A<\/span><\/span>A<\/span> hulking gray giant rises from the desert. Inside, engineers create the force behind our phones and computers and appliances, our streaming services and search engines and chatbots and vibe-coded apps and websites. The complex is simultaneously massive and squat, dwarfed by the mountains that surround it, and it is endless. I drive past one building, and then another, and then the ground opens up where construction crews have dug up the earth so a third building can rise. There is a parking lot, and then another, and then another. There is an empty lot on the other side of the street, full of cars and the occasional food truck to feed the thousands of laborers who are busy transforming this expanse of desert into an industrial park. There is dust, so much of it, choking the air.<\/span><\/p>\n I stand before the savior of Arizona\u2019s economy. Like all great deities, it demands sacrifice. In the desert, nothing is more precious than water, and water is what must be given \u2014 nearly 5 million gallons a day, every day, sourced from Phoenix\u2019s municipal supply. The offering has been well worth it.<\/span><\/p>\n All of this is the fruit of the Taiwan Semiconductor Manufacturing Company, the world\u2019s leading producer of microchips. Its Arizona operation is the result of a pre-pandemic gamble Phoenix made to revive its sluggish economy<\/a>, which never quite rebounded from the Great Recession. Now TSMC\u2019s foundry looms over the city\u2019s outskirts.<\/span><\/p>\n TSMC is a success story, one that some local leaders may have hoped to repeat with hyperscale data center developments. The progression may have seemed natural: The Grand Canyon State is not only home to the largest chip factory this side of the Pacific but also 172 data centers<\/a>, neither of which faced much pushback. But the newer, larger developments being proposed from Phoenix to Tucson demand more of everything \u2014 more water, more power, more land \u2014 than Arizonans are willing to give. Where TSMC was welcomed with open arms and the first wave of data centers was largely ignored, new developments are facing mass backlash in Arizona, where a grassroots, surprisingly bipartisan coalition of residents has united against data centers.<\/span><\/p>\n Now the state has a sixth C, Arizona native Christine Mackay tells me. \u201cChips.\u201d<\/p>\n<\/blockquote>\n In reporting this story, I spoke to local activists and economic developers, elected officials and their angry constituents. I sat in on city council meetings where people lined up by the dozens to speak up against data center projects, and in cozy suburban homes where tight-knit groups of former strangers told me about the struggle that brought them together. I pored over maps of Arizona\u2019s dry, cracked landscape with laypeople who, over the past two years, have made themselves experts on zoning and land use and water consumption so they can understand the beast they\u2019re trying to fight. The locals on both sides of this debate claim to want the same thing: a better, more prosperous Arizona. Their visions for achieving it, however, are completely at odds.<\/span><\/p>\n In Arizona and elsewhere, data center developers have tried to win over locals by making enticing promises about the jobs, tax revenue, and infrastructure they\u2019ll bring with them. All they ask for in exchange is water \u2014 and, they swear, not nearly as much of it as you\u2019d expect. Some hyperscale data centers, like Google\u2019s facility in The Dalles, Oregon, use about 1.5 million gallons a day, about one-third of what TSMC\u2019s Arizona complex consumes in the same timeframe. Those reassurances, however, aren\u2019t enough to assuage Arizonans, who now have to contend with the fact that the state will soon lose access<\/a> to nearly 30 percent of the water it receives from the Colorado River.<\/span><\/p>\n Even now, as people across the country sour on AI and fight against data centers in their communities, TSMC\u2019s Arizona operation hums along without significant opposition. And yet it\u2019s impossible to make sense of why Arizonans are so opposed to new data center development without first understanding why they eagerly welcomed TSMC, even though both industries must contend with the issue that has plagued Arizona since its founding: There isn\u2019t enough water.<\/span><\/p>\n For as long as anyone could remember, business in Arizona revolved around the storied \u201cfive C\u2019s\u201d: cattle, copper, cotton, citrus, and climate, a catchall for the region\u2019s mild, salubrious winters, which locals say often more than make up for the sweltering summers.<\/span><\/p>\n Now the state has a sixth C, Arizona native Christine Mackay tells me. \u201cChips.