Sustainability and the Semiconductor Industry

This month SEMI, and the Semiconductor Climate Consortium (SCC), announced more than 60 founding members of the first global collaborative of the semiconductor ecosystem companies. 

The mission of the SCC is to reduce greenhouse gas emissions across the industry value chain. With global warming causing water, and other resource shortages it is becoming increasingly important for the industry to look into its sustainability practices not only for its own survival but also for the health of the world. 

Many manufacturers have set goals to reduce their greenhouse gas emissions, but the chip shortages of the past couple of years shifted the industry focus and resources to building and expanding domestic semiconductor manufacturing capacity and securing supply chains.

However, drought and extreme weather are shifting the industry focus back to the health of the planet and the need for greater sustainability. 

The SCC’s vision and objectives include:

• Collaboration: Align on common approaches, technology innovations, and communications channels to continuously reduce greenhouse gas emissions.
• Transparency: Publicly report progress and Scope 1, 2, and 3 emissions annually.
• Ambition: Set near and long-term decarbonization targets to reach net zero emissions by 2050.
  

The Complexity of the Emission Problem

The GHG Protocol Corporate Standard categorizes greenhouse gas emissions associated with a company’s Corporate Carbon Footprint (CCF) as Scope 1, scope 2, and scope 3 emissions. However, this categorization does not include the Product Carbon footprint (PCF), which is the total amount of greenhouse gas emissions generated by a product or a service over the different stages of its life cycle.

1. Scope 1 emission includes direct emissions from the company’s owned or controlled sources. It encompasses all energy uses as well as process emissions that are released from burning PFCs, chemicals and other gases during the manufacturing process. 

2. Scope 2 emissions include indirect emissions from purchased energy such as electricity used by the company. According to GHG accounts for at least a third of global greenhouse gas emissions. 

3. Scope 3 emissions include indirect value chain emissions which include the upstream and downstream emissions. Upstream emissions encompass the indirect greenhouse gas emissions within a company’s value chain related to purchased or acquired goods and raw materials while downstream emissions include the indirect greenhouse emissions within a company’s value chain related to sold goods and services. 

A recently published McKinsey research revealed that a typical semiconductor fab emissions breakdown is as follows: 35% Scope 1 emissions, 45% Scope 2 emissions, and 20% Scope 3 upstream emissions. (Downstream emissions were omitted) 

The report further states that the current steps that semiconductor companies are taking to reduce their greenhouse gas emissions are not enough to get the industry to targeted emission goals. 

Some of the initiatives currently being taken by major players in the industry include adopting alternative fuel and renewable energy resources as well as reducing their energy usage intensity. 

But to achieve the 2050 net-zero goal, every semiconductor company and its value chain would need to participate in these efforts. 

Businesses need to integrate their entire supply chain into their sustainability efforts and not only invest in their own decarbonization efforts, but also collaborate with their suppliers and partners.

Having visibility into the environmental practices and carbon emissions of suppliers and partners down to the sub-tier level is an essential element in achieving your business emission reduction goals. 

As the industry continues to grow corporate environmental responsibility is imperative. The formation of SCC is a step in achieving the urgent need for the industry to increase its sustainability efforts, but more companies need to join this effort to make it a successful endeavor.