The semiconductor industry powers everything from smartphones to AI supercomputers. But behind the sleek technology lies an energy-hungry manufacturing process that consumes vast amounts of electricity, water, and chemicals. As demand for chips grows, so does the industry’s carbon footprint.
1. Semiconductor manufacturing consumes 100-150 kWh of electricity per square centimeter of wafer produced
Every tiny semiconductor chip starts as a wafer, and producing these wafers is energy-intensive. From heating silicon to extreme temperatures to using complex machines like lithography tools, every step requires massive energy.
To reduce this, manufacturers should focus on improving efficiency in key areas like chemical etching, deposition, and photolithography. Using AI-driven predictive maintenance can help reduce waste and improve machine efficiency. Investing in next-generation materials that require less processing can also cut power use.
2. The industry accounts for 1% of global electricity consumption, expected to double by 2030
Semiconductor fabs use as much electricity as entire countries. As demand for AI, cloud computing, and 5G grows, chip production will require even more power.
To prevent this from spiraling out of control, companies must transition to renewable energy, optimize their manufacturing processes, and invest in power-efficient chip designs. Governments should offer incentives for green manufacturing practices, ensuring that future fabs operate with minimal environmental impact.
3. A single 12-inch wafer fab can consume 100-200 MW of power, equivalent to a small city
One semiconductor fabrication plant (fab) can use as much energy as a city with hundreds of thousands of residents. This energy is needed for running high-powered machines, air filtration, and chemical processing.
To address this, manufacturers should implement smart grids within fabs, use advanced cooling techniques, and improve energy recovery systems. One promising solution is using waste heat from the process to power other operations within the facility.
4. Taiwan’s TSMC uses 7% of the country’s total electricity, projected to hit 12% by 2030
Taiwan is a semiconductor powerhouse, and TSMC—the world’s largest chip manufacturer—is a key driver of its energy demand. With more fabs being built, the company’s power consumption is expected to rise significantly.
To reduce this burden, TSMC has pledged to source 100% of its energy from renewables by 2050. Other manufacturers should follow suit, securing long-term renewable energy contracts and investing in on-site solar and wind power.
5. The semiconductor industry emits more than 15 million metric tons of CO₂ annually, projected to double by 2030
The energy used in fabs doesn’t just consume electricity—it also generates massive amounts of carbon emissions. The biggest contributors are fossil fuel-based energy sources and greenhouse gas emissions from chemical processes.
Reducing these emissions requires a multi-pronged approach: using carbon capture technology, transitioning to cleaner power sources, and improving energy efficiency at every stage of production.
6. Water use is 2-4 million gallons per day per fab, with some fabs exceeding 10 million gallons daily
Water is essential in semiconductor manufacturing, used for cooling, cleaning, and chemical processing. Some fabs, particularly in regions like Taiwan and Arizona, face serious water shortages.
To address this, companies should invest in water recycling and purification systems. TSMC, for example, has achieved a water recycling rate of over 80%. Other fabs should aim for similar benchmarks to reduce their reliance on fresh water.
7. A single chip fabrication process can require up to 1,000 different chemicals, many of which are hazardous
Semiconductor production involves a cocktail of chemicals, including solvents, acids, and gases that can be harmful to both workers and the environment.
Reducing chemical use involves switching to safer alternatives, improving waste management, and adopting closed-loop chemical recycling systems. Governments must also enforce stricter environmental regulations to limit harmful emissions.
8. Photolithography machines like ASML’s EUV scanners use more than 1 MW of electricity each
The latest extreme ultraviolet (EUV) lithography machines, essential for making advanced chips, are among the most energy-hungry devices in the industry. Each machine requires as much power as a small factory.
To make this process more sustainable, manufacturers should focus on optimizing EUV machine efficiency, reducing standby power consumption, and investing in new lithography techniques that require less energy.
9. The industry is shifting to renewable energy, with companies like Intel and TSMC targeting 100% renewables by 2030
Major chipmakers are moving toward clean energy, but the transition is slow. Intel and TSMC have both committed to 100% renewable electricity within the next decade.
To speed up this shift, companies must sign more power purchase agreements (PPAs) with renewable energy providers, install solar and wind power at fab sites, and explore energy storage solutions to ensure a stable power supply.
