Large Environmental Impact Of Chips Collides With Their Role In The Transition


In recent months, silicon microchips have come to the fore, largely due to their scarcity – and the effect it has on industries as heavy as automotive – and because of their crucial role in the fight against climate change. Specifically, without semiconductors, it would not be possible to develop solar panels, wind turbines or electric vehicles, all of which are essential to achieve a zero emissions economy in the near future. However, this key piece of the green future has a dark side: its manufacture requires huge amounts of energy and water, in addition to generating toxic waste .

Faced with the climate crisis facing the planet, governments have committed to achieving zero emissions by 2050, while they are betting on boosting the manufacture of semiconductors, which “represents most of the carbon production” of electronic devices , according to a 2020 Harvard University research. In this way, to respond to the growing demand for chips and solve the delays derived from the pandemic, the United States intends to finance this industry with 52,000 million dollars in five years, while the EU has new legislation to increase its global chip market share to 20% in the next decade.

Faced with this tipping point, the semiconductor industry has set out to reduce its carbon footprint while continuing to grow. In part, this change of course has been influenced by the arrival of more critical investors and the weight of investment based on ESG criteria (social, environmental and good governance), indicate members of the sector to The Guardian .

Likewise, the greater availability of renewable energies has contributed , which in a certain way closes the circle. Examples of this commitment are Intel, which has committed to obtain 100% of its energy from these types of sources by 2030, or TMC, which uses almost 5% of all electricity in Taiwan and last year signed an agreement to 20 years with the Danish energy company Ørsted to supply you with renewable energy.

Among the bets of the industry is also the one to reduce the emission of gases through the implantation of treatment plants and the substitution of the most polluting gases by other “cleaner” ones -such as fluorine, with a less impact on global warming- o Those used to etch patterns and clean the silicon surface of a wafer, the part used to make semiconductors.

A process of change and adaptation that will not be cheap, but will respond to growing demand and consumer concerns, who are willing to pay more if the product has continued to be more sustainably produced .

The chip crisis
It started in 2020 as a temporary mismatch between supply and demand and, now, can last until next year . The semiconductor shortage is the result of a lack of foresight on the part of the industry, they did not think that with the pandemic people would save and invest in products such as computers; the stoppage of factories; and the fact that today almost all products carry a chip.

One of the sectors most affected by this crisis is the automobile sector, which is facing the global shortage of microchips by announcing the closure of factories . This, in turn, has repercussions on dealers, their workers and consumers. A crisis that could end up generating inflationary pressures and weighing down the economic recovery , as the Bank of Spain recently warned in a study.

Semiconductor shortages have also affected the manufacture of electrical equipment and supplies, the manufacture of computer and electronic products, the manufacture of rubber and plastic products, and the chemical industry.

It is worth mentioning that other raw materials -chemical products, plastics, wood or industrial metals- are also having supply problems as a result of the recovery in demand at a global level, which is causing the increase in their price .

24% growth
Despite this, Bank of America sees growing demand for chips and has consequently increased its sales prospects for the sector.

According to its forecasts, total industry sales will increase to 544,000 million dollars, 24% , in 2021, 3% more than its past projections.

In addition, the entity’s analysts have included among its main actions for the last quarter of the year Nvidia and the car chip supplier ON Semiconductor, according to Business Insider .


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