When this blog publishes it will have been about a month from Earth Day. Earth Day is typically filled with announcements about how semiconductor companies are addressing environmental issues. It also signals the beginning of the Environment, Social and Governance (ESG) reporting season that typically starts in the April time frame and runs through November. This year Intel got a bit of a head start on Earth Day by announcing its 2022 sustainability goals on April 13th. The headline reads:
Intel Commits to Net-Zero Greenhouse Gas Emissions in its Global Operations by 2040
With the Sub-heading: Intel’s plan sets goals for reducing value chain footprint and catalyzing industrywide action to address climate change
Intel has always been active in its supply chain due to its copy-exact manufacturing processes. The company understands its first-level vendors’ business extremely well and performs audits on the equipment and materials on a fairly frequent basis. It is also involved with its vendors’ vendors, and in necessary cases their vendors’ vendors’ vendors’ business if it is critical to the manufacturing process.
Intel also has an extremely long supply chain on the front end of its carbon footprint. One could argue it goes all the way to sand for silicon wafer manufacturing. And on the back-end, Intel has chips in most computing applications that it is attempting to account for in its downstream Scope 3 emissions. The graphic in Figure 1 gives some idea of the scope of Intel’s greenhouse gas footprint.
While Intel is active in making sure the changes to equipment and materials do not impact the manufacturing of the product, the company has also been active in working to get its vendors on board with Intel’s ESG goals.
As figure 2 illustrates in 2016 Intel requested its top-tier suppliers to begin submitting data to the CDP survey. While some of its suppliers, such as Lam Research and Applied Materials were already active in ESG reporting, the request by Intel raised the bar, and now all major suppliers to Intel and the semiconductor manufacturing industry are including scope 1 and 2 greenhouse gases in ESG goals, and most are either reporting or in the process of determining their scope 3 contributions, and the scope 3 data should publish in their 2021 EGG reporting results.
As a side note, one of the more disappointing aspects of the semiconductors ESG efforts is that there are still a few top suppliers and sub-suppliers that have not yet published their scope 3 emission data. I’m hopeful that they will publish in the upcoming 2021 reports. SEMI is also a bit behind the curve but is working rapidly to catch up to help its members both understand the issues surrounding the reporting of greenhouse gases, as well as how to implement procedures and processes to reduce greenhouse gases, as well as other environmental conservation elements.
Updating ESG Goals
One of the things I have appreciated about the semiconductor industry’s efforts around ESG reporting is that each year companies have been highlighting what they have accomplished, and then reset the goals to more aggressive targets.
According to the announcement, Intel has set the following interim milestones for 2030:
- Achieve 100% renewable electricity use across its global operations.
- Invest approximately $300 million in energy conservation at its facilities to achieve 4 billion cumulative kilowatt-hours of energy savings.
- Build new factories and facilities to meet U.S. Green Building Council® LEED® program standards, including recently announced investments in the U.S., Europe, and Asia.
- Launch a cross-industry R&D initiative to identify greener chemicals with lower global warming potential and to develop new abatement equipment.
While in the press release Intel did not highlight 2021 accomplishments, it will be interesting to see how much more renewable energy it was able to add, and what additional steps it has taken in conservation when its ESG report is published.
One of the key industry challenges is the last bullet point, where introducing greener chemicals, and determining new ways of abating, or even potentially recycling GHG chemicals and gasses is proposed. The challenge in the introduction of new chemistries and processes is the development and then the testing to ensure there is no impact on the final product. There is also the challenge of the economic impact on the end product. Will the new processes be able to keep chip manufacturing costs to be the same as existing processes?
Historically, changes in processes and chemistry were a result of reducing process costs, or a new technique was needed to advance chip technology. Will the end-user of the product be willing to pay for higher-priced chips in the name of reducing the world’s carbon footprint? There will also be the challenge with legacy fabs and chips. These chips are manufactured on narrow margins, and in some cases, the market is extremely competitive and based primarily on cost and availability. From one perspective, changes to reduce the environmental impact of chips will need to be an industry-wide effort and implemented across the entire chip industry, otherwise, there might be holdouts that will continue to produce chips without having reduced their environmental footprint.
Intel is also working intently on reducing its downstream GHG emissions. While with Moore’s Law you naturally get a power reduction every time you shrink, since 20nm the reduction has not been as significant as in previous generations. However, with the forecasted increase in the energy needed to support high-performance computing in server farms, it is critical to find new ways to reduce the energy consumed by the CPU. Intel’s goals to help downstream customers are rather significant as posted below.
What It Means for Intel’s Products
To support customer sustainability goals and reduce Scope 3 product-use greenhouse gas emissions, Intel will increase the energy efficiency of its products and continue to drive performance improvements to the market demands. Intel is setting a new goal to achieve 5X increase in performance per watt for its next-generation CPU-GPU, code-named Falcon Shores. The company remains committed to its 2030 goal to increase product energy efficiency by 10 X for client and server microprocessors.
To help customers achieve platform carbon reductions, Intel is extending innovation in:
- The layout, selection, and modularity of all internal components to reduce the size of mainboards.
- Continued increases in system energy efficiency and display efficiency to significantly reduce overall power consumption.
- The use of bio-based printed circuit boards to aid in the separation of materials and components when recycling, and to reduce overall electronic waste.
Intel has also set a new goal to lower emissions related to reference platform designs for client form factors by 30% or more by 2030. These efforts are taking shape with Dell’s Concept Luna prototype device, developed in partnership with Intel to showcase future possibilities for sustainable PC design.
Hopefully, other chip companies and then server companies can follow suit, and the industry can make a significant impact before 2040, and continue to demonstrate leadership in the reduction of GHG.
Probably my favorite statement in the release is that Intel will use credible carbon offsets to achieve its goal only if other options are exhausted. I believe that for the world to be successful in reaching GHG goals, conservation is key, combined with viable renewables. Over the next few years, with the number of companies vying for renewables and carbon credits to reach sustainability goals, there will be a significant shortage of both. Companies with deep pockets will be able to win the bidding war for renewable and carbon credits. This will leave smaller companies in a bind trying to meet GHG requirements as they cannot afford to purchase either. So, kudos to Intel for leaving carbon credits as a last resort. Let’s hope other companies further up the food chain can behave in a similar manner.