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Technical Insight

Magazine Feature
This article was originally featured in the edition:
2024 Issue 5

Sparking change in silicon semiconductor manufacturing with green energy


In the ever-evolving tech landscape, few industries rival the energy demands of silicon semiconductor manufacturing. These energy-intensive businesses are the backbone of modern electronics, powering everything from smartphones to supercomputers. However, this vital sector faces a pressing dilemma: the soaring costs of energy amidst a global climate crisis.


THE SEMICONDUCTOR INDUSTRY operates within a relentless energy consumption cycle, with dominant industry players consuming staggering amounts of power. Take Intel, for example. Its global energy use in 2022 amounted to 10.9 billion kilowatt hours. Nine billion of which marked electricity usage, reflecting how energy intensive the manufacturing of silicon chips is. As the price of energy has soared worldwide, the sector has faced eyewatering bills that have eaten into profits and in some cases, threatened the sustainability of their operations.

Compounding this challenge is the urgent need to decarbonise as governments worldwide implement stringent emissions reductions targets. With the manufacturing and production sector accounting for one-fifth of global carbon emissions, and with more than 80% of semiconductor industry emissions coming from the consumption of electricity, these companies are under mounting pressure to become more sustainable and transition to cleaner sources of energy.

A pathway to decarbonisation and profitability
Some of the biggest industry players have already taken strides towards making their operations more sustainable. Samsung, for example, announced its environmental strategy in 2022, where it pledged to join the global fight against climate change and achieve net zero emissions by 2050.

Despite these efforts, there’s still a lot more that needs to be done. Semiconductor emissions are forecasted to overshoot the carbon budget for the 1.5C pathway by 3.5 times, and the industry is predicted to fall short of net zero targets. There’s a real need to accelerate sector-wide progress towards decarbonisation to ensure the viability of the semiconductor industry.

Decarbonising a business might seem like a complex ordeal. However, there is an attractive option that silicon semiconductor manufacturers have at their disposal – switching to renewable energy to power their operations. Not only does this align with global sustainability goals and targets, but it also offers other tangible benefits, including reduced operational costs, enhanced operational resilience and lower carbon footprints.

Business’s that use clean energy from solar panels, wind turbines or other renewable sources free themselves from the volatility of the global energy market and benefit from more stable and predictable sources of power. And, as renewable energy is cheaper than fossil fuel alternatives, it can significantly slash a businesses’ energy bills.

Behind-the-meter generation: a pioneering solution

Despite the clear benefits, many companies remain unaware of the feasibility of this transition. Instead, they remain locked into costly contracts with grid-dependent energy suppliers, perceiving renewable energy as an inaccessible luxury.

However, renewable energy has become increasingly accessible for businesses through ‘behind-the-meter’ generation. This usually involves a partnership between a business and a clean energy developer, who identifies the most effective method for generating renewable energy. This is typically through installing solar panels or wind turbines on the manufacturer’s premises or in a field nearby. The power that is generated by the renewable energy source is fed directly to the business, avoiding many of the third-party costs and other charges that are normally added to an energy bill.

This approach has already been adopted by Samsung Semiconductor as part of its environmental strategy, which pledges a transition to 100% renewable energy-based electricity across all its global business sites by 2050. Since 2020, its US and Chinese business sites have been powered by clean energy through installing large-scale renewable facilities.

In the case of Balance Power, we help energy-intensive businesses, including manufacturers, identify the right solution for their specific size and needs, before financing and building a renewable energy project. So, all they need to do is buy the energy they use – it’s that simple.

Strategically positioning renewable energy projects near semiconductor facilities offers a compelling alternative to traditional grid-based power sources. Not only does it represent a cleaner and more autonomous energy option, but it also promises substantial cost savings, easing the financial strain on businesses while reducing their carbon footprints. Plus, behind-the-meter generation doesn’t rely on a one-size-fits all approach. It can be customised to suit each company’s unique energy requirements and constraints, from the largest manufacturers like Samsung Semiconductor to those who operate on a smaller scale. These renewable energy projects are designed to seamlessly integrate into existing operations, putting cheaper and cleaner energy sources within reach.

The way to a greener future
As the semiconductor industry navigates the complex intersection of energy demand, sustainability, and profitability, the case for adopting renewable energy grows ever more compelling.
Paradoxically, semiconductors themselves play a key role in facilitating the transition towards a decarbonised economy, with the increased use of electric vehicles and renewable energy technology driving demand for chips. But it’s crucial for the industry to build sustainability into its manufacturing processes to properly support a net zero future.

By adopting renewable energy, silicon semiconductor manufacturers not only reduce their environmental impact but also bolster their bottom line, enhance their competitiveness and future-proof their business.

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