The Chips and Science Act, which US President Joe Biden was yesterday to sign into law, was pitched as a once in a lifetime chance to revitalize the US semiconductor industry and counter Asia’s manufacturing power.
What went less discussed was the legislation’s environmental impact. The bill is poised to pump US$52 billion into an industry that devours energy and produces toxic waste — at a time when a global surge in chip demand is already turning companies into bigger polluters.
With the US and Europe racing to rebuild their chipmaking infrastructure, environmental concerns are taking a back seat, said Pauline Weil, a researcher at Brussels-based economic think tank Bruegel.
Illustration: Mountain People
“Countries are really not thinking about this,” she said. “It’s offering on a plate billions of subsidies with very little strings attached, and the strings are not attached to the environment.”
The EU is proposing about US$43 billion for its own chips legislation, subsidizing a building boom by the world’s largest chipmakers. New projects from Intel Corp, Samsung Electronics Co and Taiwan Semiconductor Manufacturing Co (TSMC) are poised to sprout up in Germany, Ohio and Arizona.
An examination of the companies’ corporate responsibility reports shows that their power and water use is already on the rise. That is not surprising in a growing industry, but chipmakers like Intel have vowed to slash their emissions and water consumption. Keeping hazardous waste out of landfills is another challenge. The rush to add new manufacturing will only make that harder.
Some projections indicate the industry could double in size over the next decade, meaning efforts to mitigate that footprint need to accelerate. With absent pressure from governments, it will largely depend on the chipmakers themselves how much of that expansion translates into environmental damage.
Making semiconductors is a messy, expensive business that is getting more difficult as it butts up against the laws of physics.Chipmakers run giant factories that operate 24 hours a day, seven days a week, trying to carve out a return on the billions of dollars required to equip them before they become obsolete. The machinery typically has a useful life of less than a decade.
The process requires a lot of energy, water and toxic chemicals. Although the largest chipmakers have made environmental progress — their use of renewable energy in the US is one highlight — the companies concede that they have work to do.
Take Samsung, the world’s largest chipmaker by revenue. The South Korean company’s overseas semiconductor sites — in the US, Europe and China — already operate wholly on renewable energy.
However, it is still working on developing sustainable energy sources in other parts of the world, including in South Korea, where its biggest factories are located. All told, only about 16 percent of its energy use was from renewable sources last year, up from 13 percent in 2020.
TSMC similarly powers its overseas operations using clean electricity; but at home in Taiwan, where the majority of its plants are, the total is less than 10 percent.
“We know it is very important to drive renewable energy in Taiwan,” said TSMC spokesperson Nina Kao (高孟華), adding that “Taiwan is a really small island with limited resources.”
Intel is doing better, partially because it has access to greener energy near its sites in Oregon, Arizona and New Mexico. The company got 80 percent of its electricity from renewable sources last year, up from 71 percent in 2020.
Still, its total energy use — partially due to the additional complexity of new manufacturing technology — went up 9.4 percent in the period to 11.61 billion kilowatt-hours (kWh). That is about twice what the US city of San Francisco uses in a year.
Intel can point to progress over the longer term. Its emission of two categories of greenhouse gases is down 19 percent from where it was in 2000, according to its most recent corporate responsibility report, when the output totaled more than 4 million metric tonnes of carbon dioxide.
However, since dropping to less than 2 million tonnes around 2010, the emissions are on the rise again and ended last year at 3.37 million tonnes. Again, the growing complexity of making chips has forced the amount back up, Intel said.
The company’s goal is now to reduce emissions to “net zero” by 2040. According to Intel chief sustainability officer Todd Brady, the industry deserves credit for pursuing a science-based approach to solving problems such as emissions and waste — rather than simply using cash to buy offsetting credits.
However, in some areas, the easy work has been done. The struggle now is to reduce that impact to nothing.
“You shouldn’t let us off the hook,” Brady said.
Intel aims to be “net positive” in water use by 2030, meaning it will use less than it produces. TSMC has pledged to be net zero emissions by 2050, and Samsung is pushing a new set of standards and guidelines that it says more accurately reflect the impact of the chip industry.
Then there is the issue of waste. Chipmakers say they have made significant progress on keeping potentially dangerous materials out of landfills. In some cases, they have figured out ways to reuse or recycle substances such as sulfuric acid and metals that are key to the chip production process.
However, more production means there will be more waste to process, and that could strain recycling systems.
For now, the trends are heading in the right direction. Intel generated 344 tonnes of waste last year, down from 414 the prior year, and only sent 5 percent of that to landfills. TSMC, meanwhile, has dumped less than 1 percent of its waste for 12 consecutive years. Samsung reported a 96 percent waste-recycling level, with its chip division sending zero to landfills last year — a first.
The industry also argues that chips themselves have made the world a greener place. A chip-heavy Nest thermostat, for instance, can keep consumers from wasting electricity.
However, that argument is a double-edged sword, said Christopher Knittel, a professor of applied economics at the Massachusetts Institute of Technology.
“If you’re going to take credit for the Nest thermostat, how much blame should you take for the 12-miles-per-gallon muscle car your part was in?” he said.
The chip industry emits roughly 100 million tonnes of carbon dioxide per year — a level equivalent to the country of Belgium — and it is going to be hard to bring that down, said Peter Spiller, a partner at McKinsey & Co focused on sustainability.
“But at least players have recognized this,” he said, adding that “they’ve set very ambitious targets for themselves.”
China has quietly unloaded 10 percent, or US$100 billion, of its US Treasury holdings in the first half of the year. During the past 40 years of rapid economic growth after recovering from a quasi-ruined state that officially ended in 1976, China has amassed a huge pile of foreign reserves partially through its trade surplus. The US Treasuries have always been the prime choice for China to park its foreign reserves. What made it run away from the traditional safe haven for its hard-earned foreign reserves? One explanation is that Beijing is leveraging its financial power as the second-largest US Treasury
Sometimes When there is a choice to be made, none of the options are good. The choice between hooking up with communism — in its Chinese iteration, the one that bugs Taiwan the most — and neofascism, of the back-to-the-roots Italian variety or any other kind, is such a choice. The good news is that Taiwan does not have to choose. It neither needs to cozy up to China — the successes of President Tsai Ing-wen’s (蔡英文) administration, despite its shortcomings, are evidence of that — nor does it need to embrace Italy under its likely new leader, Italian lawmaker Giorgia
For many years, the military’s defense of the Taiwan Strait has been centered around the doctrine of establishing “air and maritime supremacy and repulsing landing forces.” However, after the legislature passed the Sea-Air Combat Power Improvement Plan Purchase Special Regulation (海空戰力提升計畫採購特別條例) last year, the doctrine was altered to “air defense, counterattack, and establish air and maritime supremacy,” with repelling landing forces removed from the equation. Despite the changes to the defense doctrine, landing operations and anti-landing operations still feature at the core of the military’s plans for the defense of the nation. The primary reason that peace in the Taiwan Strait has prevailed
In a China-US war over Taiwan, paradoxically the greatest loss of life could be inflicted on the Muslim Uighurs. Uighurs constitute 45 percent of the Xinjiang population of 25 million people, with over 1 million incarcerated in internment camps in accordance with a policy initiated under Chinese President Xi Jinping (習近平). Another half-million children have been placed in state-run boarding schools. Forced sterilization has led to a 24 to 60 percent drop in the birthrate, leading officials from many countries to describe the mass detention as genocide. Estimated annual death rates in the camps of between 5 and 10 percent could