Semiconductor chips are the backbone of modern electronics, powering every device from smartphones to industrial machines. However, producing these chips demands significant energy and water resources. The manufacturing process involves multiple stages, from wafer fabrication to photolithography, etching, doping, and packaging. Each stage requires extreme precision and machinery that is power intensive. Semiconductor fabrication plants (fabs) operate 24/7, consuming vast amounts of electricity for cooling and production, while ultra-pure water is indispensable for cleaning wafers, exacerbating water scarcity concerns. The global supply chain of the industry amplifies emissions, as raw materials and components travel extensive distances before assembly. Moreover, short product lifecycles contribute to mounting e-waste, which adds to sustainability constraints, urging the industry to rethink its approach to greener production.
As the digital age advances, it’s crucial to inquire about the environmental cost accompanying our tech-driven lifestyles and, more importantly, how semiconductor companies are stepping up to the sustainability challenge. Greenpeace International estimates that semiconductor manufacturing will consume 237 terawatt-hours (TWh) of electricity globally by 2030, a figure comparable to Australia’s total electricity consumption in 2021. Semiconductor fabs (fabrication plants) also emit greenhouse gases (GHGs), including perfluorocarbons (PFCs), which are thousands of times more potent than CO2. The challenge isn’t just about reducing energy consumption. It’s about redesigning the entire supply chain to be more sustainable, which is exactly what companies are starting to do.
The Environmental Footprint: What’s Being Done?
Chip manufacturers are increasingly turning to renewable energy sources to power their fabs. Companies such as TSMC and Intel have pledged to reach 100% renewable energy use in their operations by 2030. TSMC’s 2022 sustainability report stated that the company purchased 9 billion kWh of renewable energy, which is enough to power 800,000 homes annually, and its Arizona fab will source 20% of its energy from renewables from 2024 via local solar projects. The Semiconductor Industry Association (SEMI) released its sustainability survey, highlighting 60% of chip manufacturers committing to 2030 renewable energy targets.
The industry is shifting to low-global-warming-potential (low-GWP) materials to replace harmful gases such as SF6 and NF3, which have been major contributors to emissions. Companies such as Lam Research Corporation are using remote plasma systems to reduce NF3 consumption by 40% compared to traditional methods. Despite the promising investments to reduce emissions, transitioning to alternatives such as C4F8 increases costs by 10 to 15%. To mitigate increased costs, novel strategies are applied, such as the installation of NF3/C4F8 recovery systems by Samsung Electronics in its Hwaseong Fab, reusing 40% of gases and lowering annual procurement costs by USD 12 million as per the company’s 2023 ESG Report.
Rethinking the Building Blocks of Chips
Water is a major ingredient in chip manufacturing. A single fab can use millions of gallons of water per day. The push toward closed-loop water recycling systems is helping fabs reuse much of their water. For instance, GlobalFoundries recycles 45% of water, amounting to 12 million gallons per day, using closed-loop systems. They also partnered with the local wastewater authority to treat and reuse effluent, targeting 60% by 2025. Closed-loop systems have become standards for new facilities, boding well for the sustainable future of the semiconductor industry.
Silicone has long been the backbone of chip production, but researchers are now exploring alternative materials such as gallium nitride (GaN) and graphene, which could be more energy-efficient. Google’s Sustainability Report 2022 reported a reduction in server power losses using GaN-based power supplies.
A Reality Check: Challenges Faced by the Semiconductor Industry
While progress has been steady, the semiconductor still faces significant hurdles on the path to sustainability. One of the most pressing impediments is the PFAS controversy. Research has linked PFAS exposure to a range of health issues, including cancers, hormonal disruptions, and immune system impairments. Recently, in December 2024, the U.S. Environmental Protection Agency (EPA) was expediting the approval of new PFAS chemicals for semiconductor manufacturing, even as concerns grow over their long-term environmental and health impact.
New semiconductor fabs are being built globally to meet demand, but how do we ensure they are sustainable from day one? That’s the big question regulators and manufacturers are tackling. With concerns rising, SEMI reports 42 new 300mm semiconductor fabs are under construction or planned globally between 2022 and 2024, driven by the demand for EVs, AI, and IoT devices.
What’s Next? A Collective Effort Among Governments and Industry Giants
For the semiconductor industry to truly ‘chip in’ in sustainability efforts, stronger government policies and industry-wide collaboration will be essential. A unified approach involving policymakers, industry leaders, and researchers is the need of the hour. Governments must implement stricter environmental regulations, while companies require investments in greener technologies supported by innovations by research institutions to create a collaborative framework for progress. Examples of favorable regulatory initiatives include the European Chips Act, which has mandated that all new EU fabs must be carbon-neutral by 2030, while Carbon Border Adjustment Mechanism tariffs pressure global suppliers to decarbonize. Similar supportive regulations are found in the K-Chips Act of South Korea, which provides tax credits for fabs investing in renewable energy, and the Green Semiconductor Manufacturing Initiative of Singapore, which provides tax rebates for companies using low-GWP chemicals.
Collaboration across the supply chain is essential, with semiconductor companies, equipment manufacturers, and even consumers playing a role in driving sustainability efforts. Industry-wide initiatives such as the Semiconductor Climate Consortium (SCC) are helping bolster sustainability efforts. The collective effort also hinges on consumer awareness; as demand for electronics grows, choosing sustainable tech brands and supporting circular economy initiatives can make a difference. The UN Global E-Waste Monitor of 2023 found that more than 50% of consumers now recycle electronics, an upward trend from 44% in 2020, while Apple reported that more than 70% of its customers cite the company’s carbon neutrality as a factor in loyalty. Moreover, as a testament to consumer demand, Apple has announced that it will use 100% recycled cobalt batteries by 2025 in its iPhone lineup.
The Race for Greener Chips
The semiconductor industry stands at the heart of the digital revolution, but its long-term sustainability will depend on how swiftly it adopts environmentally responsible practices. Advancements in artificial intelligence, renewable energy, and alternative materials are driving progress, yet significant challenges persist. As the demand for smarter, faster, and more efficient chips continues to grow, the industry’s focus must extend beyond performance to ensuring that manufacturing processes are both resource-efficient and environmentally sustainable.
