{"id":76037,"date":"2024-03-27T14:12:37","date_gmt":"2024-03-27T03:42:37","guid":{"rendered":"https:\/\/www.aumanufacturing.com.au\/?p=76037"},"modified":"2024-03-27T14:13:10","modified_gmt":"2024-03-27T03:43:10","slug":"climate-change-puts-global-semiconductor-manufacturing-at-risk-can-the-industry-cope","status":"publish","type":"post","link":"https:\/\/www.aumanufacturing.com.au\/climate-change-puts-global-semiconductor-manufacturing-at-risk-can-the-industry-cope","title":{"rendered":"Climate change puts global semiconductor manufacturing at risk. Can the industry\u00a0cope?"},"content":{"rendered":"
By Josh Lepawsky<\/a>, Memorial University of Newfoundland<\/a><\/p>\n Semiconductors<\/a> are the basic building blocks of microchips. These technological marvels are in everything from lightbulbs and toothbrushes to cars, trains and planes, not to mention the vast array of electronics that have become integral to many people\u2019s daily lives.<\/p>\n The 21st century chip manufacturing industry has been described as \u201cat least as significant geopolitically as oil was in the 20th<\/a>.\u201d But semiconductor manufacturing requires vast quantities of water to keep machinery cool<\/a> and wafer sheets<\/a> free of debris, and the unfolding climate emergency puts the industry at risk.<\/p> Despite the industry\u2019s dependence on water, little attention has been paid to how changing environmental conditions may impact it. Reporting by journalists<\/a> and think tanks<\/a> tend to overlook climate as a risk factor for the future of the industry.<\/p>\n Yet, globally and regionally there are signs of trouble. Taiwan, for example, produces about 90 per cent<\/a> of the world\u2019s most advanced semiconductors and has been experiencing a significant drought since 2021<\/a>.<\/p>\n The drought is bad enough that Taiwanese farmers are being paid<\/a> to keep their fields fallow so water that would otherwise go to agriculture can be fed into semiconductor manufacturing plants. Taiwanese manufacturing plants have even had to resort to trucking water from one watershed<\/a> to another to overcome shortages.<\/p> Publicly available data on climate change-induced water stress<\/a>, combined with data on the location of existing, planned and announced semiconductor manufacturing facilities around the world<\/a>, all point to global patterns of concern for the future of semiconductor manufacturing.<\/p>\n No matter the climate change scenario considered \u2014 whether optimistic, business-as-usual or pessimistic \u2014 a minimum of 40 per cent<\/a> of all existing semiconductor manufacturing plants are located in watersheds that are anticipated to experience high or extremely high water stress risk by 2030.<\/p>\n High-risk watersheds are those in which 40 to 80 per cent of the total renewable surface and ground water available for all purposes (e.g., irrigation, industrial, domestic use) are in use. Extremely high-risk watersheds are those in which greater than 80 per cent of the total renewable surface and ground water are in use.<\/p>\n Much of the recent concern expressed over semiconductor manufacturing paints the issue in geopolitical terms about interstate rivalry, especially between China and the United States<\/a>.<\/p>\n Both the U.S.<\/a> and Europe<\/a> have announced major government funding for the semiconductor manufacturing industry, especially to bring back the facilities of companies that spent decades setting up manufacturing capacity outside of those regions<\/a>. However, the manufacturing facilities being announced or under construction in the U.S. and Europe are all located in regions that are already facing significant water stress.<\/p>\n Intel, Taiwan Semiconductor Manufacturing Company<\/a> (TSMC) and Samsung<\/a> are all building new facilities in the southwestern U.S. \u2014 a region that has been under official drought conditions since 1994<\/a>. In 2021, the U.S. Bureau of reclamation made its first ever shortage declaration for the Colorado River basin<\/a>.<\/p>\n Future climate change scenarios suggest more than 40 per cent of all new semiconductor manufacturing facilities announced since 2021 will be in watersheds likely to experience high- or extremely high-risk water stress scenarios.<\/p>\n Put simply, climate change and water shortages is creating risks for semiconductor manufacture in both the short- and long-term.<\/p>\n Semiconductor manufacturing facilities are multi-billion dollar investments. One does not simply pick a facility up from one location and plunk it down elsewhere if local water conditions become problematic.<\/p>\n As worrying as the future might be for the sector, aggregate water stress risks only tell part of the story. The importance of particular nodes<\/a> in global production networks for semiconductors is another key factor.<\/p>\n For example, TSMC is widely acknowledged as a world leader in manufacturing advanced semiconductors for companies like Apple<\/a>, Nvidia<\/a> and Cerebras<\/a>. Yet, the facilities where TSMC manufactures for those companies are located in just three sites in Taiwan. This makes the global production networks that manufacture these technologies quite fragile. Semiconductors, especially the most advanced ones, rely on a network of only a handful of facilities like TSMC\u2019s.<\/p>\nLooming water shortages ahead<\/h2>\n
The state of the industry<\/h2>\n