Schneider Electric | The semiconductor industry's challenge of decarbonizing and meeting chip demand

The semiconductor industry is an important part of our increasingly digital environment. Its technologies include the phones and computers we use to communicate, the vehicles and planes that enable us to transport, the medical devices that help diagnose and treat disease, and the electrical grid systems that power our cities - all essential to our daily lives. There is no future without semiconductors, but the widespread use of semiconductors also brings growing environmental challenges.

1，The environmental cost of semiconductors

To meet demand, semiconductor companies are building new manufacturing plants (FABS) that can consume up to 100 megawatt-hours of electricity per hour, more than many car plants or oil refineries. Such a large consumption of electricity will produce a lot of waste, greenhouse gas emissions and a large carbon footprint.

In 2020, the semiconductor industry's CO2 emissions reached a staggering 41 million tons, equivalent to the annual emissions of 5 million houses. Global semiconductor manufacturing is expected to consume 237 terawatt hours (TWh) of electricity by 2030, which is roughly equal to Australia's total electricity consumption in 2021.

With the growing importance of electronics, manufacturers must address issues around energy consumption and sustainability. Recent research by McKinsey found that the latest commitments by major semiconductor companies still fall short of the requirements of the 2016 Paris Agreement.

Therefore, companies that fail to operate more environmentally may face tougher restrictions and sanctions from the government in the future, as well as fewer orders from customers as they become more environmentally conscious. In contrast, those companies that optimize energy efficiency early on will save significant resources and open themselves up to huge growth opportunities. In order to protect the future of the business, manufacturers must establish a sustainable development strategy now.

2，To maintain the sustainability of development with shock resistance

In addition to environmental concerns, many manufacturers are still dealing with the shock and fallout from the global semiconductor crisis. Throughout the pandemic, a "perfect storm" of global events has all but brought production to a standstill: the COVID-19 lockdown has both accelerated demand for consumer electronics and shut down factories that produce the components needed.

At the same time, the US-China trade war, the Russia-Ukraine war, severe weather events, fires in production facilities, and a general reliance on semiconductor imports rather than domestic manufacturing have also contributed to the continued lack of semiconductor supply.

Research shows that at the peak of the chip shortage, as many as 169 companies around the world were affected. The consumer electronics and automotive industries are bearing the brunt. The PlayStation 5 is hard to come by, Apple has cut production targets for iphones, Toyota has cut vehicle production by 40% and General Motors has suspended vehicle production at its North American plants.

Overall, semiconductor shortages cost the automotive industry up to $210 billion in lost revenue in 2021. While manufacturers have now adapted to the tight supply of semiconductors, increasingly complex products, such as electric vehicles with advanced safety and autonomous driving systems, will continue to accelerate semiconductor demand and trigger major changes in the manufacturing landscape. Semiconductor production has been concentrated in Asia for the past decade, so companies and countries are now looking to build more diverse and impact-resilient supply chains.

In October 2022, the U.S. government imposed export control rules to limit China's production of the world's most advanced chips. At the same time, the EU intends to become an important player through the European Chips Act. As investment shifts from Asia Pacific to North America and Europe, manufacturers must be prepared to offer low-carbon services to stand out from the competition.

3，A three-step plan to achieve resilience and sustainability

Determining the environmental baseline is a "required course" for the chip industry to achieve decarbonization.

At Schneider Electric, we have identified three key steps to help semiconductor companies of all types and sizes translate sustainable, net-zero emissions goals into action.

The first step, called "strategizing," involves measuring the manufacturer's current energy performance and carbon footprint, and then developing a net-zero plan that will produce tangible results. In reality, this includes establishing a baseline for carbon emissions, examining digital technologies to identify gaps and inform future roadmaps, assessing technical and economic feasibility to prioritize action, and simulating building renovation scenarios to develop roadmaps and timelines. In particular, the use of electric digital twin technology in the design and simulation of the new FABS power system will improve its design and optimize the network to meet local requirements and standards.

The second step is to go digital. This means creating a digital hub that monitors and visualizes the energy and resource usage of semiconductor businesses, enabling leaders to make data-based sustainability decisions and report on progress toward established goals. This single source of truth helps track carbon implantation (including building information modeling), as well as energy and carbon measurements (including centralized energy supply and utility data), and implement cloud-based AI analytics.

The third step is "decarbonisation". In this step, the real action will be put into action and semiconductor manufacturers must use the insights gained from the "strategizing" and "decarbonizing" steps to achieve real sustainability improvements.

Specific upgrades will depend on their findings, but examples include electrifying fleet vehicles, installing renewable energy generators, purchasing low - or no-carbon products, and using artificial intelligence to optimize on-site energy consumption in real time.

4，Work with reliable consultants and professional partners

In addition to the three-step process of "strategizing," "digitization," and "decarbonization," collaboration and partnerships are also key to the semiconductor industry's success in sustainability. Long-term sustainability requires different areas of expertise and support, so manufacturers must recognize that no one company can achieve this on its own. Instead, semiconductor producers and suppliers must work together to take advantage of external expertise and technology.

Schneider Electric has long played an important role in helping semiconductor companies meet sustainability and decarbonization challenges. For example, the company recently partnered with Intel, one of the world's leading semiconductor design and manufacturing companies, and Applied Materials, the world's largest semiconductor and display equipment company, to launch the "Catalyze" initiative: a new collaborative initiative to accelerate the use of renewable energy across the global semiconductor value chain. With the help of the Catalyze program, semiconductor industry leaders will be able to achieve a range of sustainability and impact resilience goals, including:

◎ Integrate energy purchasing power across the semiconductor value chain to accelerate the deployment of renewable energy projects

◎ Participate in the utility-scale power purchase agreement market

◎ Develop operational models for supply chain planning to close the net zero energy target gap

◎ in specific regions of the world where the semiconductor value chain is operating, Raising awareness of renewable energy availability

◎ Leading the semiconductor industry to drive clear next steps

5，Sustainable power in semiconductor manufacturing

Ultimately, proactive sustainability measures are not only consistent with global environmental goals, but also make sense for semiconductor manufacturing plants' bottom line.

Studies have shown that implementing sustainability strategies can reduce costs and have a positive impact on operating profits of up to 60%. In addition, adopting sustainable practices reduces long-term risks and opens up opportunities in new markets.

Now that we seem to have emerged from the semiconductor crisis, manufacturers have the potential to achieve tremendous growth through long-term improvements. Not only do they save a lot of money, but they also open up huge possibilities for energy efficiency. And the best part? The tools to do this are right in front of us. With the help of a network of knowledgeable partners, semiconductor companies must now learn to decarbonize, digitalize, and strategize.

FOUNTYL TECHNOLOGIES PTE. LTD. was located in Singapore, we are focusing on the research and development, manufacturing and technical services of precision ceramic parts in the semiconductor field for more than 10 years. our main product are ceramic vacuum chuck(pin chuck, groove chuck,porous chuck and electrostatic chuck), ceramic end effector, ceramic plunger and ceramic beam & guide and produces various of ceramic (porous ceramics, alumina, zirconia, silicon nitride, silicon carbide, aluminum nitride and microwave dielectric ceramics and other advanced ceramic) parts.