Collaborating To Decarbonize The Semiconductor Manufacturing Value Chain

By Mousumi Bhat and Peter Spiller

SEMICON West 2022 Hybrid gathered experts from across the semiconductor industry for the debut Sustainability Summit to talk about the sustainability of the industry’s growth. Semiconductor chips have become ubiquitous in recent years. All aspects of society have become extremely dependent on semiconductors. The post-pandemic revenue growth of semiconductors has been unprecedented (20+% growth) but has also been severely challenged by multiple disruptive factors. The question on everyone’s mind is, “How sustainable is industry growth and how sustainable is our business?”

As we adjust to the new normal, two things stand out:

1. The power of existential threats to impact our daily lives
2. The strength of collaboration when organizations around the world mobilize to solve complex problems

If the past is any reflection of the future, we can expect a significant increase in the impending impact of climate change about to descend upon the semiconductor industry. It also highlights the elevated intensity of innovation and collaboration it will take for us to mend the climate crisis.

A panel of industry experts, executives, and researchers at the Sustainability Summit discussed how the semiconductor industry needs to fundamentally change to meet the higher goal of attending to the planet as a cohesive and collaborative sector. Panelists represented the whole value chain: EMD Electronics, Edwards Vacuum, Lam Research, Micron Technology, imec, and Microsoft.

One theme kept resonating throughout the session. This was collaboration. For an industry that prides itself at guarding its intellectual property, it was a refreshing change towards a focus on the bigger challenge of climate crisis where the spirit of collaboration was one of not ‘if’ but ‘how soon.’

The following areas of collaboration emerged as the top five from the summit.

1. Gas abatement acceleration – Bring together gas producers, equipment players, and chip manufacturers to innovate gas chemistry for lower Global Warming Potential (GWP) process gases innovation. Reduce qualification time and efforts through collective action such as sharing of qualification insights across fabs, equipment manufacturers, and gas producers. Parallelizing qualifications at different original equipment manufacturers (OEMs) for different new gases using results to leverage and accelerate qualification at others.
2. Renewable energy push – The semiconductor industry needs to initiate collective demand signaling for renewable energy to governments and developers, especially on islands such as Singapore and Taiwan.  Other initiatives should include joint development of local energy alternatives, e.g., by organizing access to green electricity together, funding innovation around new energy sources, as well as contemplating joint lobbying of governments to green the grid.
3. Value chain emissions transparency – There was a callout to advance semiconductor-specific standards for measurement and communication of verified and primary emissions along value chain steps. This callout aligns well with the existing Greenhouse Gas (GHG) Protocol and World Business Council for Sustainable Development (WBCSD) Partnership for Carbon Transparency (PACT) efforts. The panel emphasized the criticality of availability of clean, unambiguous, and honest data so we as an industry can inform ourselves on our carbon footprint at all times.
4. Bold and visible commitments – There needs to be aligned Science Based Targets (SBT) commitment from the industry, but also more visible campaigns. As an environmentally responsible industry, we need to be thinking about how have we used our innovation to not only contain and mitigate our footprint but how have we created a handprint.
5. Low-energy compute – Build an end-to-end system perspective to define an effective, low-energy compute roadmap towards lower total power consumption. The roadmap should include cooling, compute architecture, algorithms, and technology choices.

Some noteworthy specific callouts include the following:

Measurement and reporting of GHG emissions – Standards development is at an early stage. The consortia should help to unravel the disparate templates and enable transparency among those not reporting. It is important to report the absolute emissions and a useful intensity metric. More education and change management are needed to get GHG and decarbonization thinking embedded within our daily business. As an industry we need to migrate to becoming comfortable with reporting Scope 1, 2, and 3 so we can help the overall journey.

Confusing definitions – It is Important to remember the goal: 1.5°. The science-based target initiative (SBTi) is the most complete target setting scheme available now. Beyond the target, it’s critical to execute on the plan and check regularly on impact.

Carbon offsets – It’s something to look at but it cannot become a cover for lack of actual decarbonization. This is greenwashing. We will need to start looking specifically at the accounting for offsetting non-CO₂ GHG emissions, which have significantly higher GWP and live in our atmosphere much longer than CO₂.

Industry collaboration

The same way that everyone in the industry does their part to keep Moore’s law valid, industry players should also contribute their part to get the industry to net zero. The biggest issue is to decarbonize the grid, considering the massive electricity use and associated Scope 2 emissions today. Joint lobbying for decarbonization of the grid will be one of the most impactful measures that can happen.

• Industry players should commit to SBTs. They should also collaborate to lobby governments for R&D investments, e.g., in the gases space, as part of the CHIPS Act.
• They should collectively influence regulations and be part of the process versus a passive recipient.
• The industry needs to align on how to measure and pass-on measurement in a verified, standardized way along the value chain. SEMI should orchestrate semiconductor-specific standard setting for GHG accounting inclusive of deciphering Scope 3 reporting.
• The industry needs to figure out how to reduce the cycle time involved in the overall process of discovery, development, prototyping, qualification, and deployment new process gases through collaboration across the value chain.

Innovations – We do not have 15 years to qualify new green materials and gases. Together we need to innovate fast and deploy smart.

• Driving efficiencies in some of most emissive processes (PVD, Etch, Lithography) helps to reduce emissions. Equipment buying should not only be based on total cost of ownership (TCO) but based on equipment carbon footprints. Changing gases and chemistry is tough and requires changes in what has been optimized for 20 years.
• Faster adoption of new gases by customers is critical – we need a collective push on this to meet the 50% reduction of our carbon footprint by 2030. Qualification times for such innovations in the past has been 10-15 years. We need to bring this down to less than five years in order to make the aggressive goals for reduction or emissions by 2030.
• Efforts need to move beyond equipment improvement to total fab optimization. Hence the call for collaboration.

Conclusion

Beyond the many insights and positive steps toward industry collaboration at the Sustainability Summit, SEMI supports the sustainability interests of member companies through collaboration, education, workshops, partnerships, and other value-added services as part of the SEMI Sustainability Initiative. Learn more about the initiative and connect with SEMI to find out how your company can get involved in this crucial industry effort.

Peter Spiller is a partner at McKinsey & Company.