\u201d<\/span><\/p>\n The TSMC development is, in a sense, Mackay\u2019s doing. As the head of Phoenix\u2019s economic development office, she spearheaded the effort that brought the Taiwanese giant to the Sonoran Desert. In 2020, while the global economy was all but shut down, TSMC made an announcement. The same forces that brought the world to a standstill had created even more demand for TSMC\u2019s products, and in response, TSMC would be opening an advanced semiconductor foundry \u2014 a \u201cfab,\u201d in industry jargon \u2014 in Phoenix. Initially, TSMC predicted that it would pour $12 billion into Arizona\u2019s economy by 2029. Since then, TSMC\u2019s projected expenditure in the state has ballooned to $265 billion, what the company touts as the largest foreign direct investment in US history.<\/span><\/p>\n TSMC just put the finishing touches on its second fab in a formerly desolate swath of north Phoenix, with a third under construction and plans for several more underway. This buildout has been more than a decade in the making. TSMC started shopping around for a US location in 2016. That year, Mackay said, the company put out a request for proposals through a codename. No one won.<\/span><\/p>\n \u201cWe aren\u2019t a group that takes no for an answer,\u201d Mackay said proudly. Her office asked TSMC executives what they thought Arizona was missing, and then spent the next three years addressing their concerns. In 2019, Phoenix sent a delegation to Taiwan to share a new development plan for a science and technology park, the nucleus of which would be a factory, ideally one of TSMC\u2019s fabs. \u201cThey agreed they needed to come back and take another look at Phoenix,\u201d Mackay told me. Her team showed them two locations: Laveen, Arizona, a suburb southwest of Phoenix, and, just north of the city, an undeveloped area roughly the size of Manhattan called Biscuit Flats, so named, Mackay told me, because \u201cit\u2019s as round and flat as a biscuit.\u201d<\/span><\/p>\n \u201cThat very day,\u201d she recalled, \u201cthey said, \u2018This could work.\u2019\u201d<\/span><\/p>\n What followed was a flurry of development unlike anything the state has ever seen. TSMC has brought more than 3,500 jobs to the state, and an entire economy has sprung up to support the company\u2019s Arizona operation. Much like in Taiwan \u2014 where the company accounts for nearly one-tenth of Taiwan\u2019s gross domestic product \u2014 TSMC has become, if not the center of the universe, then at least a galaxy unto itself. The company controls an estimated 70 percent<\/a> of the global chip market, and its contracts with Apple and Nvidia alone make up more than one-third of its annual revenue. (Apple and Nvidia design their own chips, but they don\u2019t produce them. The complex manufacturing process is instead largely outsourced to TSMC.)<\/span><\/p>\n TSMC has changed swaths of Phoenix \u2014 its landscape, its industries \u2014 and it has brought with it jobs and prosperity. Locals fear that the new hyperscale data center developments will do the former but not the latter, consuming resources while contributing little to the community. Mackay, who has worked as an economic developer for over 30 years, didn\u2019t experience significant pushback when she helped court data center developments in the past. \u201cThe first 10 data centers I did look like pretty little office buildings,\u201d she said.<\/span><\/p>\n The new developments being proposed are neither pretty nor little. Where earlier data centers were inconspicuous, the hyperscale facilities developers want to build in Arizona \u2014 often on rural farm or desert land \u2014 are both massive and incongruous. Despite the state\u2019s recently acquired reputation for sprawl, there are still plenty of places where, in the quiet desert stillness, you can sometimes hear a pack of coyotes howl in the middle of the night. There are dark-sky corridors and wild animals, ghost towns and saguaro forests. All of this, some locals say, could be sacrificed for the benefit of an industry that also poses an existential threat to humanity. There are ethical questions and environmental ones, debates over zoning and taxes and, most of all, over water. Yet the cities and the outlying suburbs keep growing, spreading in all directions until they\u2019re constrained by geography or bureaucracy or Indigenous sovereignty. And industry, somehow, keeps arriving, thirstier than ever.<\/span><\/p>\n<\/div>\n Year-round but especially in the summers, Arizonans tailor their routines to the elements. Drivers are careful not to get stuck in dust storms or monsoons. Joggers avoid going out in late mornings and early afternoons, when the heat is at its most intense. And on August 1st, at the peak of monsoon season, the No Desert Data Center Coalition\u2019s protest began in the early evening, when the sun\u2019s punishing rays were starting to give way to a muted desert sunset.<\/span><\/p>\n About a dozen people showed up to the rally on the outskirts of Tucson, in front of the 290-acre site where Beale Infrastructure is building a 600-megawatt data center. Every few minutes, Vivek Bharathan, one of the organizers, reminded the protesters to stay hydrated. Children sprayed each other with water guns and dutifully accepted drinks from their parents. Mayra Duron, one of the attendees, brought a cooler of agua de jamaicato share with the group. The magenta beverage, she said, was full of electrolytes. Water \u2014 the lack of it, the need for it, the amount required to build a massive data center in the middle of the desert \u2014 was top of mind. A hand-painted banner expressed the overarching sentiment: BEALE\u2019S DATA CENTER WILL SUCK US DRY.