billion to build two new factories. The company used 5 billion gallons of water at its Chandler operations last year. But the company cleaned and recharged 80% of the water. “Intel has been investing, making significant investments in water conservation for well over the last two decades,” said Linda Qian, who is the communications director for Intel Arizona.

Qian says the company sponsors projects that add water here in the Valley and other parts of the state. “In 2020, we funded projects that restored more than 600 million gallons of water to support Arizona watersheds,” said Qian.

Back in Pinal County, Nancy Caywood says she understands the need to attract big business to Arizona. But when she was asked if she thinks farmers are getting the same respect from state lawmakers as other big businesses, her answer was no.