THE CRUNCH
Arizona was happy to hand its water to chip factories, but a bipartisan coalition of residents is now fighting new hyperscale data centre developments from Phoenix to Tucson, according to a feature report by The Verge. The state hosts the largest chip factory this side of the Pacific, TSMC's Arizona complex, which draws nearly 5 million gallons a day from Phoenix's municipal supply, plus 172 data centres that faced little opposition. The newer, larger data centre proposals, however, demand more water, power and land than Arizonans are willing to give, and city council meetings have drawn dozens of speakers against projects.
The backlash marks a shift from the welcome given to TSMC, which Phoenix's economic development office spent years courting after the company began seeking a US location in 2016. Announced in 2020 with a predicted $12 billion investment by 2029, TSMC's projected spending has since ballooned to $265 billion, which the company touts as the largest foreign direct investment in US history. Its second fab is finished, a third is under construction and more are planned.
Data centre developers have tried to win locals over with promises of jobs, tax revenue and infrastructure, and reassurances about modest water use. Google's facility in The Dalles, Oregon, for example, uses about 1.5 million gallons a day, roughly a third of what TSMC's Arizona complex consumes. Those arguments have gained little traction with residents confronting a looming cut to Colorado River supplies.
Locals on both sides of the debate say they want a more prosperous Arizona, but their visions are at odds. Over the past two years, opponents have taught themselves zoning, land use and water consumption rules to fight the projects, while TSMC's operation continues largely unopposed.