10. Intel reduced its emissions by 15% in 2022 but still consumed more than 10 TWh of energy
Intel has made strides in reducing its carbon footprint, but it still consumes enormous amounts of power.
Other companies can learn from Intel’s strategies, such as optimizing manufacturing processes, investing in green buildings, and purchasing renewable energy credits. More transparency in reporting emissions will also push the industry toward better sustainability practices.
11. Samsung’s fabs consumed 19.3 TWh in 2021, with 86% from non-renewable sources
Samsung’s semiconductor operations are still largely powered by fossil fuels. If the company wants to meet its sustainability goals, it needs to shift aggressively toward renewables.
This could involve expanding solar and wind power investments, setting stricter energy efficiency targets, and collaborating with governments to develop greener grid infrastructure.
12. TSMC alone used 16 TWh of electricity in 2022, making it one of the largest corporate consumers in Asia
TSMC’s massive energy demand highlights the need for more sustainable manufacturing. The company is investing in renewable energy, but there is still room for improvement.
One possible solution is using AI to optimize energy consumption in fabs. AI can predict power usage patterns, reduce waste, and help manage energy resources more efficiently.
13. NVIDIA and AMD rely on TSMC and Samsung, meaning their supply chains have high embedded energy costs
NVIDIA and AMD design some of the most powerful chips in the world, but they don’t manufacture them in-house. Instead, they rely on foundries like TSMC and Samsung, which are among the biggest energy consumers in the semiconductor industry.
This means that while NVIDIA and AMD don’t directly run fabs, their supply chain is responsible for massive energy use. To reduce their environmental footprint, these companies must put more pressure on their manufacturing partners to adopt greener energy sources.
They can also improve their chip architectures to be more power-efficient, reducing the overall energy needed for production and operation.
Additionally, companies should be more transparent about the carbon footprint of their supply chains. If customers can see the environmental impact of their chips, it creates more accountability and drives demand for cleaner manufacturing.
14. EUV lithography is one of the most energy-intensive processes, consuming more than 10 times the energy of older lithography methods
Extreme ultraviolet (EUV) lithography is crucial for making the smallest and most advanced chips, but it comes with a heavy energy cost. Each EUV machine requires intense bursts of energy to generate the necessary light for etching circuits onto wafers.
While EUV is the future of chip manufacturing, companies need to make it more energy-efficient. One way to do this is by improving the reflectivity of mirrors in EUV machines, which would allow for better light usage and lower power needs.
Another approach is to develop new materials that require less precise etching, reducing the number of EUV passes required.
Until these improvements happen, companies should focus on offsetting the environmental impact by using more renewable energy to power their EUV operations.
15. Producing a single high-end chip can generate more than 35 kg of CO₂ equivalent emissions
Every smartphone, laptop, and gaming console contains chips that required significant energy to manufacture. High-end chips, like those used in AI applications, require even more processing steps, which increases emissions.
To lower this impact, manufacturers should focus on energy efficiency not just during fabrication but also in chip design. Reducing the number of processing steps, using alternative materials, and implementing low-energy packaging techniques can all help.
Consumers also play a role by choosing products from companies that prioritize sustainability. When demand shifts toward greener technology, manufacturers will have to follow.
16. China’s chip industry is projected to increase energy consumption by 50% by 2030 due to domestic manufacturing expansion
China is rapidly expanding its semiconductor industry to reduce reliance on foreign suppliers. However, this expansion comes at a high energy cost, as new fabs are being built across the country.
To make this growth more sustainable, China must prioritize renewable energy for its semiconductor sector. Government policies should encourage the use of solar and wind power in chip fabs, and investments in energy-efficient manufacturing techniques should be a top priority.
International collaboration on greener chip manufacturing standards could also help ensure that China’s semiconductor growth does not come at the expense of the environment.
17. Memory chip production is among the most energy-intensive, requiring up to 1,400 kWh per wafer
Memory chips, like those used in SSDs and RAM, require multiple layers of data storage structures, which increases the complexity and energy consumption of their production.
One way to address this is by shifting to more energy-efficient memory technologies, such as resistive RAM (ReRAM) or magnetoresistive RAM (MRAM). These alternatives could reduce the number of processing steps and lower overall energy consumption.
