The Invisible Trillion · The Water Question, Honestly

Where It Actually Matters

Now the other side of the honesty.

In some specific places, at some specific times, the water use of chip fabs and data centers is a real, serious, local problem. I want to name these because a book that only defended the industry would be as dishonest as one that only attacked it.

Taiwan. TSMC’s fabs sit in a region that has experienced serious droughts in recent years. In 2021, Taiwan went through its worst drought in 50 years, and the government had to prioritize water for fabs over agriculture, because the fabs are more economically valuable per gallon. This is a real tradeoff, and Taiwanese farmers were, legitimately, upset. TSMC has since built water recycling facilities that dramatically reduce their fresh water draw, but the fundamental vulnerability — the world’s most economically important fabs sitting in a drought-prone island — remains real.

Arizona. The data center boom of the 2020s has put a lot of new capacity in the Phoenix area, which is in the middle of a 20-year megadrought in the Colorado River basin. Some of the new data centers use closed-loop cooling that consumes almost no water. Some use evaporative cooling that consumes a lot. Which kind of data center is built where has become a live political question in Arizona, and reasonably so.

Parts of Spain. Similar story: new European data center capacity being built in water-stressed regions, with local communities justifiably wanting to know which kind of cooling is going in.

Google’s and Microsoft’s disclosures. Both companies publish annual environmental reports, and both have reported rising water use year-over-year as they’ve built out AI infrastructure. Google’s water use grew 20% in 2022 over 2021, to about 5.5 billion gallons across all operations. That is a real increase, concentrated in real places, and critics who point it out are not making it up. The companies have committed to “water positive” operations by 2030, meaning they will return more water to local watersheds than they consume, but those promises are not yet fulfilled, and skepticism is warranted until they are.

The fabs that are coming. The US government is spending tens of billions of dollars to subsidize new chip fabs being built in Arizona, Texas, Ohio, and New York. All of these will use millions of gallons a day. In some of the locations, water availability is already a stress point. The policy debate about chip reshoring has not, so far, grappled seriously with the water side of the question, and it probably should.

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