Unbelievable! Chip Makers in a Fierce Battle to Slash Emissions Amidst Skyrocketing Demand

Title: The Intersection of Green Technology and Carbon Footprints in the Chip Manufacturing Industry

Introduction:
The push for a greener future is not at odds with technological advancements. In fact, policy experts from renowned institutions, such as the International Energy Agency and the World Economic Forum, emphasize the importance of smart, data-driven energy systems in achieving net-zero greenhouse gas emissions. However, a surprising revelation has emerged: the chips that power clean technology, from wind turbines to electric vehicles and smart grids, have a significant carbon footprint. Chip production, not energy consumption, is found to be responsible for the majority of electronic device carbon output. This article explores the impact of chip manufacturing on carbon footprints, with a particular focus on the Asian market, and discusses the efforts of chipmakers to reduce their environmental impact.

The Carbon Footprint of Chip Manufacturing:
1. Majority of carbon emissions from chip manufacturing: According to Harvard research released in 2020, chip production is the primary contributor to electronic device carbon output, rather than energy consumption. This suggests that tackling chip manufacturing emissions is crucial in greening the industry.
2. Water usage and carbon emissions: Chip manufacturing plants consume large amounts of water, leading to significant carbon emissions through transport and purification. Each cubic meter of water used in chip production creates over 10 kilograms of carbon emissions. This highlights the environmental impact of water-intensive manufacturing processes.
3. Emissions increase with demand and facility size: The surging demand for chips in recent years has led to increased energy consumption by manufacturers. As companies scramble to build capacity, the carbon footprint of chip production also escalates. Asia-Pacific, particularly countries like South Korea and Taiwan, dominates the semiconductor industry, but their carbon footprints do not align with their climate goals.

Efforts to Reduce Carbon Footprints:
1. Green energy adoption: Chipmakers like Samsung, TSMC, and SK Hynix have announced ambitious plans to transition to 100% renewable energy sources by 2050. This move aims to align with the Paris Agreement’s goal of limiting global warming to 1.5°C above pre-industrial levels. However, the transition to renewable energy is challenging for Asian chip manufacturers due to the heavy reliance on fossil fuels in the region.
2. The role of green hydrogen: Hydrogen is a crucial input for chip production, and access to affordable “green” hydrogen generated without CO₂ emissions is a major goal for manufacturers. The successful adoption of green hydrogen as a mainstream fuel relies on competitive production from renewable energy sources.
3. Infrastructure challenges: Building the necessary infrastructure for hydrogen transport and delivery is a time-consuming and expensive process. However, companies like Samsung C&T are forming alliances with shipping and construction firms to establish a complete hydrogen industry value chain. Additionally, clean hydrogen derived from ammonia provides a viable alternative for transporting over long distances.
4. Energy storage systems: In a bid to address the intermittent nature of renewable energy sources, chip manufacturer subsidiaries like Samsung SDI and SK Hynix are at the forefront of energy storage system development. These systems maximize the efficiency of wind and solar power by storing electricity during off-peak hours. The market for energy storage systems is expected to double in size by 2030, presenting a profitable business opportunity for these chipmakers.

Moving towards a Greener Future:
1. Financial interests aligning with environmental goals: The subsidiaries and affiliates of Asian chipmakers hold significant expertise in green energy solutions. This alignment of financial interests with environmental regulations provides a unique opportunity to drive change and reduce emissions in the chip manufacturing industry.
2. Overcoming challenges for a sustainable future: The push for a greener future in chip manufacturing requires addressing challenges such as transitioning to renewable energy sources, enhancing hydrogen production from green sources, building infrastructure for hydrogen transportation, and scaling energy storage systems. However, these efforts will contribute to the growth of sustainable technologies like green hydrogen and storage systems.

Conclusion:
While a greener future heavily relies on smart, data-driven energy systems, it is crucial to acknowledge and address the carbon footprint associated with chip manufacturing. Asian chipmakers, despite dominating the semiconductor industry, have not yet aligned their carbon footprints with climate goals. However, companies like Samsung, TSMC, and SK Hynix are taking bold steps to transition to renewable energy sources and explore the potential of green hydrogen and energy storage systems. These efforts not only reduce emissions but also drive innovation and growth in the clean technology sector. By tackling the carbon footprint of chip manufacturing, the industry can truly pave the way for a greener future.

Summary:
The article highlights the significance of smart, data-driven energy systems in achieving a greener future. However, chip manufacturing, not energy consumption, is responsible for the majority of electronic device carbon output. The article explores the impact of chip production on carbon footprints, particularly in the Asia-Pacific region. It discusses the efforts of chipmakers like Samsung, TSMC, and SK Hynix to reduce their environmental impact through the adoption of renewable energy and the exploration of green hydrogen and energy storage systems. The article concludes by emphasizing the importance of overcoming challenges and aligning financial interests with environmental goals in driving sustainable change.

