Empowering Sustainability: 4 strategies to significantly reduce the Semiconductor Industry’s carbon footprint

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The Semiconductor industry is a key enabler for nearly every device we use to travel, work, and entertain ourselves. It’s needed for every sustainability effort – smart grids, the transition to renewables, low carbon footprint logistics, and supply chains. Even scientific discoveries and energy efficiency measures in factories rely on it. These chips are everywhere, and our net zero success hinges on the chips that silently power our efforts.

Yet the semiconductor industry also needs to recalibrate its environmental impact. In 2021, it used enough energy to power a city of 25 million for an entire year.

The soldering robot operation with electronic board. Mainboard manufacturing process.
Semiconductor fabrication facilities are essential to our everyday way of life – but they are heavy energy and water users with a large carbon footprint.


Consequently, in 2022, COP27 saw the creation of a Semiconductor Climate Consortium with 60 founding members pledging to reduce emissions to 0% by 2050.
The initiative underscores the semiconductor industry’s vital role in meeting the planet’s sustainability targets. It’s a lofty but achievable goal.

By weaving sustainability into semiconductor-fabricated electrical network designs from the outset, and with the right strategic planning and early-stage implementation, the industry can significantly reduce the carbon footprint of its chip manufacturing processes.

Complex production, resource-intensive supply chains

Semicon fabs are colossal consumers of water and energy. The giga-sized factories need increasingly massive energy supplies and significant water usage for cooling. In 2022, TSMC, the world’s largest chip manufacturer, consumed 97 million metric tons of water and 22 thousand gigawatt-hours – a significant portion of Taiwan’s total energy output.

In addition, suppliers who provide the necessary materials for production also generate emissions (known as a company’s Scope 3 emissions). This adds considerably to the industry’s carbon footprint. All in all, producing today’s advanced 3nm chips is expected to consume nearly 8 billion kilowatt-hours annually.  

Given these high levels of consumption and the associated Scope 3 emissions, there is a pressing need for a strategic pivot that focuses on optimizing energy use and enhancing energy efficiency in Semicon electrical networks.   

Embracing strategies that work

There are 4 key strategies that I believe can optimize electrical networks in Semicon factories:

  1. Distribution Lineup Optimization: This initial strategy lays the groundwork for a robust electrical network layout and improves operational efficiency. Begin by determining the appropriate starting point for energy inputs and optimizing transformer placements. These are based on load demands, cooling efficiency, and integration with smart grid technology. Then, ensure efficient voltage and current distribution.

    Your optimization strategy must remain agile to adapt to changing regulatory demands. These regulations often require new technology integration, design modifications, additional reporting, and advanced monitoring and control systems to support smart grid technologies. New safety or efficiency standards may even require different distribution lineup configurations. An agile optimization strategy ensures ongoing compliance and prepares the infrastructure for future smart grid developments.  
  2. Standardization: In substation designs, consistency and replicability of components simplify construction, reducing the risk of miswiring and streamlining maintenance. For example, a large Semicon fab has 300 MV substations, and we can standardize the designs of 250 of those. That’s a significant optimization of lead time, manufacturing efficiency, and energy usage. And it makes it more responsive to customers’ evolving needs and lowers total ownership costs. Replacement parts from suppliers are also more readily available or have much shorter lead times.

    Standardization also helps semiconductor manufacturers more easily comply with international or regional regulations. It helps simplify certification processes and regulations that may require evidence of reliable manufacturing practices and product stability.
  3. Distributed Energy Resources (DERs): Integrating DERs – like microgrids consisting of solar panels, fuel cells, and battery storage – provides a clean and reliable energy source compared to traditional methods. Implementing microgrids significantly reduces carbon emissions and energy costs. This showcases the potential for broader adoption across the industry to improve resilience, optimize energy loads, and support sustainable operations.

    DERs can also be a robust response to regulatory changes that incentivize or mandate renewable energy and decrease carbon footprints. In fact, a significant advantage of distributed energy is that it can meet diverse regulatory environments.
  4. Collaboration with Suppliers and Partners: Semiconductor facilities have complex electrical ecosystems. Optimizing the electrical network requires collaboration and engagement with expert partners – particularly those specializing in advanced energy management and automation solutions.

    These partnerships are essential to transforming production facilities into models of energy efficiency and sustainability by utilizing advanced IoT-enabled systems and cutting-edge technologies. Services provided by these partners, such as energy audits and the implementation of digital modeling architectures, play a crucial role. They drive down operational costs and carbon footprints, ensuring network reliability and efficiency.

    Beyond achieving sustainability goals, collaborations also pave the way for strategic ventures. These efforts can take the form of joint investments in research and development or focused lobbying to secure incentives under the CHIPS Act and influence future policy.

    The CHIPS Act is a pivotal legislative mandate in the United States that the semiconductor industry must navigate. With an ambitious goal to reduce energy consumption of microelectronics by 1000 times in the next two decades as a catalyzes innovation. Imagine reducing energy consumption by that much!

Charting the course for sustainable Semicon fabs from day one

Each of these strategies is more than just a standalone solution. They’re interconnected pieces that create optimized, resilient, and adaptable networks. Designing electrical networks strategically and making early engineering choices sets the stage for more resilient, efficient operations and responsible resource use.

Because of the complexity of these projects, having an expert partner like Schneider Electric can be critical to embodying these strategies. Expert partners can use their deep industry knowledge to guide your decision-making with these strategies. They can also ensure continuous improvement and long-term support well beyond the initial construction of your facilities.

To deepen your understanding and take practical steps towards a more sustainable practice, download our Semiconductors Reference Guide for insights on ten critical business challenges impacting this industry and the offers and solutions needed to overcome them.

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