Climate Change and Water Stress in the Semiconductor Supply Chain

Semiconductors are as critical to global economic infrastructure as oil once was. They are the foundation of countless devices, from smartphones to cars to advanced medical equipment. However, the semiconductor industry faces a daunting challenge: the increasing threat of climate change and water scarcity. As highlighted in the article by the World Economic Forum, these environmental issues have significant implications for the semiconductor supply chain, an issue that warrants urgent attention and innovative solutions.

The Rising Tide of Climate Change

Climate change is no longer a distant threat; its effects are palpable and accelerating. Extreme weather events—storms, floods, and heatwaves—are becoming more frequent and severe. These events can disrupt semiconductor manufacturing facilities, which are often situated in climate-vulnerable regions. For instance, Taiwan, a leading semiconductor producer, faces the dual threat of typhoons and droughts. Such climate extremes can halt production, cause supply shortages, and escalate costs, reverberating through the global tech industry.

Water: The Lifeblood of Semiconductor Manufacturing

Semiconductor production is an extremely water-intensive process. Semiconductor fabrication sites require water to cool systems and generate electricity. Beyond keeping the lights on, manufacturing a single wafer can require thousands of gallons of ultra-pure water to rinse residue from silicon chips during the fabrication process. Ultra-pure water is completely removed of all impurities that can damage chips. Producing 1,000 gallons of ultrapure water takes roughly 1,400 to 1,600 gallons of municipal water.

Beyond the volume of water needed to produce semiconductors, 40% of global facilities will be in watersheds projected to experience high or extremely high water stress between 2030 and 2040. This could be another potential challenge for semiconductor production beyond the current disruptions.

This dependency creates a critical vulnerability as global water stress intensifies. Regions that are already struggling with water scarcity may be unable to sustain the growing demands of semiconductor facilities. As water becomes scarcer and its distribution more erratic due to climate change, the semiconductor industry must rethink its water usage strategies.

Innovative Solutions and Collaborative Efforts

To safeguard the semiconductor supply chain, the industry must innovate and collaborate. Several strategies can help mitigate the risks posed by climate change and water stress:

1. Water Recycling and Efficiency Improvements: Investing in advanced water recycling technologies is paramount. By reusing water within manufacturing processes, companies can significantly reduce their freshwater consumption. Techniques such as closed-loop systems can ensure that water is purified and recirculated, minimizing waste and alleviating local water stress. New chip facilities being built as a result of the Chip Act, are already committing to reclaim up to 65% of the water used.
2. Diversifying Geographical Footprints: Reducing the concentration of semiconductor manufacturing in water-stressed regions can help. By establishing facilities in areas with more stable water supplies or diversifying to multiple locations, the industry can spread its risk. This geographical diversification can enhance resilience against regional climate events.
3. Sustainable Resource Management: Collaboration with local governments and communities to manage water resources sustainably is essential. By engaging in proactive water stewardship, semiconductor companies can help ensure long-term water availability. This includes participating in watershed management, supporting conservation initiatives, and investing in community water infrastructure.
4. Adoption of Green Technologies: Transitioning to less water-intensive production methods and adopting green technologies can make semiconductor manufacturing more sustainable. Research into alternative materials and processes that require less water and are more environmentally friendly could yield significant long-term benefits.
5. Policy Advocacy and Industry Standards: The semiconductor industry must advocate for policies that address climate change and water management. Supporting regulations that promote sustainable practices and investing in industry-wide standards for water and energy efficiency can drive systemic change.

A Call to Action

The intersection of climate change and water stress represents a formidable challenge for the semiconductor industry. However, it is also an opportunity to innovate and lead by example. By embracing sustainable practices, investing in innovative technologies, and fostering collaborative efforts, the semiconductor sector can build a more resilient and sustainable future. The stakes are high, but with concerted action, the industry can safeguard its supply chain while contributing to the broader fight against climate change and water scarcity.

Sources:
https://www.weforum.org/stories/2024/07/the-water-challenge-for-semiconductor-manufacturing-and-big-tech-what-needs-to-be-done/
https://www.weforum.org/stories/2024/12/how-climate-change-and-water-stress-is-risking-the-semiconductor-supply-chain/

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