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Asia's chip makers powered by coal and gas imperil climate goals

None of the 13 semiconductor, display and final assembly companies have climate commitments in line with the Intergovernmental Panel on Climate Change recommendations

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Photo: Bloomberg

Bloomberg

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By Betty Hou and Aaron Clark
 
The energy required to make chips that underpin everything from electric cars to ballistic missiles is poised to skyrocket this decade. Without a more ambitious pivot to clean power, those operations threaten the climate, according to Greenpeace. 
 
None of the 13 semiconductor, display and final assembly companies have climate commitments in line with the Intergovernmental Panel on Climate Change recommendations to limit global warming to 1.5C, the non-profit said in a report released Thursday. The analysis included emissions forecasts for Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and SK Hynix Inc.

The report focused on companies with operations in East Asia — which is home to more than a third of the semiconductor manufacturing industry’s market share — and highlights the climate impact of companies in the global technology supply chain that often receive less attention than brands like Apple Inc., Microsoft Corp. or Amazon. Inc. Consumer-facing brands often outsource the manufacturing of components for hit products. 

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“Most electronics industry suppliers studied have set long-term targets for carbon reduction, but their timelines do not reflect the level of ambition that is necessary in the face of catastrophic climate change,” Greenpeace said in the report. “To achieve neutral emissions will require adopting 100% renewable energy by 2030.”

In East Asia, grids remain highly dependent on natural gas and coal-fired power generation, Greenpeace said. If governments or companies are aiming to neutralize their carbon footprint they must cut their emissions by half by 2030, according to the report. 

TSMC's electricity consumption is on track to grow the most among all the semiconductor manufacturers studied in East Asia, at 267% by 2030, according to Greenpeace's calculation, when it will consume as much power as roughly a fourth of Taiwan's population. By 2030, over 80% of electricity consumption by Taiwanese chip manufacturers will come from TSMC alone, Greenpeace said.

In South Korea, Samsung's electricity consumption from making chips is projected to reach 55 terawatt hours by 2030, higher than Singapore’s entire annual electricity consumption three years ago, according to Greenpeace

Samsung last year said it was committed to achieving net zero emissions by midcentury and a company spokesperson said in an email it “will continue to share our progress with various stakeholders and listen to their feedback.” SK Hynix said it will continue its efforts to achieve RE100 goal by 2050. TSMC has also pledged to use 100% renewable energy by 2050. 

The semiconductor manufacturing industry is on track to consume 286 terawatt hours of electricity globally by 2030 under a “business as usual scenario,” which would exceed Australia’s power consumption in 2021, Greenpeace said in its analysis. Over the same timeframe it’s projected to emit 86 million metric tons of carbon dioxide, which is roughly equivalent to Portugal’s total emissions in 2021.

“East Asia is particularly vulnerable to the impacts of climate change,” Xueying Wu, the East Asia Global Tech Project Lead for Greenpeace said in a text message, adding that catastrophic flooding, heat waves and droughts in the region have caused “devastating” impact.

 “Electronics manufacturers, especially chipmakers, have been affected by the severe climate events in recent years and must on some level be aware. But they have been too slow to embrace renewable energy and instead continue to contribute to the crisis. “  she said. 

Greenpeace said in its report that the most effective way for companies to decarbonize their operations are to purchase renewable energy with additionality through power purchase agreements and onsite generation and investment. 

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First Published: Apr 20 2023 | 5:14 PM IST

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