Companies should also optimize their manufacturing process by adopting AI-driven energy management systems to detect and eliminate inefficiencies.
18. Chip packaging and testing contribute more than 20% of the total energy consumption in the semiconductor supply chain
While chip fabrication is the most energy-intensive step, packaging and testing also consume significant amounts of power. Packaging involves enclosing chips in protective materials, while testing ensures they function correctly before being shipped to customers.
To reduce energy consumption, companies should streamline the packaging process using more efficient materials and minimize the number of tests performed by using AI-powered predictive models. Switching to recyclable or biodegradable packaging materials can also help reduce environmental impact.
19. AI chip training power use is skyrocketing, with large models requiring thousands of GPUs consuming megawatts of power
AI models require powerful GPUs to train, and these GPUs consume enormous amounts of electricity. As AI becomes more advanced, the power needed to train new models will only increase.
One solution is to develop more energy-efficient AI chips specifically designed for deep learning tasks. Companies like NVIDIA and Google are already working on custom AI accelerators that can perform the same tasks using less energy.
Another approach is to shift AI training to data centers powered entirely by renewable energy. Companies can also use techniques like “sparse training,” which reduces the number of calculations needed to train a model, cutting down on power use.
20. Water scarcity issues have forced fabs in Taiwan and South Korea to implement aggressive water recycling, with more than 80% reuse rates
Taiwan and South Korea are semiconductor powerhouses, but both countries face water shortages. To address this, semiconductor companies have implemented advanced water recycling systems.
Other regions should adopt similar strategies by investing in closed-loop water systems that filter and reuse wastewater. Governments can support this by offering tax incentives for companies that achieve high water reuse rates.
Customers should also be aware of water-intensive manufacturing and push for greater transparency about how much water companies use in their chip production processes.
21. The semiconductor industry is responsible for more than 30% of global perfluorocarbon (PFC) emissions, potent greenhouse gases
Perfluorocarbons (PFCs) are among the most harmful greenhouse gases, with a much higher global warming potential than CO₂. Unfortunately, they are widely used in semiconductor manufacturing.
To reduce PFC emissions, companies should invest in better gas recovery systems and explore alternative chemicals that are less harmful. Some manufacturers are already experimenting with lower-impact etching and cleaning techniques, which should be adopted industry-wide.
Stricter regulations on PFC use could also push companies toward greener alternatives faster.
22. Intel uses 3.1 billion gallons of water per year, with more than 95% of it reclaimed
Intel has made significant progress in water recycling, reclaiming the vast majority of the water it uses in chip manufacturing.
Other semiconductor manufacturers should aim for similar or better water efficiency. Investing in advanced filtration and purification systems will not only help the environment but also reduce costs in the long run.
Governments should incentivize fabs to reach high water reclamation rates by providing tax benefits or subsidies for companies that achieve sustainability milestones.
23. Samsung recycled 70% of its process chemicals in 2022, reducing hazardous waste
Chemical waste is a major issue in semiconductor manufacturing, but Samsung has made strides in recycling its process chemicals.
Other companies should follow this example by investing in chemical recovery technologies. Adopting a circular economy approach, where chemicals are continuously reused instead of discarded, will significantly lower the environmental impact of chip production.
Governments could introduce regulations requiring semiconductor companies to meet minimum chemical recycling targets.
24. Global semiconductor energy demand is growing at 7% annually, outpacing improvements in energy efficiency
Even as chipmakers work to improve efficiency, overall energy consumption in the industry continues to rise due to increased demand.
To slow this growth, manufacturers must focus on next-generation chip designs that require less power both in production and operation. Developing low-power semiconductors and reducing the energy needs of data centers can help offset rising demand.
Policymakers should also encourage investment in R&D focused on energy-efficient chip manufacturing.
25. Data centers powered by AI chips are projected to consume more than 10% of global electricity by 2030
The rise of AI has fueled demand for high-performance chips that power data centers. These facilities already account for a significant portion of global electricity consumption, and as AI workloads grow, their power needs are set to skyrocket.
To tackle this, data centers must shift towards renewable energy sources and invest in more energy-efficient cooling systems. One effective solution is liquid cooling, which is far more efficient than traditional air cooling.
Additionally, AI itself can be used to optimize energy use in data centers by predicting demand and adjusting power distribution accordingly.
