TSMC’s north Phoenix campus now uses 4.75 million gallons of water per day, and the company plans to more than triple its fab count in the state.
Engineers at the company’s Water Resource Center confirmed the daily figure to AZFamily in August, in the most detailed public accounting yet of what the world’s largest chipmaker consumes in the desert. The campus, which started with a $12 billion commitment in 2020, has grown into a $265 billion project, the largest foreign direct investment in a greenfield project in American history. Current plans call for six logic fabs, two advanced packaging facilities and an R&D center, with four more fabs added to the roadmap in July.
Water is the resource chipmaking cannot avoid. Fabricating a wafer requires ultra-pure water to rinse chemicals off the surface at each processing step, and a large fab can use millions of gallons daily. TSMC’s first Arizona fab, in production since late 2024, uses about 5,300 acre-feet per year, roughly 1.7 billion gallons, enough to supply about 15,000 Phoenix households.
| Measure | Figure |
|---|---|
| Daily water intake, Phoenix campus | 4.75 million gallons |
| Share recycled on site | 65%, about 3.5 million gallons |
| First fab annual use | About 1.7 billion gallons |
| Planned fabs in Arizona | 10, plus two packaging plants |
| Total committed investment | $265 billion |
| Recycling target | 90% by 2028 |
Where the water comes from
TSMC receives its water through the City of Phoenix, which draws from the Salt and Verde river systems, the Colorado River via the Central Arizona Project Canal, a small amount of groundwater and reclaimed wastewater. Sarah Porter, director of the Kyl Center for Water Policy at Arizona State University, told AZFamily that most of the north Phoenix campus supply will likely come from Colorado River water delivered through the canal.
Phoenix used groundwater for only about 1% of its supply in 2024, according to a Kyl Center report, which keeps the city in a stronger position than rural Arizona districts that depend on aquifers. The city holds an “assured water supply” designation, a state requirement that it demonstrate a 100-year water guarantee for the demand it commits to. Porter noted that cities depending on the Colorado River have not yet built out demand for their full allocations, which gives Phoenix a buffer against shortage declarations.
That buffer is not unlimited. The Colorado River has been in shortage conditions since 2022, and the seven basin states are negotiating new operating rules that take effect after the current guidelines expire this year. Every acre-foot committed to a fab is an acre-foot not available for growth elsewhere in the city.
Recycling closes most of the loop
TSMC’s engineers say the campus recycles 65% of its intake, about 3.5 million gallons a day, through an on-site treatment system that feeds factory wastewater back into chillers and scrubbers. Process water engineer Paige Benson described the loop to AZFamily: “We take factory waste, treat it here in-house, be able to remove some of the contaminants, and then from there, feed it back into our chillers.”
The remaining 35% largely evaporates, mostly through cooling towers. Evaporative cooling is standard across Arizona industry, but it is the part of the water balance that never comes back. Porter estimated the evaporated share at around 15% or more of intake.
The company has broken ground on a 15-acre industrial water reclamation plant, expected to be operational in 2028, that would lift the recycling rate to 90% or more. Until then, each new fab that comes online adds to the net draw. The second fab is built but will not start production until the second half of 2027, so the campus water footprint is set to grow before the reclamation plant can offset it.
The wider strain
Phoenix is not the only Arizona city hosting fabs. Intel has operated in Chandler for four decades and used more than 5.2 billion gallons of water in the state in 2020, about 20% of it reclaimed. Intel runs a brine reduction facility with the city that returns 2.5 million gallons of wastewater a day to drinking standard, with part reused by the company and part released to replenish groundwater or supply surrounding communities.
Critics say the state’s regulatory response has not kept up. Jennifer Martin-McLeod, who has worked on Arizona water issues for over a decade, wrote in the Arizona Republic in July that the CHIPS and Science Act promised to bring chip manufacturing home while protecting the environment, and that promise has not been kept. She points to fabs and data centers straining water while state regulators lag on rules for industrial PFAS discharge.
Local sentiment is mixed. Letters to the Arizona Republic after the TSMC coverage ranged from concern about Lake Pleasant drawdowns to residents noting that the state has welcomed the industry for decades. The Greater Phoenix Economic Council counts more than 140,000 jobs in semiconductor-relevant occupations in the metro area, a workforce that did not exist at this scale before 2020.
The production math also tempers expectations. ASU supply chain economist Hitendra Chaturvedi calculates that TSMC’s Arizona fabs at full capacity in 2030 would produce about 1.2 million wafers a year, against roughly 17 million for the company worldwide. Arizona would then hold about 7% of TSMC’s global output, after a $265 billion investment. Whether that trade is worth the water is a question Phoenix will keep answering one fab at a time.