TSMC's 5 million gallons a day meet Arizona's data center backlash

Phoenix courted TSMC for years — the company began scouting a US site in 2016, and the city sent a delegation to Taiwan in 2019 — before the chipmaker committed, eventually projecting $265 billion in Arizona spending. That courtship paid off in jobs and what TSMC calls the largest foreign direct investment in US history, but it also normalized heavy industrial water use in a desert state.

The newer wave of data center proposals arrived into a different climate. After a 3-2 vote by the Pima County Board of Supervisors to rezone 290 acres and sell it to Beale for around $20 million, Tucson Electric Power announced a rate hike of about 14 percent just hours later — a coincidence the utility says was unrelated, but one that fueled public anger. A report that Project Blue would consume more than four golf courses' worth of water each year added to the pressure.

Beale's concessions — switching from water cooling to closed-loop air cooling, promising aquifer recharge, and pledging $15 million in donations — did not quiet opponents, who argue air cooling simply shifts water use to power plants. Amazon reportedly pulled out of the project over the air-cooled design, leaving the facility's tenant situation unclear.