Every chip we use in phones or AI systems comes with a hidden cost: energy.
This edition of the newsletter provides a straightforward examination of the connection between energy and semiconductors, as well as the industry's potential for sustainability.
How Much Energy Do Chips Use?
Creating a semiconductor chip requires a significant amount of energy. This energy is utilized in various steps, including lithography, etching, and deposition.
These processes occur inside large factories called fabs, which operate 24/7 and require powerful machines that consume massive amounts of electricity.
Some key facts to understand the scale:
By 2030, the European semiconductor industry is expected to consume around 47.4 terawatt-hours (TWh) of electricity annually. That is half the energy used by all European data centers today
Advanced technologies, such as Extreme Ultraviolet (EUV) lithography, use even more energy compared to older methods
AI systems, such as large language models, add to the energy load. In some data centers, AI training can use up to 15% of the total power
In short, making chips is energy-intensive, and as chips become more advanced, their energy requirements will also increase.
This raises important questions about how we can balance innovation with sustainability.
The Bigger Problem: Emissions And Pollution
Energy is not the only concern.
Making chips also releases greenhouse gases (GHGs) that trap heat in the atmosphere and contribute to climate change.
Some of these gases are extremely harmful:
NF₃ (Nitrogen Trifluoride) is 17,000 times more potent than CO₂
CF₄ (Carbon Tetrafluoride) lasts in the atmosphere for thousands of years
Some key points:
Scope 3 emissions (emissions from supply chains and other indirect sources) in chip manufacturing grew seven times from 2015 to 2023
Even though companies buy renewable energy certificates (RECs) to claim they use green energy, this does not always mean absolute emissions are reduced
The chemicals and materials used in chipmaking add to the problem, and finding safer alternatives will take 15 to 20 years
In short, chips are not just energy-hungry, they also emit gases that are much worse than CO₂. This makes it urgent to find better materials, processes, and solutions.
What Is The Semiconductor Industry Doing?
The semiconductor industry recognizes that its energy consumption and emissions are a significant concern. Efforts to reduce its environmental impact have started, but real change will take time.
Companies and researchers are developing new materials, processes, and tools to make chip manufacturing more sustainable.
Action Area | What Is Happening | Challenges |
|---|---|---|
New Processes | Research on safer chemicals and materials (e.g., Green IC program by Imec) | Alternatives could take 15-20 years to develop |
Measuring Emissions | Tools like Imec.netzero help fabs track and reduce emissions | Data gaps and complexity in processes |
Energy Sourcing | Using Renewable Energy Certificates (RECs) and Power Purchase Agreements (PPAs) | RECs don’t always lead to real reductions |
Government Policy | EU policies and Chips Act push for cleaner manufacturing | Balancing growth and sustainability |
Global Cooperation | Ecosystem partnerships for research and standards | Slow progress, complex supply chains |
Governments are also introducing policies to encourage the industry to adopt better practices.
However, challenges such as finding alternatives to harmful chemicals, improving data reporting, and increasing energy efficiency remain.
What Can We Do Next?
Reducing the energy and environmental impact of semiconductors is not just the industry's job. Governments, researchers, companies, and even users all have a role to play.
Here is what different groups can focus on:
Who | What They Can Do |
|---|---|
Chipmakers | Improve energy efficiency, switch to greener chemicals, and share emissions data openly |
Tool And Material Suppliers | Design tools that use less power and support new eco-friendly materials |
Governments | Set clear rules for emission reporting and support green R&D through funding |
Tech Companies | Choose sustainable chip suppliers and reduce overproduction |
Researchers | Develop alternatives to harmful gases and create better tracking tools |
Consumers | Support products made by companies that follow sustainable practices |
The goal is simple: build smarter chips without harming the planet.
With each small step, the semiconductor industry moves closer to a future where performance and sustainability are in harmony.
Takeaway
Silicon chips are everywhere in our world, but making them uses a lot of energy and creates pollution.
But real change takes time.
CONNECT
Whether you are a student with the goal to enter semiconductor industry (or even academia) or a semiconductor professional or someone looking to learn more about the ins and outs of the semiconductor industry, please do reach out to me.
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