<\/span><\/p>\n \u201cIf you feel the heat, please head home,\u201d Bharathan told the small crowd. \u201cIt is a hot day, and if they succeed in building a data center here, it\u2019ll be even hotter. We know these things create heat islands<\/a> that can affect the surrounding area by over 10 degrees Fahrenheit.\u201d Duron, a local macrame artist who incorporates cactus spines into her weaving, said she worried about how rising temperatures would affect the region\u2019s saguaros. \u201cIn Phoenix, it\u2019s hyper-industrialized,\u201d she said, \u201cand they\u2019ve seen saguaros die left and right.\u201d<\/span><\/p>\n Cars honked in support. Some drivers pumped their fists out their windows as they sped by. Arizonans weren\u2019t riled up about AI in 2019, when the TSMC project was announced, nor did they notice or care much about the previous data centers that were quietly built throughout the state. Things have changed. Tucson, it appears, is united in its opposition to the data center complex dubbed Project Blue. But the buildings are going up anyway.<\/span><\/p>\n \u201cWe take it as normal because it\u2019s been that way for so long. But it isn\u2019t normal. It\u2019s a catastrophe.\u201d<\/p>\n<\/blockquote>\n Information about Project Blue began slowly trickling out in the spring of 2025. First came the name, and some clues<\/a>: The development, whatever it was, would be on a county-owned plot of land; it would create 3,000 temporary construction jobs and 200 well-paying positions down the road; it would generate $152 million in tax revenue over the next decade; it would be big, and it would be thirsty, and new water lines would be built to keep it satiated. That was all anyone in the know would say, because the county government, which owned the land, signed a nondisclosure agreement with the would-be developer.<\/span><\/p>\n The news came out in a mundane, bureaucratic way, as information about prospective land sales in midsize cities often does. In June 2025, Jan Lesher, the Pima County administrator, submitted a 44-page memo<\/a> to the Board of Supervisors. The words \u201cdata center\u201d did not appear until the fourth page. This data center would provide an \u201cunprecedented\u201d $3.6 billion opportunity for Tucson and for the county. There were other details, and there was flattery, and there were promises. Project Blue would use \u201c100% renewable water resources.\u201d Its developer, Beale Infrastructure, would build critical infrastructure at its own expense, including an 18-mile pipe extension and an aquifer recharge facility.<\/span><\/p>\n \u201cThe boost it could provide to our local economy may well be transformative,\u201d Rex Scott, one of five members of the County Board of Supervisors, said at the time<\/a>. His colleagues were split. They voted 3-2 to rezone the 290-acre tract, and voted again to sell it to Beale for around $20 million. But it wasn\u2019t a guarantee yet. One of the terms of the deal required Tucson to annex the land and approve the sale, since the city would be on the hook for the land\u2019s water service.<\/span><\/p>\n The honeymoon, if there even was one, didn\u2019t last. Just hours after the board\u2019s vote, Tucson Electric Power announced<\/a> it was looking into a rate hike that would increase customers\u2019 bills by an average of 14 percent. The utility claimed the decision was unrelated to the forthcoming data center. Even still, one of the commissioners who voted to rezone the land and sell it to Beale officially asked to reconsider the rezoning.<\/span><\/p>\n Perhaps it was the fact that Tucsonans learned of the data center and the rate hike in such quick succession, coupled with the inescapable news of data centers raising locals\u2019 utility bills<\/a>, that catalyzed their mass opposition. Maybe it was the Arizona Mirror<\/em>\u2019s report<\/a> that Project Blue, combined with another proposed data center, would not only be TEP\u2019s biggest customer but also consume more than four golf courses\u2019 worth of water each year. The fact that Amazon Web Services was reportedly the end client \u2014 and that county officials had been discussing the project since 2023, and, according to public records obtained by Arizona Luminaria<\/em><\/a>, signed NDAs prohibiting them from naming the companies involved \u2014 certainly didn\u2019t help. Whatever the reason, Beale executives probably weren\u2019t prepared for just how angry the public would be.<\/span><\/p>\n Around 200 people showed up to a public information meeting Beale hosted<\/a> in the auditorium of a local high school in July 2025. Most of them were furious about the data center, or they were worried, or they were scared. Tensions were even higher<\/a> at the follow-up meeting held at the Tucson Convention Center. Over a thousand people showed up. The boos started before Beale\u2019s representatives got through their introductions, and they continued throughout the night.