A man walks past the TSMC logo at the company’s headquarters in Hsinchu, Taiwan.
Sam Yeh | AFP | Getty Images
Computer chips may be scarce, but the semiconductor industry’s carbon emissions are plentiful.
The little pieces of silicon are vital in today’s technology-driven economies, but their effects on the planet are not always positive.
Tremendous amounts of energy are required to make the chips that sit under the hood of many items – from jet fighter jets and automobiles to kettles and doorbells.
A team of researchers from Harvard University wrote in 2020 that chip manufacturing accounts for “most of the carbon emissions” of electronic devices.
While some of this energy comes from renewable sources, much of it comes from fossil fuels like coal and gas, and some chip makers are now emitting more carbon than well-known automakers.
Forrester analyst Glenn O’Donnell said several aspects of the semiconductor manufacturing process require enormous amounts of energy.
First, chip makers have to take raw silicon (sand), melt it down, clean it, and then “grow” the silicon “rods”, O’Donnell told CNBC. “The ovens [needed] doing this is extremely energy hungry, “he said.
The sticks of purified silicon are then “sliced into thin wafers like delicatessen” on which chips are built, O’Donnell added.
Various materials are layered onto the wafers in a series of steps using energy intensive equipment. Diffusion furnaces, ion implanters, and plasma etch machines all use significant amounts of energy, O’Donnell said, adding that some require very high temperatures.
The diffusion furnaces, for example, run at 1,200 to 2,000 degrees Fahrenheit and the wafers stay in them for hours to change the surface properties of the silicon.
Taiwan’s chip giant
Most of the world’s chips are made in Asia, with Taiwan being a special hotbed of activity thanks to the presence of Taiwan Semiconductor Manufacturing Company, which produces more chips than any other company in the world.
Yung-Jen Chen, a Greenpeace researcher in Taiwan who heads the charity’s climate enterprise team, told CNBC that the company emits more carbon than any other chip maker. It is “way ahead” [of] others, ”she said.
The company, headquartered in Hsinchu, which makes chips for Apple and Tesla, uses more electricity every year than Taiwan’s capital Taipei, according to Greenpeace.
Due to its electricity consumption, TSMC emitted 6 million tons of carbon in 2017, 8 million tons in 2019 and 15 million tons in 2020. In recent years, TSMC’s greenhouse gas emissions have surpassed automotive giant GM’s, according to data from Bloomberg.
Gartner analyst Alan Priestley said it was important to compare emissions from the semiconductor industry with emissions from other industries such as logistics, aviation and shipping.
TSMC’s emissions, which are featured in its annual sustainability reports, are “still growing rapidly due to continued expansion,” said Chen.
In fact, TSMC is in the process of building huge new factories in Taiwan and Arizona. While these multibillion dollar facilities will increase the supply of chips, they will also increase the power consumption of TSMCs.
Conversion to renewables
“Switching power sources to clean energy is key to reducing carbon emissions,” said Chen, adding that chipmakers are “eager” to do it as soon as possible.
After TSMC, Samsung and Intel have the second largest carbon footprint in the semiconductor industry, Priestley said. “As in most industries, the size of the company affects the carbon footprint,” he said. “The emissions will scale with the size and number of fabs. The larger the semi-supplier, the larger its carbon footprint will be.”
The industry heavyweights told CNBC that they are taking steps to ensure they are reducing their emissions as they expand their operations.
The pledges come as the world sees what Prime Ministers and Presidents commit to at the COP26 climate change conference in Glasgow, UK
This summer, TSMC announced it would achieve net zero emissions by 2050. In addition, it has set itself the goal of achieving 40% of the use of renewable energies throughout the company by 2030.
This will not be easy given the composition of Taiwan’s energy mix. In 2019, 91.5% of Taiwan’s primary energy was generated from fossil fuels, according to data from BP’s Statistical Review of World Energy Report.
TSMC currently consumes 4.8% of Taiwan’s total electricity production and is expected to increase to 7.2% in 2022, according to Greenpeace.
Nina Kao, TSMC’s deputy spokeswoman, told CNBC that the company plans to buy more renewable energy and carbon credits. The company also wants to improve the efficiency of the systems in its factories and implement other energy-saving projects.
In July 2020, TSMC signed a 20-year contract with Orsted to purchase the entire production of two offshore wind farms under development off the west coast of Taiwan.
Samsung and Intel
Samsung’s chip factories emitted 12.9 million tons of CO2 equivalents in 2020, making them the second largest CO2 emitter in the semiconductor industry.
“We are constantly assessing the environmental impact of greenhouse gas emissions throughout the manufacturing cycle,” a company spokesman told CNBC, adding that the company is optimizing process technologies and materials to make its chips in an environmentally friendly way. Samsung hasn’t officially announced its own net zero target, but the company is an integral part of South Korea’s vision of becoming climate neutral by 2050.
Rival Intel has been praised for reducing its CO2 emissions in recent years.
In 2020, the company produced 2.88 million tons of CO2 equivalent, despite consuming 10.6 billion kilowatt hours of energy worldwide. A single Arizona factory used 561 million kilowatt hours of energy in the first three months of 2021.
Fawn Bergen, corporate sustainability manager at Intel, told CNBC that “reducing operational energy consumption is at the core of Intel’s global climate strategy” and its goals for 2030.
According to Intel, in 2020 82% of its energy came from “green” sources such as sun and geothermal energy.
The chipmaker, headquartered in Santa Clara, said it carried out several projects last year that helped it save 161 million kWh of energy. This year, similar projects will help save an additional 125 million kWh of energy, Intel said.
Abishur Prakash, a geopolitical strategist at the Center for Innovating the Future, told CNBC that putting pledges into practice will be the hard part.
“What if India proposes that all new smartphones have to come from green factories by 2030?” he said.
“Another challenge is that companies like Apple could set a goal for themselves,” added Prakash. “In order to achieve these goals, however, it is necessary that the supply chain – spread over several levels – also go on board and develop its own ESG strategies (environmental, social and corporate governance). It won’t be easy. “