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A greener future is not necessarily a less technological future. Quite the opposite: Policy experts from the International Energy Agency and the World Economic Forum see smart, data-driven energy systems as critical to achieving net-zero greenhouse gas emissions.

But the chips at the heart of all that clean tech, found in everything from wind turbines to electric vehicles and smart grids, have a big carbon footprint.

Second Harvard research released in 2020, chip production, not energy consumption, accounts for the majority of electronic device carbon output. Take water use: A chip manufacturing plant may use tens of thousands of cubic meters a day, with each cubic meter creating over 10 kilograms of carbon emissions through transport and purification.

The record growth in demand for chips in recent years also means more energy is being used by manufacturers. Emissions increase with the size of manufacturing facilities, which means the carbon footprint increases as companies scramble to build capacity.

The problem is most pronounced in Asia-Pacific, which dominates the global semiconductor industry, with regional revenues of $330 billion in 2022, more than half of the global total. South Korea and Taiwan are home to the most advanced chip makers, and while both countries aim to achieve net zero emissions by 2050, their semiconductor giants currently have carbon footprints to match.

For example, in 2020, Taiwan’s emissions TSMC extension — from its own operations (so-called Scope 1) and from purchased energy (Scope 2) — were about 10 million tons, not very far from the levels of Taipei City. of South Korea SAMSUNG emitted 15.6 million tons in 2021.

Now, however, chipmakers are trying to reduce those footprints, aided in some cases by sister companies with green energy expertise.

Making greater use of renewable energy may seem like an obvious way for these companies to get closer to net zero: In 2021, for example, renewables accounted for just 9 percent of electricity use at TSMC’s manufacturing facilities.

But it remains a difficult task in Asia. Nearly all of Taiwan’s energy, and about two-thirds of that of South Korea, comes from fossil fuels. And none of the big chipmaker’s climate pledges align with the Paris Agreement goal of limiting global warming to 1.5C above pre-industrial levels. according to one report by campaign group Greenpeace.

Even so, companies including Samsung, TSMC, and South Korea SK Hynix have announced aggressive steps to get all of their energy from renewable sources by 2050. These efforts should give a further boost to two growth technologies: green hydrogen and energy storage systems.

Hydrogen is already a crucial input for chip production plants. Access to affordable “green” hydrogen, produced without generating CO₂, has long been a key goal for manufacturers. In Europe, the change has begun, with gas company Linde supplying chipmaker Infineon in Austria.

This potential for hydrogen as a fuel it has attracted further interest. “Hydrogen will undoubtedly play an important role as a fuel in many regions of the world,” says Juergen Guldner, general project manager for hydrogen technology at automaker BMW. “Hydrogen is one of the most efficient ways to store and transport renewable energy, making it a key player in future energy supplies.”

The problem is that most hydrogen is currently derived from fossil fuels, with significant CO₂ emissions. That will have to change if it is to become mainstream fuel, Guldner says. “The success of hydrogen will depend on the competitive production of sufficient quantities of hydrogen from green energy,” she points out.

Another challenge is to create the infrastructure capable of transporting hydrogen as a fuel to end users. Samsung’s engineering branch, Samsung C&T, has formed alliances with local shipping and construction companies to build a complete hydrogen industry value chain, from overseas production of green hydrogen to domestic delivery. It also produces and distributes clean hydrogen derived from ammonia, which is considered easier to transport over long distances. Another Samsung unit specializes in green propulsion systems for ships, including hydrogen carriers.

But building infrastructure is a slow and expensive process. A more immediate solution to the green energy shortage has been to increase the use of energy storage systems. These can compensate for the intermittence of wind and solar power, maximizing its efficiency by storing electricity during off-peak hours.

Here, the subsidiaries of South Korean chip makers are in a strong position. Samsung SDI, for example, is one of the world’s largest manufacturers of energy storage devices, accounting for about one tenth of the global market, while affiliates SK Hynix account for another 6%.

The market for energy storage systems is growing rapidly as governments revise their emissions targets: research firm Allied Market Research predicts nearly Double in size to over $430 billion by 2030. Unlike electric vehicle batteries, these storage systems face few size and weight constraints, so an increasing number of battery cells are being charged and it is proving to be a profitable business. In April, Samsung SDI reported record first quarter resultswith earnings exceeding $4 billion.

Going all-out for renewables is now a priority for Asian chipmakers as they try to match new capacity with forecasts of booming demand, driven in particular by the recent spectacular rise in artificial intelligence, while also responding to growing pressure to reduce emissions.

The green energy solutions that their subsidiaries can provide offer a rare example of corporate financial interests aligning readily with those of their regulators.

Video: Can hydrogen help the world reach net zero?

https://www.ft.com/content/5880d4aa-a88a-4514-afcd-798e8f29e9ff
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