TSMC, Samsung and more: all the chip companies struggling with green energy. Report Ft

15 July 202310 months ago babelfish

Limited access to renewable energy in Asia has left big chip companies, such as TSMC and Samsung, behind their Western competition. The Financial Times article

Manufacturing chips, especially cutting-edge ones, is extremely energy-intensive. But Taiwan Semiconductor Manufacturing , the world's largest contract chip maker, and Samsung Electronics, the world's largest memory chip maker, are struggling to reduce their domestic carbon footprints.

THE DIFFICULTIES OF TSMC, SAMSUNG AND SK HYNIX

TSMC chairman Mark Liu told the company's annual general meeting that Taiwan's slow development of renewable energy is holding the company back from its environmental goals.

“Our sites overseas in the United States and China have already started using green energy fully,” Liu said. “However, we have not yet moved in Taiwan to use a lot of green energy. The reality is that Taiwan doesn't have enough green energy to use."

Liu said the industry's drive to adopt renewable energy has intensified recently, especially after the Russian invasion of Ukraine. "It is a competition between all economies, from the United States, to Japan, to Europe, to develop green energy," the president said. The war, which began in February last year, has thrown energy markets into turmoil, as Russia was a major exporter of oil and natural gas.

Samsung, meanwhile, said South Korea was one of the toughest countries in the world to source renewable energy due to limited sourcing options for businesses, citing a unanimous opinion from RE100 members, a global renewable energy initiative for businesses.

Smaller SK Hynix said renewable energy accounted for just 4% of total usage in 2021, while Japan's Kioxia reached just 0.02% for the 12 months to March 2022.

CHIPS AND RENEWABLE ENERGY

Limited renewable energy sources could mean that chips made in Asia are less environmentally friendly than those made in the United States and Europe, which is increasingly worrying customers.

Doris Hsu, president and chief executive officer of GlobalWafers, the world's third-largest maker of wafer materials, said customers, especially European chipmakers, are increasingly demanding to buy wafers produced with green energy. GlobalWafers has manufacturing facilities in nine countries across Asia, the United States and Europe.

“This will be a long-term trend and will affect a company's competitiveness. Whether your energy is green enough could become a deciding factor in getting orders in the future,” Hsu said. “Customers will compare price, quality and whether your energy source is green.”

Ma Hsu said sourcing enough renewable energy in Taiwan, Japan and South Korea is a challenge. "These places are all quite populous and it's not easy to get enough land or roofs for renewable sources like solar farms," he said.

"In most Asian countries, access to wind and solar energy is limited," said a South Korean chip industry executive. “Also, it is not easy to source renewable energy from other countries due to geographical and diplomatic limitations.”

Samsung, TSMC and SK Hynix have pledged to use 100 percent renewable energy for global operations by 2050, while US chipmaker Intel and European chipmakers Infineon and STMicroelectronics aim to achieve the same goal by 2030, according to the report. analysis of Nikkei Asia on the information provided by companies. Leading Japanese chipmakers Kioxia and Sony have both pledged to fully use renewable energy by 2040, lagging behind their Western counterparts.

The shortage of renewable energy could impact Asian chipmakers' roadmap to achieve net-zero emissions. Electricity usage accounts for 62 percent of TSMC's carbon emissions, according to the company. Liu said the company is considering ways to get ahead of the curve and shift its goal of achieving 100% green energy between 2030 and 2050.

The green rush comes as major economies push to bring semiconductor manufacturing locally, in a strategy that plans to persuade major Asian chipmakers to expand plants outside their home territories.

A poor renewable energy mix and a lack of mature and recognized renewable energy certificates in the region are two factors holding back the Asian chip industry in its quest for greener operations, chip makers and analysts said.

Coal, oil and natural gas generation accounted for more than 80 percent of Taiwan's energy needs in 2022, while renewable energy accounted for just over 8 percent, according to the Taiwan Energy Bureau. Additionally, Taiwan is phasing out the use of nuclear power – a low-emissions energy source that accounted for just over 8 percent of the total energy mix last year – by 2025.

South Korea is in a similar situation. According to data from Korea Electric Power, in 2022 renewable sources accounted for less than 9% of production, while nuclear energy and fossil fuels totaled almost 90%.

According to the Energy Information Administration, the United States generated 22% of its electricity from renewable sources in 2022. Renewables accounted for 41% of the energy produced in the EU in 2021, according to official data. But when you look at the bloc's total energy mix, including imports, renewables accounted for just over 17% of the total.

This situation could affect investment and even jeopardize Asian supplier orders from global customers such as Apple, Google and Microsoft. The three companies have pledged to use 100 percent renewable energy by 2025 and have pushed their supply chains to facilitate this shift.

TH Tung, chief strategic officer of chip substrate maker Kinsus Interconnect Technology, said Taiwan's goal of 20 percent renewable energy by 2025 lags behind the rest of the world and poses a risk to China's position. island in the global technology supply chain. Kinsus is a supplier to Intel, AMD, and Nvidia, while Tung also serves as president of iPhone assembler Pegatron, Kinsus's parent company.

“High-carbon energy production would cause Taiwan to be disliked by international society,” said Tung, who is also deputy director of the Taiwan Climate Partnership, a supply chain carbon reduction initiative launched from leading Taiwanese technology vendors, including TSMC, Pegatron, and Apple supplier Delta Electronics.

Kyungrak Kwon, a renewable energy expert at Plan 1.5, a nonprofit policy advocacy organization, said the South Korean government was not prioritizing the expansion of renewable energy, and that, in turn, "companies Korean companies do not receive sufficient supplies of renewable energy, which could undermine their competitiveness”.

Christophe Fouquet, executive vice president of European chip tool maker ASML, told Nikkei Asia that energy supply will be an essential criterion for his company when it comes to choosing where to invest. “Over time, [green energy] becomes a condition for us to be able to run our business. So before choosing a site, we need to make sure there is access to green energy."

Unlike the EU and the US, which are large economic blocs, the Asia-Pacific region is more fragmented, making it more difficult to create a unified market for renewable energy certificates, said an Infineon executive, the Europe's largest chip maker. Infineon said it has already achieved the goal of 100% green energy use, including through the purchase of renewable energy certificates, in its operations in Europe and the United States, but has not yet achieved this goal in its activity in Asia-Pacific.

According to GlobalWafers' Hsu, meeting requests like those of Infineon could be a matter of survival. “Taiwan not only needs enough electricity for future growth, it also needs green energy to stay competitive.”

(Excerpt from the press release of eprcommunication)

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/tsmc-samsung-chip-energia-pulita-asia/ on Sat, 15 Jul 2023 05:41:30 +0000.