For businesses running AI models, optimizing algorithms to use less computational power can make a big difference. Researchers are also exploring “edge AI,” where processing happens locally on devices rather than in data centers, reducing overall energy demand.
26. Carbon neutrality goals: Intel by 2040, TSMC by 2050, Samsung by 2050
Major semiconductor manufacturers have set ambitious goals to reach carbon neutrality, but the timelines vary. Intel aims for 2040, while TSMC and Samsung have set their targets for 2050.
To achieve these goals, chipmakers must rapidly increase their reliance on renewable energy, improve energy efficiency in manufacturing, and invest in carbon offset projects. However, the industry needs to move faster—waiting until 2050 may not be enough to mitigate climate change effectively.
Stricter regulations, corporate transparency, and consumer demand for greener electronics can push companies to accelerate their sustainability efforts. Governments should also offer stronger incentives for semiconductor manufacturers to transition to net-zero emissions sooner.
27. Hydrogen and fuel cells are being explored as alternative power sources for fabs
Semiconductor fabs require massive amounts of energy, and many companies are looking at alternative power sources, including hydrogen fuel cells. Hydrogen has the potential to provide a clean, reliable energy source, reducing dependence on fossil fuels.
Japan and South Korea are leading in hydrogen infrastructure development, and some fabs are already piloting hydrogen-powered operations. However, for this to be a viable solution, companies must ensure they use green hydrogen, which is produced using renewable energy, rather than grey hydrogen, which is derived from fossil fuels.
For hydrogen to play a larger role in semiconductor manufacturing, investment in infrastructure and cost reductions are needed. Governments can help by funding research and providing incentives for companies to adopt hydrogen-based energy solutions.
28. Semiconductor recycling remains low, with less than 20% of outdated chips and wafers being repurposed
E-waste is a growing problem, and semiconductor recycling is still in its infancy. Currently, less than 20% of outdated chips and wafers are recycled, meaning that most end up in landfills or incinerators.
One challenge is that semiconductors are made from complex materials that are difficult to separate and reuse. However, new recycling technologies are emerging that can recover valuable metals and silicon from discarded chips.
Manufacturers should invest in closed-loop recycling systems to recover materials from production scrap and outdated chips. Consumers can also play a role by properly disposing of their electronic devices through certified recycling programs.
Governments should enforce stricter e-waste regulations and offer incentives to companies that incorporate recycled materials into their production processes.
29. New materials like gallium nitride (GaN) and silicon carbide (SiC) promise 50% lower power losses compared to traditional silicon
Traditional silicon-based semiconductors are reaching their physical limits in terms of efficiency. New materials like gallium nitride (GaN) and silicon carbide (SiC) are gaining attention because they offer much lower power losses and higher efficiency.
GaN and SiC chips are already being used in power electronics, such as electric vehicle (EV) chargers and energy-efficient power supplies. By adopting these materials for broader semiconductor applications, manufacturers can reduce energy consumption and heat generation.
While GaN and SiC chips are currently more expensive than silicon, production costs are expected to drop as adoption increases. Investing in these materials now could lead to significant energy savings across the industry in the long term.
30. Government incentives (e.g., U.S. CHIPS Act, EU Chips Act) now include sustainability clauses to push greener semiconductor manufacturing
Governments worldwide are investing heavily in semiconductor manufacturing to ensure supply chain resilience. However, they are also pushing for greener production processes through sustainability clauses in funding programs like the U.S. CHIPS Act and the EU Chips Act.
These incentives encourage companies to adopt energy-efficient manufacturing practices, invest in renewable energy, and improve waste management. To qualify for funding, companies may need to demonstrate progress toward sustainability goals, such as reducing carbon emissions and water usage.
While financial incentives help drive greener manufacturing, stricter regulations may also be necessary. Governments should enforce higher environmental standards and penalize companies that fail to meet sustainability targets.
wrapping it up
Semiconductor manufacturing remains an energy-intensive process, with chip fabrication plants (fabs) consuming vast amounts of electricity and water. As demand for more powerful and efficient chips rises, so does the industry’s environmental footprint.
However, recent trends indicate a growing commitment to sustainability, with leading manufacturers investing in renewable energy, innovative cooling technologies, and energy-efficient production methods.
