Winter 2024
The CHIPS and Science Act was created to combat the United States’ dependence on foreign production of vital semiconductors and promote industry growth, but there are challenges with expanding the industry in an environmentally responsible way.
Semiconductors, often referred to as “chips,” form the foundation of electronics and have driven the advances in computing, communications, healthcare, transportation, clean energy, and countless other applications that define our modern world. This industry is vital to the United States (US) economy, totaling more than $60 billion in semiconductor exports in 2022 (behind only oil, gas, and aircraft) and supporting more than 2 million American jobs. Despite a downturn in sales over the past year, the long-term outlook for these essential products, which provide impactful technology to practically all sectors of the economy, is strong. The industry remains poised to dominate the next decade in global business, with estimates of annual global sales projected to approach $1 trillion by 2030 (see Figure) (SIA, 2023a).
This industry is vital to the United States (US) economy, totaling more than $60 billion in semiconductor exports in 2022 (behind only oil, gas, and aircraft) and supporting more than 2 million American jobs.”
In response to concerns over US dependence on foreign manufacturers for the most advanced chips, the historic, bipartisan Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act was signed into law in August 2022. The law was designed to reinvigorate domestic semiconductor research and production, and, in turn, position the US for the reshoring of state-of-the-art chips production, maintaining competitiveness in the innovation of new technologies and applications, strengthening the supply chain, and protecting national security (NIST, 2022). The CHIPS and Science Act provides over $50 billion in federal funding, including: $39 billion in direct incentives for investing in the expansion and modernization of semiconductor manufacturing capabilities in the US (the act also establishes a 25% tax credit on capital expenditures to do the same, at an estimated benefit of about $24 billion); $13.2 billion for research and development and workforce training; and $500 million for strengthening global supply chains (NIST, 2023). The process for distributing these funds is already underway, with two Notices of Funding Opportunity (NOFOs) released in 2023.
Despite increasing demand for its products and substantial government support for its expansion, the US semiconductor industry faces challenges in environmentally responsible growth. The fabrication plants (fabs) where chips are made require huge amounts of energy and water to operate. To address this issue, some companies have set ambitious sustainability targets; for example, Intel’s sustainability target is to use 100% renewable energy by 2030 and reach net-zero greenhouse gas emissions by 2040 (McKinsey & Co. et al., 2022). In addition, companies applying for funding through the CHIPS and Science Act will need to address the potential environmental footprints of their proposed projects in accordance with the National Environmental Policy Act (NEPA), which requires federal agencies to assess the environmental impact of all major federal actions and involve the public in decision-making. To assist with this environmental review process, applicants must submit responses to an environmental questionnaire covering various topics about their proposed project, including resource consumption rates and effluent emissions streams, wastewater collection and treatment, permitting (e.g., under the Clean Water Act and Clean Air Act), hazardous or toxic substances, impacts to water quality and resources, air quality, greenhouse gases, environmental justice, vegetation and wildlife, endangered species, and wetlands. The NEPA review process for many projects funded by the CHIPS and Science Act also will likely include the preparation of environmental impact statements, which are subject to public review and comments; substantive comments and their required responses are considered in final decision-making (Jain and Chang, 2023).
Recent policies, proposals, and rules issued by the US Environmental Protection Agency (US EPA) under the Toxic Substances Control Act (TSCA), which regulates industrial chemicals in US commerce, have presented opportunities for collaborative efforts within the semiconductor industry.”
In order to meet market demands and produce more advanced chips, modernized and new fabs that are built in the coming years will rely on the use of finely tuned chemistries in their manufacturing processes. For example, the implementation of leading-edge extreme ultraviolet (EUV) lithography will require the commercial availability of chemicals capable of absorbing light at EUV wavelengths (around 13.5 nanometers [nm]). In addition, transitions to new, alternative chemistries may play a central role in reducing the environmental impacts of fabs. Recent policies, proposals, and rules issued by the US Environmental Protection Agency (US EPA) under the Toxic Substances Control Act (TSCA), which regulates industrial chemicals in US commerce, have presented opportunities for collaborative efforts within the semiconductor industry. These efforts have expedited the approval of new fine and specialty chemicals and facilitated communications with US EPA regarding the uniquely specialized practices of the industry, such as its critical and essential use of certain chemistries (e.g., per- and polyfluoroalkyl substances [PFAS]), its highly controlled manufacturing processes and automated equipment (i.e., tools), and its extensive use of industrial hygiene and control technologies that protect worker health and minimize environmental releases.
The passage of the CHIPS and Science Act may usher in a new era of semiconductor manufacturing in the US – an era that will require innovative, interdisciplinary, and collaborative strategies for ensuring compliance with environmental and chemical regulations. This broadened approach will build upon the robust one already undertaken by the industry, as it continues to develop the transformative technologies that have made a smarter and more connected world.
The author can be reached at cbutler@gradientcorp.com.
Jain, KK; Chang, HW. [US Dept. of Commerce, National Institute of Standards and Technology (NIST)]. 2023. “CHIPS for America: Overview of NEPA and environmental reviews.” 22p., March 21. Accessed on November 10, 2023, at https://www.nist.gov/system/files/documents/2023/04/20/3.18.23.
McKinsey & Co.; Burkacky, O; Goke, S; Nikolka, M; Patel, M; Spiller, P. 2022. “Sustainability in semiconductor operations: Toward net-zero production.” 8p., May. Accessed on November 10, 2023, at https://www.mckinsey.com/industries/semiconductors/our-insights/keeping-the-semiconductor-industry-on-the-path-to-net-zero.
Semiconductor Industry Association (SIA) (Washington, DC). 2023a. “2023 state of the U.S. semiconductor industry.” 28p. Accessed on November 10, 2023, at https://www.semiconductors.org/2023-state-of-the-u-s-semiconductor-industry/.
Semiconductor Industry Association (SIA) (Washington, DC). 2023b. “Worldwide market billings (in thousands of U.S. dollars) (three-month rolling averages (1976-2023).” September. Accessed on November 11, 2023, at https://www.semiconductors.org/resources/.
US Dept. of Commerce, National Institute of Standards and Technology (NIST). 2022. “A Strategy for the CHIPS for America Fund: Executive Summary.” 3p., September 6. Accessed on November 10, 2023, at https://www.nist.gov/system/files/documents/2022/09/06/CHIPS.
US Dept. of Commerce, National Institute of Standards and Technology (NIST). 2023. “Fact Sheet: CHIPS Program Office Launches Notice of Funding Opportunity.” 4p., February 28. Accessed on November 10, 2023, at https://www.nist.gov/system/files/documents/2023/02/28/CHIPS_NOFO-1_Fact_Sheet_0.pdf.