Artificial intelligence is thirsty: water is the most traded commodity in the world

All the new technologies that surround us use semiconductors in the manufacture of microchips, integrated circuits and diodes. In the production of semiconductors, a medium-sized factory consumes as much water as a city of 58,000[1] inhabitants. Water is the most "traded" raw material in the world. The "virtual water trade" is 400 times greater than that of oil. ChatGPT drinks half a litre of water for every 20 commands. Data centres use water mainly for cooling, while in a semiconductor factory water is an important component of almost every part of the manufacturing process.

The following figures summarise the annual water consumption of the biggest players in data centres and semiconductors. In other words, how much water they consume. Many of these factories are located in drought-prone areas.

Source: Bluefield Research, Bloomberg, JP Morgan, Semiconductor Digest

Investment opportunities for 110-180 billion US dollars

In a growing semiconductor market, the availability of water is not only a critical risk factor that must be considered, but can also provide market opportunities for suppliers offering water treatment solutions with different quality characteristics. The investment in a new semiconductor factory can amount to tens of billions of dollars. The largest share is accounted for by investments in equipment, followed by building construction. Experts estimate that private investment in new semiconductor factories worldwide will reach around 2.27 billion US dollars. Investments in water-related infrastructure account for an estimated 110 to 180 billion US dollars.

Source: Semiconductor Industry Association, company reports, JP Morgan

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