TSMC massive water demand raises concerns in Japan
The Hidden Cost of the Digital Age: A Community Working to Sustain Semiconductor Production
When we enjoy the convenience of smartphones, artificial intelligence, and other digital technologies, it is easy to overlook the resources that make them possible. In one part of Japan, however, residents are confronting an important question: what are the environmental costs behind the digital age?
After miles of farmland, a huge white-walled facility rises from the landscape in Kikuyo, Kumamoto Prefecture. The plant belongs to Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker. TSMC chose Kumamoto as part of a broader effort to diversify semiconductor production beyond Taiwan, which currently accounts for around 70% of the world's advanced chip manufacturing. Concerns that rising tensions between Taiwan and China could disrupt global chip supplies have prompted governments around the world to compete for investment from leading semiconductor companies.
Japan has strongly supported TSMC's expansion, providing subsidies totaling more than 1 trillion yen (approximately $6.17 billion). The company's first factory began mass production at the end of 2024, while a second facility is already under construction nearby.
Kumamoto is often called the “land of fire” because of its volcanic history, but it is also known as the “land of water.” Layers of porous volcanic deposits left by Mount Aso allow rainwater to seep underground, creating abundant groundwater reserves. Today, roughly 80% of the prefecture's household water supply comes from groundwater.
That resource is critical because semiconductor manufacturing requires enormous quantities of water for cleaning wafers and cooling equipment. According to TSMC, its facilities can consume up to 30,000 tons of water per day. Although three-quarters of that demand is met through recycled water, the remainder comes from groundwater. In 2025 alone, the company drew approximately 2.5 million tons from underground sources.
To help offset this consumption, local farmers have taken on an unusual role: replenishing the groundwater supply. Following TSMC's announcement in 2021 that it would build a factory in Kumamoto, concerns emerged among residents that increased industrial use could threaten regional water resources. In response, farmers in the Seta district of neighboring Ozu Town began flooding rice paddies during the winter months, allowing water to infiltrate the soil and recharge underground aquifers.
Recognizing the importance of groundwater conservation, the prefectural government revised local guidelines in 2023. Businesses are now expected to replenish groundwater in amounts equivalent to their usage through initiatives such as paddy flooding. The Kumamoto Groundwater Foundation coordinates these efforts across six municipalities, with financial support from participating companies, including TSMC.
According to TSMC, the amount of groundwater and other water resources replenished through these agricultural projects in fiscal 2025 exceeded three times the volume the company pumped from the ground.
Despite these achievements, challenges remain. The 13 farmers participating in the Seta district project have an average age of 74, and maintaining the flooded paddies requires demanding winter labor. Tasks such as clearing fallen leaves and managing water levels become increasingly difficult as the farming population ages.
“Everyone is worried about how long we can keep doing this,” said 77-year-old farmer Michio Koushi.
The relationship between TSMC and local farmers highlights a delicate balance. The semiconductor industry brings jobs, investment, and population growth to the region, while farmers provide an essential environmental service by helping replenish the water that production depends on.
That balance may face new pressure in the future. In February, TSMC announced that its second Kumamoto factory will manufacture even more advanced semiconductors, including chips expected to support artificial intelligence data centers. Water consumption at the new facility is projected to be more than three times current levels.
TSMC says it is committed to becoming a company rooted in the local community and contributing to regional development. Yet for farmers such as 72-year-old Tomotsugu Segawa, true sustainability will require closer collaboration.
“The challenge is how to continue creating groundwater while protecting farmland,” he said. “If the companies that use groundwater think about that together with us, then we can truly achieve coexistence and shared prosperity.”
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