The Tool Desk
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Power and water deserve parcel-level verification early, not after a preferred state is chosen. Workforce depth, supplier and logistics resilience, construction and permitting readiness, and the net value and conditions of incentives can matter more than a low land price or a headline incentive announcement.
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Start by defining the facility you are actually siting
SelectUSA’s site-selection guide says that “the priority of these factors usually depends on the type of facility being planned.” That is the central rule for a semiconductor location comparison. A front-end wafer fab has a different utility, contamination-control, staffing and capital profile from an assembly, test and packaging plant. A compound-semiconductor operation, materials plant or equipment plant has another profile again.
Classify the facility role
- Front-end wafer fab: wafer process technology, cleanroom requirements, high and continuous electricity demand, ultrapure-water and wastewater systems, complex equipment installation and large technical workforces.
- Compound-semiconductor plant: specialized materials, process gases, equipment and environmental controls that may differ materially from silicon production.
- Assembly, test and packaging operation: different cleanroom, labor, shipping and customer-proximity requirements from wafer fabrication.
- Materials plant: chemical, gas, wafer or other input production, often with hazardous-material handling and a close relationship to downstream customers.
- Equipment plant: manufacturing, integration and field-service needs, with a potentially different mix of engineering, machining, logistics and supplier requirements.
Complete a project profile before collecting location data
Write down the assumptions that every candidate must be tested against:
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- Process technology, products and quality requirements.
- Annual capacity, equipment list, expected ramp and expansion phases.
- Building type, cleanroom area, parcel size, layout and expansion reserves.
- Electric load by phase, voltage, redundancy and acceptable outage risk.
- Water sources, daily and peak demand, treatment, discharge and reuse objectives.
- Inbound materials and gases, outbound products, shipment frequencies and service-level requirements.
- Occupations, headcount by shift, skill levels, hiring radius and training lead time.
- Required building-completion, equipment-installation and production-start dates.
Without this profile, a state average or an announced project cannot tell you whether a particular parcel is viable.
Separate hard gates from preferences
Use a two-stage decision. First, eliminate locations that cannot meet a non-negotiable requirement. Only then should you award points for relative advantages.
Typical hard gates
- Written confirmation that electricity can be delivered at the required capacity, voltage, reliability and date.
- Water supply and wastewater treatment or disposal that meet process, environmental and schedule requirements.
- A permitting path compatible with the production start date.
- Parcel control, zoning, geotechnical and environmental conditions that permit the planned facility.
- A realistic workforce pipeline for critical occupations and shifts.
- Access to required materials, gases, equipment service and freight routes within acceptable lead times.
A site that fails one of these tests should not remain in the ranking merely because it scores well on taxes or land cost. Record the reason for each elimination and the evidence date.
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For locations that pass the gates, use the same definitions, time horizon and rating scale. A practical convention is to rate each factor from 0 (unacceptable) to 5 (best among feasible options), multiply by the project’s weight, and retain the evidence and confidence level behind every rating. The weights are project choices, not universal industry standards: a water-intensive fab should weight water delivery more heavily than a small equipment plant, while a fast-ramp packaging operation may place more weight on labor availability and logistics.
| Decision axis | Questions to answer | Evidence to collect |
|---|---|---|
| Utilities | Can the site receive the required power, water and wastewater service, with what reliability, price and delivery date? | Utility letters, engineering studies, upgrade scope, rates, redundancy and connection schedule. |
| Workforce | Are the required occupations available at the needed scale, wage and shift pattern? | Occupation-level employment, wages, concentration, competing employers, training capacity and recruitment data. |
| Suppliers and logistics | Can critical materials, gases, parts and service reach the plant, and can products reach customers reliably? | Supplier maps, lane costs and times, airport/port/rail/highway access, border processes and contingency routes. |
| Site and construction | Is the parcel controlled and buildable, and can construction and tool installation meet the schedule? | Title, zoning, geotechnical and environmental work, contractor capacity, permitting status and critical-path schedule. |
| Total cost | What is the all-in cost over a consistent project horizon? | Land, construction, equipment installation, labor, utilities, logistics, taxes, compliance, financing and delay assumptions. |
| Incentives | What is the net value after conditions, timing, eligibility tests and repayment risk? | Written state or local offers, statutory requirements, milestones, funding dates, clawbacks and covered-incentive documentation. |
| Resilience | How does the site perform under outages, supplier failure, labor shortages, extreme weather or demand changes? | Scenario results, alternate suppliers and routes, backup utilities, inventory requirements and recovery assumptions. |
Do not hide uncertainty in a single number. Add a confidence field such as verified, supplier-confirmed, modeled or preliminary, and preserve the date and owner of each input.
