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.”
As China’s economy was meant to drive global economic growth this year, its dramatic slowdown is sounding alarm bells across the world, with economists and experts criticizing Chinese President Xi Jinping (習近平) for his unwillingness or inability to respond to the nation’s myriad mounting crises. The Wall Street Journal reported that investors have been calling on Beijing to take bolder steps to boost output — especially by promoting consumer spending — but Xi has deep-rooted philosophical objections to Western-style consumption-driven growth, seeing it as wasteful and at odds with his goal of making China a world-leading industrial and technological powerhouse, and
For Xi Jinping (習近平) and the Chinese Communist Party (CCP), the military conquest of Taiwan is an absolute requirement for the CCP’s much more fantastic ambition: control over our solar system. Controlling Taiwan will allow the CCP to dominate the First Island Chain and to better neutralize the Philippines, decreasing the threat to the most important People’s Liberation Army (PLA) Strategic Support Force (SSF) space base, the Wenchang Satellite Launch Center on Hainan Island. Satellite and manned space launches from the Jiuquan and Xichang Satellite Launch Centers regularly pass close to Taiwan, which is also a very serious threat to the PLA,
During a news conference in Vietnam on Sept. 10, a reporter asked US President Joe Biden about the possibility of China invading Taiwan. Biden replied that Chinese President Xi Jinping (習近平) is too busy handling major domestic economic problems to launch an invasion of Taiwan. On Wednesday last week, China’s Taiwan Affairs Office published a document outlining 21 measures to make the Chinese-controlled Fujian Province into a demonstration zone for relations with Taiwan. The planned measures would expand favorable treatment for Taiwanese people and companies, and seek to attract people from Taiwan to buy property and seek employment in Fujian.
More than 100 Chinese People’s Liberation Army (PLA) vessels and aircraft were detected making incursions into Taiwan’s air defense identification zone (ADIZ) on Sunday and Monday, the Ministry of National Defense reported on Monday. The ministry responded to the incursions by calling on China to “immediately stop such destructive unilateral actions,” saying that Beijing’s actions could “easily lead to a sharp escalation in tensions and worsen regional security.” Su Tzu-yun (蘇紫雲), a research fellow at the Institute for National Defense and Security Research, said that the unusually high number of incursions over such a short time was likely Beijing’s response to efforts