<\/span><\/p>\n Keri Silvyn, one of the attorneys representing Beale, tried to warm up the crowd. \u201cWe all have cellphones, we have computers, a number of us have multiple of those in our households,\u201d she said. \u201cMany of the various signs that I\u2019ve seen have QR codes, that if you click on, will take you through a data center in order to get to different sites. The internet is housed in data centers. That\u2019s what they are.\u201d Beale\u2019s team explained that they selected the site because it was far from residential areas, and then they reiterated the now familiar pitch data center developers make to wary communities. Beale said it would pay for a pipeline, and once the pipeline was built the data center would run on reclaimed water. (Until then, however, it would rely on potable water.) The company would pay to clean up contaminated water. It would inject any extra water into local aquifers, eventually making the whole thing \u201cwater-positive.\u201d None of this mollified the thousand or so people in the audience, who booed every few minutes.<\/span><\/p>\n To no one\u2019s surprise, the opposition mostly came down to water. Locals worried that if the data center came to town, the resource, already so scarce and so precious, would vanish. They cited the fact that Arizona would likely lose more of its Colorado River allotment. They conjured images of even hotter, drier summers.<\/span><\/p>\n \u201cCan you guarantee us water for future generations?\u201d<\/p>\n<\/blockquote>\n When it was her turn to speak, Melanie Cooley, an education specialist at the Watershed Management Group, a local habitat restoration nonprofit, conjured up a past familiar to few Tucsonans. \u201cWhere we are sitting right now was a forest 125 years ago that adjoined a flowing river that flowed year-round,\u201d she said. \u201cThere are people alive today who grew up swimming in the Santa Cruz River.\u201d<\/span><\/p>\n Average temperatures in Tucson are now 11 degrees Fahrenheit higher than they were a century ago, Cooley said. About six degrees of that rise can be attributed to global warming. The other five, Cooley explained, are because of changes in the local ecosystem, including the felling of forests and the drying up of rivers like the Santa Cruz. \u201cWhat we see today when we drive across that river that looks like a big, dry ditch, we take it as normal because it\u2019s been that way for so long. But it isn\u2019t normal. It\u2019s a catastrophe. It\u2019s a catastrophe that was brought on by overpumping of our groundwater and bad development decisions, and Project Blue is another bad development decision.\u201d<\/span><\/p>\n Another speaker compared Project Blue to industrial projects of decades past. \u201cThis is like d\u00e9j\u00e0 vu for me,\u201d he said, listing off economic development projects that were supposed to turn things around for the city: Raytheon; Hughes, the military contractor that preceded it; the Air National Guard. \u201cWhat did they do? They contaminated our water. To this day, we\u2019re having to deal with that.\u201d Tucsonans had gone to great lengths to conserve their water. \u201cWe took our landscaping out, we took our swimming pools out.\u201d He waved over a relative who was holding an infant in a sling. \u201cCan you guarantee us water for future generations?\u201d he asked the Beale representatives. \u201cCan you guarantee water for her generation, my kids\u2019 generation, my grandkids\u2019 generation, and this little baby\u2019s generation?\u201d<\/span><\/p>\n Two days after this contentious hearing, a unanimous vote by the Tucson City Council shut down the annexation of the land. At a subsequent meeting, the city adopted new rules for data centers and other large water users. Residents were relieved, but not for long. Three weeks after the city stopped the annexation, effectively killing the development, local reporters confirmed<\/a> that Beale was moving forward with the data center anyway. County officials and Beale representatives had previously said that the deal was contingent on Tucson\u2019s annexation of the land. Suddenly that was no longer an issue. (Beale declined to comment on why annexation was no longer necessary for the deal.)<\/span><\/p>\n Over time, there were other adjustments to the plan: The data center would no longer be water-cooled and would instead rely on closed-loop air cooling. If the shift was intended to win over Beale\u2019s critics, it didn\u2019t work. Members of the No Desert Data Center Coalition claim that air-cooled facilities use more electricity, and, since power plants also use water to cool their systems, air-cooled data centers may actually be more water-intensive, just indirectly, an allegation Beale denies. \u201cThe use of air-cooled technology for this project does not increase overall energy use; while the energy allocation is different, the energy use is the same,\u201d Beale spokesperson Tony Burkart, the Beale spokesperson, told The Verge<\/em>. (Energy generation does require water, though there\u2019s little data<\/a> on just how much water Arizona\u2019s power plants consume.) The change also cost Beale a tenant: Amazon reportedly pulled out of the project<\/a>, saying an air-cooled facility wouldn\u2019t meet its needs. Beale declined to disclose whether it has since found a new tenant for Project Blue. \u201cIt\u2019s up to our tenants when they choose to announce their investment in a project,\u201d Burkart said.