The semiconductor industry is highly resource-intensive, requiring large amounts of water, electricity, and raw materials, including various chemicals, during production. Consequently, the industry generates significant greenhouse gas (GHG) emissions, such as carbon dioxide and polyfluorinated chemicals (PFCs).
Sabrina Yu, an analyst at DIGITIMES Research, notes that low-carbon power is a key strategy for semiconductor companies aiming for net-zero emissions. While cutting operational emissions, including Scope 1 and Scope 2 emissions, is crucial, Scope 3 emissions—those tied to the broader value chain—are also substantial. This reality has compelled chipmakers to collaborate across the supply chain to reduce their carbon footprint.
Energy consumption throughout the lifecycle of end products, such as smartphones, vehicles, and data centers, significantly contributes to Scope 3 emissions, particularly from the energy used by chips in these products. However, not every semiconductor firm includes this factor in their Scope 3 emissions reporting.
Among the six leading global semiconductor companies, Intel stands out with the most aggressive net-zero commitment, pledging to reach net-zero by 2040. Meanwhile, Samsung, Micron, and Taiwan's TSMC, UMC, and ASE have set their targets for 2050.
TSMC made headlines in September 2023 when it accelerated its RE100 goal—reaching 100% renewable energy usage—by ten years, moving from 2050 to 2040. However, Taiwanese semiconductor companies still trail behind international peers in renewable energy adoption. Intel, for instance, achieved 99% renewable energy usage in 2023, while TSMC's was only 11.2%, with a goal of reaching 60% by 2030.
In June 2023, the International Financial Reporting Standards (IFRS) introduced climate disclosure guidelines (S2) that require companies to report Scope 1, Scope 2, and eventually Scope 3 emissions. Although companies are exempt from reporting Scope 3 during a transition period, full disclosure will be required later.
DIGITIMES Research points out that the six major semiconductor companies have already disclosed their Scope 1 and 2 emissions and are actively auditing Scope 3 emissions to identify carbon hotspots for reduction.
According to their sustainability reports, Samsung's Device Solutions group and TSMC had the highest Scope 1 and 2 emissions in 2023, both exceeding 10 million metric tons of CO2 equivalent, while Intel had the lowest at under one million metric tons.
For Scope 3 emissions, Intel's product energy use alone accounted for 14.04 million metric tons of CO2 equivalent, while Samsung's DS group reported 8.75 million metric tons. Most semiconductor firms' Scope 3 emissions are primarily driven by downstream product energy use, upstream procurement, and capital goods. TSMC's Scope 3 reporting, however, excludes emissions from capital goods and product energy use, resulting in lower disclosed emissions.
To reduce operational emissions, semiconductor companies focus on renewable energy and energy efficiency, particularly for Scope 2 emissions. TSMC has pioneered a joint renewable energy procurement model. Regarding Scope 1 emissions, companies like TSMC and UMC have long worked on reducing fluorinated GHGs used in production through gas abatement technologies, alternative chemicals with lower global warming potential (GWP), and process improvements.
On the value chain side, companies are addressing carbon reduction by collaborating with upstream suppliers, enhancing product energy efficiency, and developing low-carbon technologies. Downstream, some are exploring nature-based carbon offsets, negative-emission technologies, and carbon credit investments.
Many semiconductor firms are also developing digital platforms and tools to help suppliers identify carbon hotspots and create reduction strategies. UMC and ASE, for example, have invested in downstream carbon reduction initiatives, with UMC even financing net-zero technologies.
In conclusion, semiconductor companies are adopting comprehensive net-zero strategies, focusing not just on reducing operational emissions but also on collaborating with suppliers and partners to decarbonize the entire value chain—paving the way for their net-zero goals.