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Compare electricity, water and wastewater at parcel level
Electricity is a deliverability question, not just a rate question
Ask the serving utility for written, site-specific confirmation of available capacity, voltage, redundancy, power-quality characteristics, interconnection work, required substation or transmission upgrades, cost responsibility and the date service can be energized. Compare normal and interruptible rates, demand charges, escalation assumptions and any renewable or emissions requirements relevant to the project.
Reliability should be evaluated against the process, not a generic regional ranking. Determine the outage duration and power-quality events the equipment can tolerate, what on-site generation or storage is required, and how backup systems affect capital, fuel, emissions permits and maintenance. A state with attractive average rates does not prove that a particular parcel has spare capacity or a timely connection.
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Water and wastewater can control the schedule
Quantify average and peak process-water demand, treatment quality, seasonal availability, cooling needs, discharge limits, pretreatment, permitted volumes and reuse targets. Confirm whether the public system, an industrial supplier or an on-site source can provide the volume and quality when the first tool is commissioned and when the fab expands.
Obtain written information on wastewater acceptance, treatment capacity, discharge limits, connection work, fees and expansion timing. Include drought, allocation and competing industrial demand in the risk analysis. Semiconductor-industry guidance identifies energy and water as major cost items and treats reliability and sustainability as paramount; those concerns must be tested at the parcel rather than inferred from statewide statistics.
Test the extension schedule and sustainability claims
Ask who funds and owns utility upgrades, what permits are required, which dependencies sit on the critical path and what happens if construction is delayed. Compare water-reuse, renewable-power and emissions options by installed cost, operating cost, reliability and approval time. Treat a sustainability attribute as valuable only when the supply, contract and delivery date are documented.
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Measure workforce depth by occupation and shift
Translate the process into a labor plan
List every critical occupation—process and equipment engineers, technicians, operators, facilities specialists, maintenance, quality, safety, information technology, construction and supervisors—then specify numbers by shift, credentials, experience and hiring date. Compare the available labor pool with the plant’s ramp rather than using total employment as a proxy.
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Use public dashboards as screening tools
SelectUSA’s workforce dashboard allows comparisons of wages, employment and workforce concentration across states and metropolitan areas. The page cautions that some indices can lag by up to two years. Use those figures to narrow the list, then refresh them with current local employer data, education partners, labor-market information and recruiter evidence before assigning a final score.
Plan training as part of the location decision
Identify community colleges, universities, apprenticeship providers and incumbent-worker programs that can deliver the required skills before ramp. Secure written commitments, curriculum timelines, equipment needs and funding responsibilities. Workforce development is not an afterthought: in a U.S. Government Accountability Office award snapshot dated July 2025, 13 of 19 companies receiving semiconductor-related awards also received workforce-development funding. That figure describes awards at that date; it does not guarantee funding for a new project.
Map suppliers, customers and logistics resilience
Build a dependency map
For each material, gas, chemical, spare part, tool and service, record supplier location, qualification time, minimum order, transport mode, lead time, inventory requirement and single-source exposure. Semiconductor materials suppliers often cluster geographically, so local sourcing may be impossible or may increase concentration risk. Evaluate qualified alternatives and the time and cost to approve them.
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Use the real shipment profile
Model inbound and outbound lanes by frequency, value, handling requirements and service level. Compare highways, rail, airports, ports and specialized freight services, including border procedures where relevant. Include weather disruptions, hazardous-material rules, customs time, packaging, insurance and emergency shipments. A nominally nearby airport is not an advantage if it lacks the cargo service or handling capability your products require.
GAO’s description of Commerce project selection includes supplier networks and logistics experience among readiness considerations. Treat that as a reason to document operational capability, not as a substitute for project-specific lane analysis.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Verify site, construction and permitting readiness
Examine the parcel and surrounding infrastructure
- Confirm ownership or option rights, zoning, easements, title restrictions and expansion land.
- Review geotechnical conditions, flood risk, seismic requirements, wetlands, contamination and environmental constraints.
- Check road capacity, heavy-haul routes, worker access, fire protection and emergency response.
- Compare an existing building with a greenfield option, including demolition, retrofit, cleanroom geometry and tool-installation constraints.
Build a critical-path schedule
Sequence land control, design, environmental review, utility upgrades, permits, civil work, building completion, cleanroom qualification, equipment delivery, installation, process qualification and production ramp. Assign an owner and a contingency to each dependency. GAO identifies construction plans and regulatory-compliance progress, including permitting, as examples of operational readiness.