<\/span><\/p>\n Still, the project moved forward. The county completed its deal with Beale on Christmas Eve, and Beale promised to bring even more gifts in the form of $15 million in donations, some of which would go toward local STEM and trade school programs. The new year brought more challenges. The state\u2019s attorney general filed an appeal against the Arizona Corporation Commission<\/a>, the state agency that oversees public utilities, over its approval of a special energy agreement between Beale and TEP. Members of the No Desert Data Center Coalition filed a separate lawsuit<\/a> alleging that the county\u2019s dealings with Beale violated the state\u2019s open meeting law.<\/span><\/p>\n<\/div>\n Image 1 of 4<\/p> In the Ahwatukee area of Phoenix, locals push back against data center construction.<\/em><\/span><\/p>\n Protesting locals pointed to past economic development projects from Raytheon and Hughes that they say contaminated their water.<\/em><\/span><\/p>\n Tucson is 11 degrees hotter on average than it used to be; five of those degrees can be chalked up to changes in the local ecosystem, not just climate change.<\/em><\/span><\/p>\n Less than 100 years ago, the Santa Cruz River still flowed in Tucson. Today it\u2019s long gone.<\/em><\/span><\/p>\n<\/figcaption><\/figure>\n The coalition\u2019s suit got tossed, but the data center\u2019s opponents found other ways to voice their displeasure. They staged a protest<\/a> inside the offices of Lazarus and Silvyn, the law firm representing Beale in its dealings with the county. When construction crews broke ground<\/a> on the site, dozens of people were there, blocking vehicles while chanting, \u201cWe respect the workers, we don\u2019t respect the work.\u201d The data center\u2019s opponents haven\u2019t been able to stop construction altogether, but they\u2019ve managed to slow it. After observers affiliated with No Desert Data Center noticed that contractors with Ames Construction were using city-owned hydrants<\/a>, officials demanded that Beale give the city water credits to replenish the approximately 651,702 gallons of drinking water used for dust control. (A host of local ordinances require construction crews to spray water to mitigate the air pollution caused by blowing dust.) Burkart, the Beale spokesperson, said the contractor \u201cfollowed standard procedures and the City issued a permit for temporary water per the normal course of business.\u201d After Ames stopped using city water, officials with the Pima County Department of Environmental Quality also found the contractors in violation of their \u201cfugitive dust permit\u201d on two separate occasions<\/a>, each of which could carry a fine of up to $10,000. And when Ames turned to a Tucson green waste facility for water, protesters flooded the subcontractor with phone calls<\/a> until its owner dropped the contract.<\/span><\/p>\n None of this grassroots opposition, however, has been enough to actually stop Project Blue. To facilitate construction, the Arizona Department of Water approved a request<\/a> to build two wells on the site, allowing the facility to draw up 31 million gallons of groundwater a year. Burkart said this water will only be used for construction. Once the data center is up and running, Burkart said, water use \u201cwill be limited to ordinary domestic purposes, such as restrooms, employee kitchens and health and safety.\u201d<\/span><\/p>\n Some local leaders have since worked to regain the community\u2019s trust. After a contentious meeting in August, the Tucson City Council implemented new, stringent limits on data centers<\/a>, making them one of the most regulated developments in the city. But residents want more, and they\u2019ve vowed to keep showing up until they get a full ban. Even the county government has been surprisingly amenable of late. In September, the Pima County Board of Supervisors imposed a 120-day moratorium<\/a> on new data center projects. But that doesn\u2019t mean other developments are off the table. In March, the county announced it would be putting some of the proceeds of the Beale land sale toward hiring an economic developer. The goal of the job, which comes with an annual salary of $150,000, would be to bring foreign direct investments to Tucson. The city, it seems, is looking for a Christine Mackay of its own \u2014 and maybe a TSMC, too.<\/span><\/p>\n Rebecca Chen understood the promise of TSMC well before most other Arizonans. A Phoenix resident since 2015, she started working as a Realtor in 2019, just before the company arrived. \u201cTSMC may not be a huge household name for a lot of Americans, but it is for Asians,\u201d Chen said. \u201cTSMC is basically like Apple or Tesla for Taiwanese.