The Role of Semiconductors in the Renewable Energy Transition

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Will the environmental cost of semiconductor production be offset by their contribution to the long-term green transition? Semiconductors facilitate the transition toward a decarbonised economy. Yet, the chip industry must build sustainability into its manufacturing processes to align with a net zero future.

earth.org/, Oct. 06, 2022 – 

Semiconductors are the basic building blocks of modern computing. They are vital components of all electronic systems, from smartphones to cars. But the environmental cost of manufacturing them is becoming increasingly problematic. Energy demand is rising as chip design grows more intricate, with the manufacturing of advanced 3nm chips (N3) predicted to consume up to 7.7 billion kilowatt-hours annually.

Paradoxically, semiconductors also facilitate the transition toward a green economy. Decarbonisation efforts will increase the usage of renewable energy and electric vehicles around the world, driving demand for chips. The number of power semiconductors used in the global renewable energy market is expected to grow with a compound annual growth rate (CAGR) of 8% to 10% from now to 2027.

Vital Components of the Green Transition

While their manufacturing process can adversely impact the environment, semiconductors play a fundamental role in the development of green technologies. They harness, convert, transfer and store renewable energy as electricity and subsequently move it onto the electric grid with minimal loss of power. Semiconductors also enable responsive and efficient use of electricity through IoT technology, ensuring supply is matched to demand and current is well-distributed. Both solar panel systems and wind turbines are highly dependent on semiconductor technology.

Semiconductors are also necessary for producing electric vehicles (EVs) and charging stations. On average, electric cars have about 2,000 chips, roughly double the number of chips in a non-electric car. As the nervous system of electronic materials, chips drive innovation in the automobile industry. They allow vehicles to become smarter and safer by controlling every feature from breaks to parking cameras. EVs have become a significant growth sector for the semiconductor industry. In 2020, the global stock of electric cars reached 10 million vehicles, a 43% increase over 2019. The boost in consumer demand for EVs has been driven by several factors, including government incentives, regulatory policies, and improvements in semiconductor design which have increased battery life and lowered the cost of vehicles.

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