Global Warming and the Semiconductor Industry

Record atmospheric greenhouse gas concentrations and the accumulated resulting heat have propelled the planet into unprecedented global temperatures.  

According to the World Meteorological Organization (WMO), the past seven years are on track to be the seven warmest on record and 2022-2026 will likely be warmer than the last five years (2017-2021). 

The report combines input from multiple United Nations agencies, national meteorological and hydrological services, and scientific experts. It highlights the extensive repercussions for current and future generations and the impacts on food security and population displacement, harming crucial ecosystems and undermining progress towards the Sustainable Development Goals. 

Rising temperatures are additionally causing water to evaporate faster, accelerating the water cycle, and increasing the likelihood of extreme weather events and draught across the globe. 

This summer temperatures have been soaring across the northern hemisphere, much of the U.S., Europe, Asia, Northern Africa, and the Middle East have been experiencing record temperatures. The UN secretary general told ministers from 40 countries meeting to discuss the climate crisis on Monday: “Half of humanity is in the danger zone, from floods, droughts, extreme storms, and wildfires. No nation is immune. Yet we continue to feed our fossil fuel addiction.” 

Weather is the leading driver of energy consumption, and many countries are struggling with the increased demand on power consumption.

According to CNN, electricity experts and officials are warning that the United States may not have enough power to meet the demand in the coming months. The article continues to state that many of the nation's grid operators are not taking climate change into account in their planning, even as extreme weather becomes more frequent and more severe. Suggesting that more power outages are on the way, not only this summer but in the coming years as well.

This issue can have a major impact on the U.S. manufacturing industry. Last week, Texas' power grid operator took emergency measures on Wednesday to avoid rolling blackouts as electricity demand soared. Samsung, Toyota Motors, and several other businesses had to scale back production as a heatwave strained the power supplies in the state. 

China has been facing the same challenges, last week due the heatwave officials placed power-rationing in major export and manufacturing provinces of China. Power issues may become a regular event in China adding to the challenges China’s manufacturing industry has been facing since the COVID-19 shutdowns.

Last year China faced the same challenge, which caused countrywide power outages in the second half of the year. The blackouts were blamed on shortages of coal, which China uses to produce about 60% of its electricity, and a surge in power demand. 

Also last year heat waves in Taiwan caused not only power outages and one of its driest years since 1979. This caused operation disruptions at TSMC which produces over 50% global outsourced semiconductor. 

As global demand for semiconductors continues to grow, manufacturers have been investing in building new manufacturing plants and increasing production capacity within the U.S., Europe, India, and other global locations. But chip production has a large carbon footprint, it uses large amount of energy and water, and it adversely impacts the environment, causing groundwater and air pollution.

With global warming become a climate crisis, causing power, water, and other resource shortages it is becoming increasingly important for the industry to look into its sustainability practices. 

In the past several years, sustainability has also become a key priority for the semiconductor industry as its importance has increased for consumers, investors, and governments. 

Many manufactures have begun setting goals to reduce their resource usage and have created ambitious targets for reducing their emissions, but many have been lagging behind. 

As governmental standards are increasing, businesses are being pushed to scrutinize their carbon footprint and emissions along their entire supply chain. 

Achieving emission reductions will require collaboration with your suppliers and visibility into their environmental practices down to the sub-tier level. It is essential for businesses to integrate their entire supply chain into their sustainability efforts by evaluating their suppliers and business partnerships, their environmental practices and carbon emissions.