SEMI Champions ESG in Taiwan’s Chipmaking Industry

As the climate crisis continues to impact people and communities across the globe, governments, civil society, and private industry are coming together to begin counteracting the worst effects of this phenomenon, as well as to bring countries closer to their future goals of achieving net-zero carbon emissions.

Originally posted on SEMI Blog

To aid in this collective response, Taiwan’s semiconductor industry, whose products power most of the world’s electronics, computers, mobile phones, and automobiles, has taken significant steps to shrink its carbon footprint and adopt Environmental, Social, and Governance (ESG) practices.

SEMI members like the Qualcomm, Taiwan Semiconductor Manufacturing Co. (TSMC), United Microelectronics Corp. (UMC), ASE Group, and Win Semiconductor, as well as multinational suppliers, including Merck, DuPont, and Applied Materials, have all begun making big adjustments to their Taiwan operations. Their goal is to ensure that the production of this core technology enabler is in line with international trends in sustainability and environmental protection, thereby making themselves and their industry more resilient to the huge changes taking place in business globally.

In order to support, facilitate, and make these efforts more impactful, global semiconductor industry organization SEMI has begun taking its longstanding commitment to promoting industry-wide environmental, health, and safety (EHS) guidelines to the next level.

“As SEMI faces increasing demand from our members and stakeholders to share how the industry is committing to sustainable business operations, we are proud to advance our new ESG initiatives,” says Terry Tsao, Global Chief Marketing Officer and President of Taiwan, SEMI. Among these are new SEMI Standards aimed at helping its members achieve their sustainability goals.

Terry Tsao, Global Chief Marketing Officer and President of Taiwan, SEMI

“For example, SEMI International Standards S23 and S29 codify performance-based guidelines for semiconductor manufacturing equipment targeting reduction in energy use and greenhouse gas emissions,” says Tsao.

In addition, SEMI X TSMC “TSMC 1-Day Green Project: Green Manufacturing Solution Search” saw the association assist Taiwan’s chipmaking giant with finding supply chain partners with novel green manufacturing solutions. SEMI brought in more than 30 companies to meet with TSMC and introduce their technologies aimed at recycling and conserving energy and other resources.

This year, the SEMI ESG and Sustainable Manufacturing Summit, one of the significant events taking place prior to SEMICON Taiwan 2021, will be held from October 6-8. At the summit, SEMI will share its roadmap for and technological development in the areas of energy management, zero waste, net-zero emissions, circular economy, and green manufacturing.

Tsao notes that SEMI’s efforts have not been confined to semiconductor-related companies. “We try to include the majority of stakeholders in our work,” he says. “Ultimately, we can make an impact on adjacent industries like flat panel display manufacturers, PC makers, and others.” For Tsao and SEMI, it is important for as much of the tech ecosystem to be involved in the shift toward sustainable production as possible.

SEMI’s members also see the value in aligning the other actors in their sphere on their ESG goals. In July last year, TSMC became the first semiconductor company to join RE100, a global initiative in which participants publicly commit to 100% renewable energy usage by 2050. The following month, the company signed the world’s  largest corporate power purchase agreement with Ørsted, putting TSMC well on the way toward achieving its renewable energy goals. However, another part of its commitment under RE100 entails including carbon footprint and carbon reduction criteria in its supply chain management and procurement practices and requiring that its supply chain cut emissions by 20% by 2030.

“More semiconductor companies are factoring environmental sustainability into their purchasing decisions as a way to urge suppliers to better manage their power usage and join the green energy movement,” says Tsao. “By doing so, they are taking an important step toward curbing the unavoidable consequences of climate change.”

The hard work is starting to pay off. Several of SEMI’s most prominent member companies have been included in the Dow Jones Sustainability Index, which tracks the world’s leading businesses based on economic, environmental, and social criteria. Last year, local foundry Win Semiconductor was added to the index for the first time, a recognition of its efforts to reduce energy and water consumption, as well as limit its greenhouse gas emissions and mitigate air pollution.

Looking to the future, Tsao says that SEMI will continue working with member companies and like-minded organizations to promote ESG practices in the semiconductor industry. He also hopes to strengthen cooperation with the U.S., highlighting the interdependence of the U.S.-Taiwan semiconductor supply chain.

Recently, Tsao was invited to participate along with several other Taiwan business leaders in a virtual meeting with the U.S. Environmental Protection Agency, during which he described some of the Taiwan semiconductor industry’s carbon reduction achievements and emphasized the need for the U.S. and Taiwan to work together on this vitally important area.

“These two partners share a common goal of net-zero carbon emissions by 2050,” he says. “It will take collaborative efforts to realize it.”