Ask local authorities for the exact permit path, review times, agency responsibilities, public-hearing risks and conditions that could change after design. Compare contractor availability, skilled-trade wage pressure, construction inflation, equipment-installation experience and the ability to work multiple shifts. A cheap parcel can become the expensive choice if an extension or permit delays production.
Model total cost before counting incentives
Use one consistent financial model
For every site, use the same currency, escalation assumptions, discount rate and analysis horizon. Include:
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- Land acquisition, site preparation, roads and off-site infrastructure.
- Building, cleanroom, abatement, utilities, backup systems and environmental controls.
- Equipment installation, commissioning, qualification and start-up losses.
- Recruiting, wages, benefits, relocation, training and retention programs.
- Electricity, water, wastewater, chemicals, gases, waste handling and maintenance.
- Inbound and outbound logistics, inventory, insurance, taxes, permitting and compliance.
- Financing costs, working capital, contingency and the value of schedule delay.
Show one-time capital, recurring operating cost and risk-adjusted cost separately. Do not offset an uncertain incentive against a fully committed cost in the base case.
Read CHIPS-related incentives as conditional contracts
The current statutory CHIPS provision authorizes financial assistance for eligible semiconductor and related facility or equipment investments, subject to statutory requirements and available appropriations. Eligibility is not automatic, and a program announcement is not a site award.
NIST’s facility FAQ describes a state or local covered-incentive letter and gives examples such as tax, workforce, real-property and research-and-development incentives. Obtain written, jurisdiction-specific terms that state eligibility, application and payment timing, performance milestones, reporting duties, duration, tax treatment and any repayment or clawback provisions. Value the incentive on a net basis after compliance costs and the probability and timing of payment.
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Run sensitivities instead of trusting a single ranking
At minimum, rerun the model for:
- A delayed substation, water connection or wastewater expansion.
- Slower hiring, higher wages or a larger training requirement.
- Construction inflation, contractor scarcity or equipment-installation delay.
- No CHIPS or local incentive award, or payment arriving later than planned.
- Lower initial demand, a faster ramp or a later expansion phase.
- Loss of a critical supplier, freight-route disruption or a prolonged utility outage.
Record which sites remain feasible under each scenario. A location with a slightly lower base-case cost but a severe failure mode may be less attractive than a site with a higher, more predictable cost.
A practical site-comparison workflow
- Write the facility profile. Freeze process, capacity, utility, workforce, logistics and schedule assumptions for the first screening round.
- Create a broad candidate list. Include states, metropolitan areas and specific industrial parcels without assuming that a state-level advantage transfers to every site.
- Request primary evidence. Ask utilities, water providers, local authorities, suppliers, workforce partners and logistics providers for dated, written responses.
- Apply hard gates. Remove sites that cannot meet delivery dates, permitting feasibility, utility capacity, workforce minimums or environmental requirements.
- Score the survivors. Use identical definitions, weights, rating scales and cost assumptions; separate verified facts from estimates.
- Stress-test the ranking. Run utility, labor, construction, incentive, demand and disruption scenarios.
- Conduct confirmatory diligence. Commission geotechnical and environmental work, validate supplier lanes, negotiate utility terms and obtain binding or near-binding incentive documents.
- Make the decision with an audit trail. Preserve source dates, assumptions, confidence levels, unresolved issues and the trigger for reopening the decision.
How to interpret national context without overgeneralizing
SelectUSA reported that the semiconductor industry represented 50% of global semiconductor sales revenue in 2024. Its page, accessed in 2026, also attributed more than 145,000 semiconductor-industry-subcluster jobs to the Cluster Mapping dashboard. These figures describe the scale of the U.S. ecosystem; they do not rank individual parcels or prove that a particular labor market can support your project.
GAO reported that, as of July 2025, the Department of Commerce had awarded $30.9 billion across 40 projects. That is a dated program snapshot, not a promise of future funding and not a location-ranking signal. Refresh program status, utility capacity, wages, construction conditions, permitting and incentive terms before committing capital.
What a defensible recommendation looks like
The final recommendation should identify the winning parcel, the alternatives, the hard-gate evidence, the weighted results, the most sensitive assumptions and the conditions that must be satisfied before closing. It should also state what is not yet verified. This discipline prevents a glossy incentive announcement, a low land price or a statewide statistic from disguising a utility, labor or schedule constraint that could determine whether the facility starts on time.
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