Linde to Invest About $1 Billion in Arizona to Support Semiconductor Expansion
Linde, one of the world’s largest industrial-gas companies, said Friday that it will invest approximately $1 billion to expand its industrial-gas facilities in Phoenix, Arizona, supporting a new capacity expansion by a leading global semiconductor manufacturer. Linde said it has signed a long-term supply agreement with the unnamed customer to provide ultra-high-purity industrial gases for the customer’s semiconductor manufacturing site in Phoenix. The investment will fund two new air-separation units and related infrastructure. Once completed, the project will be one of Linde’s largest-ever investments serving electronics-industry customers worldwide. The new facilities will increase Linde’s capacity to supply ultra-high-purity nitrogen, oxygen and argon to the customer’s two new wafer-fabrication plants. They will use Linde’s proprietary SPECTRA® air-separation technology to meet the stringent purity, reliability and operating-efficiency requirements of advanced semiconductor manufacturing. Industrial gases are essential materials in semiconductor production. Nitrogen is widely used to protect the wafer-fabrication environment and control processes, while oxygen and argon are used in key steps such as etching and deposition. As demand for AI servers and high-performance-computing chips grows rapidly, advanced fabs are becoming increasingly dependent on stable supplies of high-purity gases. The investment also reflects the expansion of the supporting supply chain as semiconductor manufacturing returns to the United States. The U.S. has continued to promote domestic chipmaking capacity in recent years, and several global semiconductor companies have announced plans to increase their U.S. investments. Demand has consequently grown for related infrastructure, including fabs, power, materials and industrial gases. Outside the U.S., Linde is also expanding its semiconductor business in Asia. The company said its joint venture Lianhua Linde had won new orders from the same customer to supply industrial gases for multiple semiconductor-manufacturing and advanced-packaging projects. The joint venture plans to invest approximately $800 million to build multiple air-separation units and hydrogen-production facilities. Armando Botello, head of Linde’s U.S. gases business, said advanced semiconductor manufacturing depends on extremely high-purity and reliable gas supplies. He said the investment demonstrates Linde’s ability to provide customers with high purity, reliability and supply at scale. Linde shares fell nearly 3% in premarket trading Friday. Earlier, the company reported second-quarter results that exceeded market expectations and raised the lower end of its full-year earnings guidance. Analysts said that although Linde’s results beat expectations, they lacked a strong enough upward-revision surprise and did not clearly exceed what the market had previously anticipated. Linde reported adjusted second-quarter earnings per share of $4.50, up 10% from a year earlier and above the $4.48 expected by the market. Quarterly sales rose 9% year over year to $9.29 billion, also exceeding analysts’ expectation of $8.99 billion. Based on its performance, Linde raised its 2026 adjusted EPS forecast to $17.70-$17.90 from the previous range of $17.60-$17.90. The company expects third-quarter adjusted EPS of $4.45-$4.55, representing year-over-year growth of 6% to 8%. As Linde continues to expand its semiconductor-business footprint, investors are also watching whether its investments in the electronics supply chain can translate into sustained long-term earnings growth. Analysts said the rapid development of the AI industry is pushing global semiconductor capital spending into a new cycle, which could benefit industrial-gas companies as advanced manufacturing expands. However, returns on the related investments could come under pressure if demand for AI chips slows in the future or if semiconductor-industry capital spending declines.
Linde said it has signed a long-term supply agreement with the unnamed customer to provide ultra-high-purity industrial gases for the customer’s semiconductor manufacturing site in Phoenix. The investment will fund two new air-separation units and related infrastructure. Once completed, the project will be one of Linde’s largest-ever investments serving electronics-industry customers worldwide.
The new facilities will increase Linde’s capacity to supply ultra-high-purity nitrogen, oxygen and argon to the customer’s two new wafer-fabrication plants. They will use Linde’s proprietary SPECTRA® air-separation technology to meet the stringent purity, reliability and operating-efficiency requirements of advanced semiconductor manufacturing.
Industrial gases are essential materials in semiconductor production. Nitrogen is widely used to protect the wafer-fabrication environment and control processes, while oxygen and argon are used in key steps such as etching and deposition. As demand for AI servers and high-performance-computing chips grows rapidly, advanced fabs are becoming increasingly dependent on stable supplies of high-purity gases.
The investment also reflects the expansion of the supporting supply chain as semiconductor manufacturing returns to the United States. The U.S. has continued to promote domestic chipmaking capacity in recent years, and several global semiconductor companies have announced plans to increase their U.S. investments. Demand has consequently grown for related infrastructure, including fabs, power, materials and industrial gases.
Outside the U.S., Linde is also expanding its semiconductor business in Asia. The company said its joint venture Lianhua Linde had won new orders from the same customer to supply industrial gases for multiple semiconductor-manufacturing and advanced-packaging projects. The joint venture plans to invest approximately $800 million to build multiple air-separation units and hydrogen-production facilities.
Armando Botello, head of Linde’s U.S. gases business, said advanced semiconductor manufacturing depends on extremely high-purity and reliable gas supplies. He said the investment demonstrates Linde’s ability to provide customers with high purity, reliability and supply at scale.
Linde shares fell nearly 3% in premarket trading Friday. Earlier, the company reported second-quarter results that exceeded market expectations and raised the lower end of its full-year earnings guidance. Analysts said that although Linde’s results beat expectations, they lacked a strong enough upward-revision surprise and did not clearly exceed what the market had previously anticipated.
Linde reported adjusted second-quarter earnings per share of $4.50, up 10% from a year earlier and above the $4.48 expected by the market. Quarterly sales rose 9% year over year to $9.29 billion, also exceeding analysts’ expectation of $8.99 billion.
Based on its performance, Linde raised its 2026 adjusted EPS forecast to $17.70-$17.90 from the previous range of $17.60-$17.90. The company expects third-quarter adjusted EPS of $4.45-$4.55, representing year-over-year growth of 6% to 8%.
As Linde continues to expand its semiconductor-business footprint, investors are also watching whether its investments in the electronics supply chain can translate into sustained long-term earnings growth.
Analysts said the rapid development of the AI industry is pushing global semiconductor capital spending into a new cycle, which could benefit industrial-gas companies as advanced manufacturing expands. However, returns on the related investments could come under pressure if demand for AI chips slows in the future or if semiconductor-industry capital spending declines.