A recent report by PwC warns that climate change could disrupt nearly a third of the world’s semiconductor supply by 2035, posing significant risks to the global tech industry. The semiconductor supply chain relies heavily on copper, which is often mined in regions facing severe water stress.
Key Findings
– *Water Stress Risks*: 32% of global semiconductor production will be reliant on copper supplies at risk of water shortages over the next decade.
– *Regional Vulnerabilities*: Chile, China, Brazil, Mexico, and Australia are among the key markets that supply the semiconductor industry with copper materials and face drought risks.
– *Disruption Consequences*: Semiconductor manufacturing facilities in water-stressed regions may need to halt production, leading to supply chain disruptions and economic losses.
Impact on Semiconductor Production
– *40% of existing facilities*: Will be in watersheds projected to experience high or extremely high water stress between 2030 and 2040.
– *24-40% of new facilities*: Planned or under construction are in regions expected to face severe water stress, potentially exacerbating supply chain vulnerabilities.
Industry Response
– *Water Conservation Efforts*: Companies like TSMC are implementing water-saving measures, such as recycling water and investing in desalination plants.
– *Diversifying Supply Chains*: Industry leaders are exploring ways to reduce reliance on water-stressed regions and build more resilient supply chains.
– *Sustainable Practices*: Adopting green technologies and sustainable resource management can help mitigate climate-related risks.
Expert Insights
Glenn Burm, Global
Semiconductors Leader at PwC South Korea, emphasizes the need for concerted efforts from industry and governments to mitigate climate-related risks. “Semiconductors are the hidden lifeblood of modern technology… Disruption to supply chains could prove disastrous for the global tech industry.”
Conclusion
The semiconductor industry faces significant challenges in addressing climate-related risks. By adopting sustainable practices, diversifying supply chains, and investing in water conservation efforts, companies can build resilience and ensure a stable supply of semiconductors.
