TSMC’s $100B US investment sparks concerns over reliance on fossil fuels

SEATTLE (Traditional Puget Sound Salish and Duwamish Lands) — Taiwan Semiconductor Manufacturing Company (TSMC) announced yesterday a $100 billion investment to build five new chip fabrication facilities in the United States, adding to its ongoing $65 billion project for three semiconductor fabs in Arizona, but environmental advocacy group Stand.earth warns that the resulting spike in electricity demand is likely to exacerbate the reliance on fossil fuels, undermining both local and national climate targets.

The semiconductor industry, with its energy-intensive factories, occupies a critical position within the IT sector’s supply chain, which is already responsible for 4% of global greenhouse gas (GHG) emissions. Without significant investment in new and local renewable electricity to match this demand, TSMC’s plans risk increasing fossil fuel reliance and delaying the clean energy transition in regions like Arizona, where renewable energy accounts for only 16% of the electricity mix, according to the U.S. Energy Information Administration (EIA).

“The TSMC announcement highlights the need for clear accountability in renewable energy commitments, because expanded fossil fuel infrastructure to meet unprecedented electricity demand will lock in decades of carbon pollution. This is a critical moment for TSMC to demonstrate real climate leadership, and their energy procurement should include adding more renewable energy to the grid. We should expect a company investing billions of dollars to live up to that leadership,” said Xixi Zhang, research specialist with Stand.earth Research Group.

TSMC’s new and existing facilities in Arizona are expected to consume energy comparable to the annual electricity demand of hundreds of thousands of homes. Without new renewable energy power purchase agreements, this increase in demand is likely to justify utility investments in new fracked gas-fired power plants and prolong the operation of coal-fired power plants, compounding air pollution and climate risks.

Despite public commitments to sustainability, there is no evidence that TSMC has signed direct renewable energy contracts in Arizona, and instead relies on unbundled renewable energy certificates (RECs), which are widely regarded as ineffective in increasing renewable electricity supply, and do little to reduce the operational carbon footprint.

Stand.earth’s analysis published just last year underscores critical gaps in TSMC’s approach to renewable energy:

• Electricity demands: The rapid scaling of TSMC’s U.S. operations is projected to drive unprecedented electricity consumption that will increase fossil fuel use without significant new renewable energy commitments.
• Outdated strategies: Unlike Apple and Google, which align growth with investments in local renewable energy projects, TSMC continues to rely on unbundled RECs as a stopgap solution.
• Community impacts: The expansion of fossil fuel infrastructure in Arizona and other states threatens local public health and undermines federal and state climate objectives.

“This investment represents an incredible opportunity for TSMC to lead the semiconductor industry toward a more sustainable future. By committing to renewable energy expansion and real climate accountability, TSMC can ensure that its growth does not come at the cost of our planet’s future,” said Zhang.

Stand.earth calls on TSMC to adopt renewable energy procurement strategies that add new clean energy to the grid, and urges TSMC and other semiconductor companies to align their operations with decarbonization policies and strengthen transparency in energy use reporting.

###

Media Contact: Shane Reese Corporate Campaigns Media Director shane.reese@stand.earth +1 919 339 3785 (Eastern Time)