- iFixit iOpener Set
- T4 Screwdriver
- T3 Screwdriver
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After about 60~90 seconds, use Opening Picks (or a slot screwdriver that's thin enough to fit) to pry open the back cover from upper right corner
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Remove the screws (T4) that keeping the black plate attached to the frame and remove the black plate
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Disconnect all 3 connectors from the logic board and take out the logic board from the Keyboard frame
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Remove the power switch from upper left corner (T3)
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Carefully remove the sticker(?) from the connector and disconnect Touch ID sensor from the connector
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Unscrew the mounting screws around the Touch ID sensor (T3), and remove the Touch ID sensor
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Carefully remove the flex cable used to connect Touch ID sensor
Now you have all the parts to put together a standalone Touch ID device for your Apple silicon Mac.
After connecting the Lightning connector and Touch ID sensor back to the logic board, you can pair the Touch ID sensor with your Mac under System Preferences.
If the pairing step doesn't appear when you go to Touch ID settings -> add a new fingerprint, make sure the Touch ID sensor is correctly connected and try power cycle the Touch ID device.
I love Apple Extended Keyboard II, and I use it everyday with my Mac. So naturally I wanted to improve it with a Touch ID — and I finally did, using this tutorial, some other videos and some creativity. After retrieving the components, I mounted them at the bottom of my AEKII

(it required some trimming of plastic molds but nothing major)
I had to cover the battery with some extra layer of thick paper to prevent it being poked by the soldered ends from the PCB:

I used one of the port openings on the side for installing the Touch ID sensor

In a typical Apple fashion, I did the Lighting port at the bottom — I figured I don't need to charge it too often, so it will do.
I paired it with my Mac, and it works, which is kind of amazing! :)
Thank you everyone for a ton of input here, it definitely helped me not to screw up things.