\u201d The covid-19 pandemic sent the industry into a frenzy: Americans, largely confined to their homes, wanted space and sunshine and relocated to the Sun Belt in droves, and Arizona was no exception. Still, Chen knew this was nothing compared to what TSMC would bring. She was introduced to her first Taiwanese client by an industry friend in California, and soon the referrals were piling up. She sold homes virtually, showing them to clients via video call; some TSMC workers bought houses sight unseen.<\/span><\/p>\n \u201cI feel like I\u2019m way more than a Realtor,\u201d Chen told me. \u201cI\u2019m like a guide to them.\u201d She\u2019s helped clients set up utility bills, get their driver\u2019s licenses, recommended places to eat and shop. \u201cI\u2019m an immigrant myself,\u201d she explained, so she knows how hard it can be to feel settled in a new place. Arizona\u2019s Taiwanese immigrants have risked a lot in coming to America, staking their futures on a new project in an unknown place at a time of extreme nativist backlash. It\u2019s a leap of faith, and it appears to have worked out.<\/span><\/p>\n TSMC\u2019s presence in Arizona has revived a way of life some thought had vanished in America: a prosperous household where one partner (usually male) works at a factory and earns enough to support a family. Think of it as the midcentury ideal with a new global twist, suburban idyll propped up by industrial manufacturing. TSMC now has more than 3,500 employees in Arizona, according to spokesperson William Moss, who said the company doesn\u2019t disclose the number of international workers it has, which can fluctuate depending on the project. Early reports claimed<\/a> that about half of TSMC\u2019s 2,200 employees at a single fab were from Taiwan. Still, it\u2019s undeniable that TSMC\u2019s presence in Arizona has led to an influx of Taiwanese immigrants in the Phoenix metro area \u2014 all while the Trump administration wages a full-fledged attack on legal immigration. TSMC is now working to cultivate local talent. In May, the company announced<\/a> it was starting a semiconductor technician training program at Arizona State University, and the university recently signed on to a White House initiative<\/a> to build up America\u2019s manufacturing workforce. As part of the partnership, ASU will organize a \u201cFoundry School\u201d taught by experts from Japan, South Korea, India, and Taiwan.<\/span><\/p>\n New businesses have popped up to cater to Arizona\u2019s growing Taiwanese community, further bolstering the local economy. North Phoenix now has a Little Taipei<\/a>. Restaurants have opened to cater to these new Arizonans, some opened by the newcomers themselves. Buildings have popped up seemingly overnight to house them. Mandarin-speaking real estate agents like Chen have found a lucrative niche selling luxe new-build homes to well-compensated tech workers, including employees of TSMC suppliers. The state has added a new holiday to its unofficial calendar: October 10th, or Double Ten Day, a commemoration of the uprising that felled the Qing dynasty. Phoenix is now home to the largest Double Ten celebration in North America. Each year, thousands of spectators ooh<\/em> and aah<\/em> at a drone show sponsored by TSMC. China Airlines started offering direct flights between Phoenix and Taipei in 2025. Taiwan\u2019s Starlux Airlines soon followed suit. The Hilton Garden Inn I stayed in, located just 10 minutes from the TSMC campus, served congee for breakfast. Scottsdale now has a Din Tai Fung. Reservations are hard to get.<\/span><\/p>\n \u201cWe call it the economic value of a gallon of water.\u201d<\/p>\n<\/blockquote>\n Some of these changes happened organically; others resulted from meticulous planning. Mackay, the economic developer, told me that the local grocery chain Fry\u2019s reached out to her office to ask what products Taiwanese customers might want to see on its shelves. Mackay set up a meeting between Fry\u2019s and TSMC, and she set up another with a Taiwanese attorney who worked with the state Department of Transportation to ensure Taiwanese immigrants\u2019 driver\u2019s licenses would be valid in Arizona. Working along Phoenix Sister Cities, a nonprofit that started in 1972, Mackay\u2019s office put together a team of Mandarin-speaking doctors and nurses to serve Taiwanese immigrants in their native language.<\/span><\/p>\n Phoenix and Taipei have been sister cities since 1979, a designation that, until recently, was largely ceremonial. As is the case in all sororal relationships, there have been conflicts, some of them over shared resources. Given the industry\u2019s demands and the state\u2019s historic drought, critics ask, is it wise to build water-guzzling factories in the middle of the desert?