Arizona's Chips Run on a River That Just Got Cut

On July 31 the federal government released its framework for operating the Colorado River after 2026. Arizona, California and Nevada absorb the reductions. The Upper Basin faces no mandatory cuts. In the worst case scenario, Arizona loses up to 40 percent of its share. Because of the bargain that authorized the Central Arizona Project in 1968, our water sits junior in priority, which means we feel it first.

This lands on the state that just bet its future on semiconductors, on the families moving here to fill those jobs, and on the housing that has to hold them.

The surprise is that the fabs are the efficient users. TSMC's first Phoenix fab runs on roughly 4.75 million gallons a day and recycles about 65 percent of it. The reclamation plant coming online in 2028 is built to push that past 90 percent and cut that fab's demand below 1.2 million gallons a day. Agriculture, meanwhile, still uses about 74 percent of Arizona's water. Nobody asks how many jobs an acre foot of alfalfa creates.

That is the metric we are missing. Jobs and output per acre foot.

Once you use it, the path opens up. Move water rather than only rationing it, and scale Ag to Urban conversion, which covers enough eligible acreage to support more than a million homes. Give builders a settled assured water supply rule so housing can be planned. Finance water reuse infrastructure the way we financed the fabs, because treatment plants are semiconductor infrastructure. And negotiate the border into the answer, since Mexico's share of this same river expires on December 31, the same day our domestic rules do.

I have worked this border my whole career. Every durable solution I have seen ran through both countries, not around one of them. Water will be no different.

Marco A. López, Jr. is Founder and CEO of  Intermestic Partners.

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