Clean Clicks or Dirty Chips?

Semiconductors have spread into seemingly every corner of daily life in the Western world today, from smartphones, appliances and automobiles, to the rapid rise of AI tools and platforms. Growing concerns over semiconductor supply chain security in combination with the passage of the $53 billion US CHIPS & Science Act has triggered a wave of major new semiconductor manufacturing investments in the US.

The shift of semiconductor manufacturing to the U.S. should present a unique opportunity for the IT sector to transition a critical piece of its supply chain to renewable energy, and for semiconductor manufacturers and their host communities to secure a long term competitive advantage in a world that is racing to move beyond fossil fuels.

Key Findings:

• New semiconductor factories currently under construction by the four largest semiconductor manufacturers – Intel, TSMC, Samsung, and Micron – are expected to generate approximately 2.1 gigawatts in new electricity demand, more than double the annual electricity consumption of the City of Seattle.
• Unlike Apple, Google, and Meta – all companies that have met their 100% renewable energy commitments by bringing new renewable energy projects online to match their rapidly rising electricity demand, despite having made public commitments to be 100% renewably powered, Intel, TSMC, Samsung, and Micron have thus far failed to secure additional renewable energy supply to meet their existing and future electricity demand in the U.S., relying instead on the purchase of unbundled renewable energy credits.
• Intel and TSMC are building four new semiconductor factories in Arizona that are expected to consume as much electricity as 260,000 homes9 but have failed to sign renewable power agreements for their massive new factories in Arizona, enabling local utilities to justify both a significant expansion in new fracked gas fired power plants and a delay in the retirement of coal fired power plants, over the strong objections of local communities.
• Unless the renewable energy purchasing strategy of the semiconductor industry is shifted to focus on adding new renewable energy to the local grid, their ongoing expansion threatens to increase investment and demand for fossil fuels in multiple U.S. states, and undermine federal and state targets to transition to zero emission electricity generation.
• Due to significant weaknesses in the current reporting standards for greenhouse gas emissions, companies with 100% renewable energy or Net Zero commitments are able to use the purchase unbundled RECs to mask a significant increase in its greenhouse gas pollution and related fossil fuel consumption. Intel, who has been one of the largest corporate purchasers of unbundled RECs in the United States over a decade, has used its purchase of unbundled RECs to report a dramatic reduction in their GHG emissions from electricity, claiming that all of its facilities in the US and EU have zero emissions associated with electricity consumption.