<\/span><\/p>\n TSMC hasn\u2019t faced nearly as much pushback for its water use as data centers have, but semiconductor manufacturing nonetheless requires massive amounts of water, and this water must be of a specific grade \u2014 free of contaminants organic or otherwise, and so devoid of minerals that it\u2019s actually not recommended for human consumption. It takes 1.4 to 1.6 gallons<\/a> of municipal water to create a single gallon of ultrapure water, since some is inevitably lost to evaporation in the process.<\/span><\/p>\n Each chip requires 50 to 250 wash cycles, Paul Westerhoff, the director of ASU\u2019s Global Center for Water Technology, told me. \u201cIf there\u2019s a little particle in there, or an ion-like chloride in there, the thing doesn\u2019t work,\u201d Westerhoff said, \u201cso they need to use a lot of water in each of these cleaning cycles.\u201d This process requires 4.75 million gallons<\/a> of water each day, which TSMC obtains through Phoenix\u2019s municipal water supply. The Arizona Republic<\/em> reports that TSMC mostly uses reclaimed wastewater, with some groundwater as well.<\/span><\/p>\n Westerhoff compared the process of semiconductor manufacturing to washing dishes. And just like you wouldn\u2019t reuse your sink water to wash a second round of pots and pans, chip manufacturers can\u2019t reuse their dirty water to wash other chips. But this water isn\u2019t totally lost. \u201cIf you want to reuse sink water, maybe you throw it out on your lawn,\u201d Westerhoff said. He explained that TSMC uses 20 percent or so of its recycled water to power its evaporative cooling systems. Part of Westerhoff\u2019s role is to figure out new ways for TSMC to use its excess wastewater \u2014 hopefully, someday, as part of the chip manufacturing process itself.<\/span><\/p>\n Sarah Porter, the director of ASU\u2019s Kyl Center for Water Policy, explained that while 15 to 20 percent of the water TSMC uses is lost to evaporation, much of the rest is processed in the company\u2019s recycling plant. According to Porter, TSMC recycles 60 to 65 percent of the water that flows through its first Arizona fab and is planning for 90 percent reuse by 2028. To get there, TSMC is building an on-site reclamation facility. The ultimate goal, however, is to figure out how to use reclaimed water in the manufacturing process. Westerhoff has called this<\/a> the \u201choly grail.\u201d<\/span><\/p>\n \u201cWhen we\u2019re talking about semiconductor manufacturing, that\u2019s very different from, say, a golf course.\u201d<\/p>\n<\/blockquote>\n The fact that TSMC can recycle most of the water it consumes differentiates it from some of the state\u2019s traditional industries. And even if TSMC were to someday use more water than some of Arizona\u2019s more conventional enterprises, the region\u2019s leaders say the tradeoff would be well worth it. \u201cWe call it the economic value of a gallon of water,\u201d Mackay told me. \u201cThat gallon of water can do a huge amount for the region, or it can do nothing for the region.\u201d In Mackay\u2019s estimation, TSMC has earned its keep and then some.<\/span><\/p>\n TSMC brought with it an entire industry. So far, 55 TSMC suppliers have set up shop in Arizona, as per Mackay, and more are on their way. Topco Scientific, a Taiwanese materials integrator that works closely with TSMC, opened an outpost in Phoenix in 2022, operating at a loss for years until TSMC\u2019s first fab was up and running. Chang Chun, a Taiwanese petrochemical firm, now manufactures electronic-grade hydrogen peroxide in Casa Grande, a city of some 70,000 people halfway between Phoenix and Tucson. Rebecca Chen, the Phoenix-based real estate agent, has moved into the commercial and industrial market, which she said is hotter than ever. Applied Materials, another supplier, opened a $270 million research and development facility at ASU last fall. New construction projects are underway, many of them clustered around TSMC\u2019s growing campus. Among them is Halo Vista, a $7 billion, 2,300-acre master-planned community developed by a New York real estate firm.<\/em> Business is booming. TSMC reported $514 million in profit<\/a> at its Arizona site in 2025, its first full year of production. And the average hourly wage in the Phoenix metro area climbed to $33.48 from $22.85 a decade earlier, outpacing inflation.<\/span><\/p>\n The TSMC complex uses more water in nine days than Project Blue is expected to consume in a year, but TSMC has also boosted the state economy in a way no data center could. Data center developers used to pitch the projects to local governments by emphasizing the fact that they don\u2019t create many permanent jobs; communities would get infrastructure and tax revenue but none of the congestion that comes with rapid population growth. But now, after years of AI executives warning that the product they\u2019re building could vaporize entry-level work \u2014 and potentially cause a literal apocalypse \u2014 more communities see data centers as a lose-lose proposition. TSMC\u2019s chips make the generative AI boom possible, but unlike data centers and AI itself, they actually create jobs.