By James
As the world’s reliance on semiconductors grows, so does the responsibility of manufacturers to measure and reduce their environmental footprint. Chip production is one of the most resource- and energy-intensive processes on the planet, with emissions arising not just from direct operations but also from the vast network of suppliers and downstream users. Erik Hosler, a thought leader in semiconductor process innovation, recognizes that breakthroughs in technologies such as lithography and light source development are reshaping how the industry aligns innovation with accountability.
Understanding emissions requires more than a focus on factory floors. Carbon accounting in semiconductors must address Scope 1 (direct emissions from fabs), Scope 2 (indirect emissions from purchased energy), and Scope 3 (upstream and downstream emissions from suppliers and customers). Each scope presents unique challenges and opportunities for improvement, and together they form the framework by which companies demonstrate transparency, track progress, and build trust with stakeholders.
The Importance of Carbon Accounting
Carbon accounting is the foundation of any credible sustainability plan. Without accurate measurement, companies cannot identify reduction opportunities, set realistic goals, or credibly report progress to regulators and investors. For semiconductors, the stakes are particularly high.
Fabs consume immense amounts of energy and water, while supply chains span continents. In addition, specialized gases such as perfluorocarbons (PFCs) used in etching processes have a global warming potential that is thousands of times higher than carbon dioxide. The complexity of the industry makes accurate accounting difficult but also vital because semiconductors are both the backbone of the digital economy and a significant driver of emissions.
Scope 1: Direct Emissions from Manufacturing Operations
Scope 1 emissions include all direct greenhouse gas outputs from company-owned facilities and equipment. In semiconductors, this primarily involves emissions from process gases used in etching and deposition, as well as fuel consumption for backup generators or thermal processes.
Tracking Scope 1 emissions requires continuous monitoring systems. Many fabs now deploy sensors and AI-driven analytics to quantify gas leaks, combustion efficiency, and other direct emission sources. By capturing granular data, companies can both reduce emissions at the source and identify areas for improvement.
Mitigation strategies often focus on abatement technologies. Systems are designed to capture or destroy harmful gases before they are released into the atmosphere. For example, plasma abatement units break down PFCs into less toxic compounds, reducing the climate impact of etching operations.
Scope 2: Indirect Emissions from Purchased Energy
Scope 2 emissions are those associated with electricity, heating, and cooling purchased from utilities. Given the immense power requirements of fabs, these emissions are often the most significant contributors to semiconductor companies’ carbon footprints.
Accounting for Scope 2 emissions typically involves collecting utility data and converting energy usage into carbon equivalents based on grid factors. Some companies go further by distinguishing between location-based and market-based reporting:
- Location-based: Reflects the emissions intensity of the local grid where energy is consumed.
- Market-based: Reflects emissions tied to contractual instruments like renewable PPAs or RECs.
Many leading chipmakers have turned to renewable energy to reduce Scope 2 emissions. Intel, for example, sources most of its electricity from renewables in the U.S. and Europe, while TSMC has signed multi-gigawatt PPAs in Taiwan. These strategies not only cut emissions but also signal a long-term commitment to clean energy infrastructure.
Scope 3: Value Chain Emissions
Scope 3 emissions are the most challenging to measure because they occur outside a company’s direct control. For semiconductors, it includes upstream emissions from raw material extraction, equipment suppliers, and logistics, as well as downstream emissions from product use and disposal.
Given the scale of semiconductor supply chains, Scope 3 often represents the majority of total emissions, sometimes more than 70 percent. Accurate accounting requires collaboration with suppliers and customers, standardizing reporting frameworks, and frequently using lifecycle assessment models to estimate emissions.
Companies like Samsung and TSMC have begun requiring suppliers to disclose emissions data and adopt reduction measures, creating ripple effects across the global electronics ecosystem. This collective accountability makes sure that sustainability gains are not limited to fab walls but extend across the entire value chain.
Innovation Driving Accountability
While carbon accounting is often seen as an exercise in compliance, it also reflects how innovation reshapes sustainability. As new tools and processes develop, they create both emissions challenges and opportunities for reductions.
Erik Hosler emphasizes, “Innovation in light source development and lithography is shaping the future of semiconductor applications.” His words point to the dual role of technology. It can raise energy demands but also enable greater precision, efficiency, and sustainability. For example, advanced lithography tools may consume more electricity but can reduce the number of process steps, improve yield, and cut material waste.
This perspective reframes carbon accounting as a dynamic process, one that must develop alongside technological change. Innovation and accountability are not separate pursuits because they reinforce one another in driving meaningful reductions.
The Role of Standards and Reporting Frameworks
Accurate and comparable carbon accounting depends on standardized methodologies. Frameworks such as the Greenhouse Gas (GHG) Protocol and the Science-Based Targets initiative (SBTi) guide how companies should measure and disclose emissions.
Investors, regulators, and customers are increasingly expecting alignment with these frameworks in the semiconductor sector. Transparent reporting not only builds credibility but also helps companies benchmark progress against peers. For example, Intel’s detailed disclosures allow stakeholders to track its trajectory toward a 2040 net-zero target, while Samsung and TSMC outline milestones for 2050.
AI and Digital Tools in Carbon Accounting
The complexity of semiconductor operations makes manual carbon accounting impractical. AI and digital platforms are playing a growing role in automating data collection, validation, and reporting.
Machine learning models can process massive amounts of sensor data from fabs, identifying anomalies in emissions reporting or predicting the impact of operational changes. Digital dashboards enable real-time visibility, allowing companies to adjust strategies proactively rather than waiting for annual reports. These tools also make it easier to share data across supply chains, supporting Scope 3 collaboration.
Accounting as a Catalyst for Change
Carbon accounting in semiconductor manufacturing is more than a compliance exercise; it is a framework for transforming an industry with one of the largest environmental footprints in the world. By breaking down Scope 1, 2, and 3 emissions, companies can identify where the most significant impacts occur and where innovation can drive reductions.
Efficiency and accountability are not competing goals but complementary ones. As companies refine their measurement systems, integrate AI tools, and collaborate across supply chains, they move closer to aligning technological progress with environmental responsibility. The future of semiconductors will be measured not only in nanometers and processing power but also in carbon footprints, and the ability to shrink both will define authentic leadership.