Ambitious climate targets and the role of the semiconductor industry
The semiconductor industry is facing an enormous challenge: Semiconductors are the basis for most of our everyday electronic devices and demand is increasing worldwide. Manufacturing is very energy and resource intensive and practically calls for sustainable innovations. Many companies in the industry have set ambitious targets for massively reducing greenhouse gas emissions in production so as to support the fight against climate change.
This creates a paradox for the industry. On the one hand, semiconductors are becoming increasingly important for achieving ambitious climate protection targets. Yet on the other hand, growing demand for these technologies means that more and more chips are required, the production of which emits greenhouse gases. At Merck, we want to contribute to making the semiconductor industry more sustainable and have launched manifold initiatives and collaborations to this end.
Semiconductors are indispensable, but productions comes with an environmental footprint
Semiconductors play a crucial role in electric vehicles, wind turbines and smart buildings. They ensure that these are controlled more efficiently, enabling them to save more energy and be more environmentally sound as a result. Semiconductors form the basis for transforming car-based transport into integrated mobility solutions by supporting interconnectivity, automation and electrification. They are indispensable in smart power networks, or smart grids. They make it possible to connect electronic devices, buildings and smart communication devices within the Internet of Things, enabling substantial CO2 reduction.
At the same time, the semiconductor industry has a significant carbon footprint. Considerable quantities of electricity and water are required for production. A study by Harvard University determined that manufacturing accounts for almost 75% of the total CO2 emissions in connection with electronic communication devices; that is significantly more than the emissions from the power consumption of the devices during their lifespans. In turn, the majority of the emissions from the manufacture of these devices comes from the production of the semiconductors used. The more powerful the chips, the greater the environmental footprint.
Ambitious climate protection targets and the use of efficient technologies in transport, buildings and industry are also a reason why demand for electronic components is still on the rise. At the same time, the environmental footprint in production is growing. Many chip manufacturers and companies along the entire value chain are rising to the challenge of significantly and quickly reducing emissions and resource consumption. After all, the clock is ticking: More and more countries are setting themselves the goal of achieving carbon neutrality by mid-century.
Manufacturers have recognized the challenges
The manufacturers and their suppliers are helping to achieve these goals with ambitious environmental strategies. For its new production facility in Europe, Intel has committed to using 100% renewable energies, achieving positive net water use and not landfilling any waste. TSMC, one of the world’s largest semiconductor producers, intends to reduce its emissions to net zero by 2050.
Merck has also set itself the target of contributing to the quality of life and health of humankind through sustainable technologies and innovations for ecological progress. In 2030, we will achieve human progress for more than one billion people. In addition, we intend to be climate neutral by 2040. On the path towards achieving this goal, we have set ourselves the following interim targets: By 2030, we intend to lower our direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions by 50% compared with 2020. Moreover, we aim to procure 80% of our purchased electricity from renewable sources and reduce our indirect emissions along the entire value chain (Scope 3) by 52% per euro of value added compared with 2020.
Green power
The purchase of “green” electricity is an important element when it comes to implementing this. That is why companies are entering into long-term purchase agreements with suppliers producing electricity from renewable energies or are investing directly in large wind turbines or solar panels.
At Merck, we signed a 12-year virtual power purchase agreement (VPPA) with Enel Green Power for the “Azure Sky” wind and storage project in the United States in order to bring more renewable energy to the grid. In 2022, we sourced already 47% of our purchased electricity from renewable energies (compared to 30% in 2021). We will add more power purchase agreements for wind and solar energy to achieve our goal, which is to cover 80% of our global electricity requirements in this way by 2030.
Innovative manufacturing and use of gases with lower greenhouse gas emissions
However, not only electricity plays a role in greenhouse gas emissions in semiconductor production. The gases used in the production process, for example in the dry etching and chamber cleaning processes, also contribute significantly. These gases are needed to etch structures onto the wafers from which the chips are diced and to clean the surfaces – processes that require enormous precision.
Manufacturers are trying to counteract the release of gases that harm the climate through innovative manufacturing processes and gas scrubbers. As a result, the European semiconductor industry reduced its fluorinated greenhouse gas emissions by 42% between 2010 and 2020, according to information from the European Semiconductor Industry Association.
One essential lever is the use of gases with a lower global warming potential. For this reason, we at Merck are collaborating closely with customers such as Micron, a leading provider of innovative memory and storage solutions, and testing an alternative etching gas with a lower global warming potential. Through our innovation partnership with Micron, we are helping our customers achieve their sustainability goals.
In addition, we joined the Science Based Targets initiative (SBTi) to have our ambitious goals scrutinized. The SBTi has confirmed that our climate protection targets for 2030 correspond to the current status of climate science. We are helping to limit global warming to 1.5 °C and fulfilling the requirements of the Paris Agreement as a result.
The reduction of indirect emissions along the entire value chain (Scope 3 emissions) must also make an essential contribution.
To reduce greenhouse gas emissions generated as a result of our business activities (so-called upstream emissions), we are collaborating with various organizations, including “Together for Sustainability”, a joint initiative of companies in the chemical industry. Together, we’re developing methodical approaches to harmonize the way in which we account for emissions from chemical materials. Comparable calculation methods, which will also be used by our suppliers in the future, help to identify high emission loads, enabling us to work towards reducing them together with suppliers.
When it comes to downstream emissions, which occur after the goods have left our warehouse, we are working with our customers to develop more sustainable solutions, as our collaboration with Micron shows.
Sustainability requires collaboration
We have just launched another cooperation with Intel. Together we are funding an academic research program to accelerate sustainable semiconductor manufacturing in Europe. The program will specifically leverage artificial intelligence and machine learning technologies to drive innovation in semiconductor manufacturing processes and technologies. Potential solutions could include, environmentally friendlier materials, more efficient use of resources, AI-based solutions for modeling chemical processes, and opportunities for waste and emissions reductions.
We see a lot of movement in the entire semiconductor industry. In November 2022, the Semiconductor Climate Consortium was founded, which numerous manufacturers have joined. As a member, Merck is also committed to reducing emissions along the value chain. Together, challenges posed by climate change are being tackled that one company alone cannot master.
We know that sustainability requires collaboration. We cannot think in silos or limit ourselves to the boundaries of our own company. The entire value chain in the semiconductor industry needs to find new ways of achieving better solutions together.