What Is Semiconductor Sustainability?

Semiconductor sustainability relates to the industry’s efforts toward minimizing its environmental impact and adopting socially responsible, ethical practices across its supply chain. This means reducing carbon footprint and waste, and conserving resources like water and energy during manufacturing.

The current impact of the semiconductor industry

Semiconductors have a major environmental footprint, primarily during manufacturing. For example, 77% of Apple’s total emissions come from manufacturing, with chip fabrication alone responsible for about half of that. Battery-powered devices emit most of their carbon during production, before they make it into operations, while always-connected devices create ongoing emissions during use. 

The global semiconductor industry's energy consumption has more than doubled over the past eight years, increasing from 58,326 gigawatt-hours (GWh) in 2015 to 131,278 GWh in 2023. As chip demand grows, assessing the sustainability of both front-end and back-end processes in semiconductor ecosystems becomes increasingly critical.

Key areas of semiconductor sustainability

Semiconductor sustainability focuses mainly on these areas:

• Raw material sourcing: Ensuring ethical and responsible sourcing of semiconductor raw materials like rare earth elements to minimize environmental degradation and human rights abuses in the supply chain.

• Energy consumption: Since semiconductor fabrication is highly energy-intensive, transitioning to renewable energy and improving energy efficiency are crucial to reducing the industry’s environmental impact.

• Water usage: Chip manufacturing requires ultra-pure water (UPW) in vast quantities for cleaning and cooling silicon wafers at each stage. A single fab can use up to 10 million gallons per day. Investing in recycling and recirculation technology or water-free cooling systems can help reduce strain on local ecosystems.

• Waste management: Managing chemical waste, hazardous by-products, and production scrap is essential for protecting human health and the environment, especially in densely packed industrial zones.

• Carbon emissions: From direct process emissions (scope 1) to supply chain and product use (scope 3), reducing greenhouse gas (GHG) emissions is a central challenge and priority for long-term sustainability.

Importance to businesses

Prioritizing semiconductor sustainability is vital for:

• Risk management: Responsible practices, like prioritizing supplier sustainability and social performance, can help semiconductor foundries and fabless companies avoid disruptions, fines, and reputational damage.

• Customer and investor expectations: Buyers and shareholders increasingly demand supply chain transparency and sustainability. Companies that lead on ESG principles often find it easier to secure contracts and attract investments.

• Cost savings: Improving energy efficiency, reducing waste, and optimizing resource use can significantly lower operational costs, especially in an energy-intensive industry like semiconductors.

• Regulatory compliance: Jurisdictions worldwide are tightening environmental laws. Staying ahead of regulations on emissions, hazardous materials, and energy sourcing ensures continuity and avoids potential sanctions.

Steps to semiconductor sustainability

Focus on these key factors to ensure sustainable practices:

• Supplier engagement: Collaborating with upstream suppliers to ensure they follow environmental standards, use responsible sourcing practices, and share data on emissions and resource use.

• Transparency: Providing clear, verifiable information on sustainability performance across operations to build trust with stakeholders and help track progress.

• Reporting: Regular ESG reporting is essential for measuring progress and maintaining transparency with stakeholders. Semiconductor manufacturers are embedding carbon emissions, energy consumption, and waste data into ERP and manufacturing systems to support real-time, integrated sustainability tracking.

• Focus on innovation: Investing in low-impact materials, energy-efficient chip designs, and greener manufacturing processes to reduce resource intensity and environmental harm.

• Lifecycle management: Overseeing the full product lifecycle, from sourcing to disposal, to reduce environmental impact. This includes energy-efficient design, carbon reduction, and circular practices like recycling. 

Industry trends

The semiconductor industry is slowly shifting to more sustainable operations and resource-efficient practices, including:

• Green fabs: Semiconductor manufacturers are building or retrofitting facilities with energy-efficient technologies, advanced water recycling systems, and low-emission processes to reduce environmental impact.

• Greater use of recycled materials: There is growing adoption of recycled water, metals, plastics, and packaging in both chip production and product design to lessen demand for virgin resources and minimize waste.

• Renewable energy: Leading chipmakers are transitioning to solar, wind, and other renewable sources to power energy-intensive fabs, helping to cut scope 2 emissions.

• Circular economy initiatives: Companies are beginning to explore closed-loop systems where materials and components are reused or repurposed across multiple product cycles to reduce waste and extend resource value.

Challenges

Here are the main challenges facing sustainability in the semiconductor industry:

Resource usage intensity

Chip manufacturing requires vast amounts of energy, UPW, and specialty chemicals, which makes it difficult to balance production growth with sustainability goals. Companies must adopt energy-efficient equipment, increase water recycling efforts, and shift to low-impact process chemicals where possible.

Complex global supply chains

The semiconductor supply chain spans multiple countries and tiers, which can complicate efforts to monitor environmental impact, enforce standards, and ensure responsible sourcing. Implementing supplier sustainability audits, mandating ESG reporting, and using traceability tools to track impact can promote accountability and drive improvements in environmental and social performance across the supply chain.

Upgrading facilities

Retrofitting existing fabs with greener technologies is costly and technically challenging, especially given the precision and scale required in semiconductor production. Companies can phase retrofits during scheduled maintenance, seek public–private funding partnerships, and prioritize high-impact upgrades like energy-efficient HVAC systems and low-emission production tools to minimize disruption while accelerating sustainability gains.