<\/span><\/p>\n \u201cWhen we\u2019re talking about semiconductor manufacturing, that\u2019s very different from, say, a golf course,\u201d Porter said. Arizona\u2019s golf courses, in fact, have historically used far more water than the state allows, much of it sourced from the rapidly drying Colorado River. An investigation<\/a> by The Arizona Republic<\/em> found that the state\u2019s golf courses consumed nearly 39 billion gallons each year between 2002 and 2022. \u201cThat water,\u201d Porter added, \u201cis not reclaimed.\u201d Where TSMC can go through as much as 1.7 billion gallons of water a year, much of which is recycled, golf clubs and courses in Arizona\u2019s active management areas consumed<\/a> upwards of 41 billion gallons of water in 2020 alone \u2014 and that water is largely lost to evaporation. And still, golf courses use just 2 percent of Arizona\u2019s water, or 9 percent of water in municipal areas. When it comes to overall water use, putting greens and semiconductor manufacturers are, to use an apt turn of phrase, a drop in the bucket.<\/span><\/p>\n But critics of semiconductor manufacturing say that the amount of water the industry uses is just part of the problem. \u201cThere\u2019s water quality, and there\u2019s water quantity \u2014 or water use and water contamination,\u201d Judith Barish, the coalition director of CHIPS Communities United, told me. The coalition, made up largely of labor and environmental groups, was founded in the wake of the CHIPS and Science Act, which designated $52.7 billion in funding for domestic semiconductor manufacturing. Its goal is to ensure that communities, not corporations, reap the benefits of the tech boom.<\/span><\/p>\n Semiconductor manufacturing involves the use of hundreds of different per- and polyfluoroalkyl substances, or PFAS, which are commonly referred to as forever chemicals because they don\u2019t naturally break down. The durability of these chemicals means they won\u2019t be degraded during the manufacturing process, which can involve hundreds or even thousands of steps. But the qualities that make PFAS so essential to chipmaking are precisely what make them so dangerous to people. Some researchers have linked forever chemicals to liver and kidney issues, high cholesterol, birth defects, and various cancers. The use of forever chemicals isn\u2019t limited to chip manufacturing, or to the tech industry writ large \u2014 PFAS have been found<\/a> in nonstick pans, dental floss, shampoo, menstrual care products, food packaging, and even food itself \u2014 but the semiconductor industry, by nature of the manufacturing process, uses a significant amount of chemicals that are detrimental to human health.<\/span><\/p>\n Some researchers have linked chip manufacturing to thyroid and liver diseases, fertility problems, and cancer \u2014 an especially ironic outcome, given AI boosters\u2019 claims<\/a> that the technology will cure cancer within our lifetimes. Women who worked in chip fabs during the \u201980s manufacturing heyday were twice as likely<\/a> to suffer miscarriages than women who didn\u2019t, and their children were also more likely to experience birth defects. And because each step of semiconductor manufacturing requires thousands of gallons of water, these chemicals ultimately become liquid waste. A single fab can produce tens or hundreds of thousands of gallons of wastewater a day, discharge one bimolecular researcher described<\/a> as a veritable \u201csoup\u201d of forever chemicals.<\/span><\/p>\n Traditional wastewater treatment methods often fail to detect forever chemicals, and most semiconductor manufacturers aren\u2019t required<\/a> to monitor or test for PFAS. Compounding the problem, the exact chemical cocktails used in chip fabs are closely guarded trade secrets. But TSMC says<\/a> it has \u201ccontinuously optimized\u201d its in-house PFAS detection systems and is developing technologies to remove PFAS from its wastewater streams. The company also says it\u2019s studying how and when it can use non-PFAS alternatives in the manufacturing process. And Porter pointed out that unlike Tucson, where groundwater has been contaminated by military bases<\/a> and manufacturing, Phoenix doesn\u2019t have much of a PFAS problem, and city leaders are interested in keeping it that way. Phoenix requires TSMC to treat its water before putting it back into the municipal wastewater system, Porter said. And all Arizona cities are required to comply with standards set by the Environmental Protection Agency.<\/span><\/p>\n Still, for organizers like Barish, wastewater disposal remains a concern. While TSMC and other chip manufacturers have to comply with city and EPA standards, Donald Trump has largely defanged the<\/a> EPA and eased restrictions on PFAS in drinking water<\/a> since returning to office. But concessions for chip manufacturers have been largely bipartisan. The Building Chips in America Act \u2014 sponsored by Sen. Mark Kelly (D-AZ) and signed into law by President Joe Biden \u2014 exempted semiconductor manufacturing from key environmental review.<\/span><\/p>\n\n
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