Insufficient access to renewable energy in their home markets has put Asia’s biggest chipmakers behind their US and European competitors in the race to reduce carbon emissions. Taiwan Semiconductor Manufacturing (TSMC) and Samsung Electronics are struggling to shrink their domestic carbon footprints due to Taiwan’s slow development of renewable energy. TSMC Chair Mark Liu admitted that Taiwan does not have enough green energy for the company to use, unlike their overseas sites in the US and China which have already transitioned to fully using green energy. This is a concern for the industry as the push to adopt renewable energy has intensified globally. The limited sources of renewable energy in Taiwan, Japan, and South Korea could result in chips produced in Asia being less environmentally friendly than those produced in the US and Europe, which is becoming a growing concern for customers. There is a growing demand for wafers produced with green energy, and companies that cannot meet this demand may lose out on future orders. However, sourcing enough renewable energy in these Asian countries is challenging due to limited access to land or roof space for solar farms and difficulties in procuring renewable energy from other countries. TSMC, Samsung, and SK Hynix have pledged to use 100% renewable energy for global operations by 2050, but their targets are later than those of their US and European counterparts. The shortage of renewable energy could affect the chipmakers’ roadmaps for reaching net-zero emissions. Taiwan and South Korea primarily rely on coal, oil, natural gas, and nuclear power for their energy needs, while renewables make up a small percentage. In contrast, the US and the EU have higher percentages of renewable energy in their energy mix. This situation may impact investment and jeopardize Asian suppliers’ orders from global clients like Apple, Google, and Microsoft, who are committed to using 100% renewable energy. The expansion of the renewable energy sector is not a priority for the South Korean government, leading to a limited supply of renewable energy for Korean companies. Furthermore, the fragmented nature of the Asia-Pacific region makes it challenging to create a unified market for renewable energy certificates, unlike the EU and the US. The executive vice-president of European chip tool maker ASML emphasized the importance of energy sourcing when selecting where to invest, stating that access to green energy has become a condition for running their business. The Asia-Pacific region needs to develop its renewable energy sector to remain competitive, which is crucial for the future growth of Taiwan’s tech industry.
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