Building a Responsible Supply Chain

October 2022

As a key player in the global semiconductor supply chain, Taiwan Semiconductor is working with its partners to build a responsible supply chain and drive green manufacturing, aligning its core advantages with the U.N. Sustainable Development Goals.

Responsible Minerals Sourcing

For humanitarian purposes, and because of its code of societal ethics, Taiwan Semiconductor is fully committed to the responsible sourcing of minerals. It strives to purchase conflict-free minerals that have not been mined or extracted in conflict-zone areas and sold to perpetuate wars, fighting, or military conflicts.

The firm’s due diligence framework follows the Model Supply Chain Policy for a Responsible Global Supply Chain of Minerals from Conflict-Affected and High-Risk Areas published by the Organization for Economic Cooperation and Development. Taiwan Semiconductor is also a member of the Responsible Business Alliance and supports the Global Enabling-Sustainability Initiative.

The company requires suppliers to comply with its responsible minerals sourcing policy and to sign a statement of responsible minerals for products containing tantalum, tin, tungsten, and gold (3TG). It also requires suppliers to source from smelters or refineries validated under the Responsible Minerals Assurance Process.

Since 2017, Taiwan Semiconductor has also disclosed to its clients the source smelters for the cobalt used in its products. In 2021, it audited at least three suppliers of tantalum, tin, gold, and tungsten, ensuring that these suppliers formulate and implement conflict-free minerals management processes and conduct due diligence on their upstream suppliers. Taiwan Semiconductor’s due diligence over the past five years has found that its global supply chain has complied with its requirements for the use of conflict-free minerals and conflict-free smelters.

Sustainable Water Consumption

Taiwan Semiconductor has adopted the Alliance for Water Stewardship standard to strengthen the three major strategies of “managing water resource risks, developing diverse water sources, and developing preventive measures” to ensure sustainable action toward water recycling. Its strategic goal for 2030 is to reduce its unit water consumption, measured in terms of liters per 12-inch equivalent wafer mask layer, by 30 percent from the base year of 2010. In 2021, the firm reduced its unit water consumption by 14.9 percent, surpassing its target of 9 percent for the year. Its goal for 2022 is 16 percent.

The firm’s efforts in 2021 resulted in 2.48 million metric tons of additional water conservation. It achieved this by:

• Decreasing water discharge loss from the system
• Improving the water production rate of the system
• Reducing facility system water consumption
• Increasing wastewater recycling by facilities
  
  

Sustainable Electricity Usage

In 2021, Taiwan Semiconductor announced its Net Zero Emissions by 2050 target. It believes that expanding its use of renewable energy will be critical to achieving this target. By 2030, its goals are to have its energy purchases be:

• 25 percent from renewable energy for fabrication plants (fabs) and 100 percent renewable energy for non-fab facilities
• 40 percent renewable energy for all fab operation sites around the world
  
  

While Taiwan Semiconductor is still in the early stages of developing renewable energy, Taiwan Semiconductor in 2021 still managed to:

• Collaborate with more onshore wind farms, increasing renewable energy usage in Taiwan fabs from 250 gigawatt hours (GWh) to 660 GWh—a 160 percent yearly increase
• Sign a renewable energy purchase agreement for 0.3 GW, which can increase 750 GWh of green energy each year
• Sign, at the end of 2021, renewable energy purchase agreements for 1.6 GWh cumulatively, which will reduce approximately 2,600,000 metric tons of carbon emissions each year
• Achieve the target of using 100 percent renewable energy in its global offices
  
  

In 2021, Taiwan Semiconductor achieved zero carbon emissions from power consumption for the fourth consecutive year in its overseas subsidiaries—in countries such as the United States, Canada, Europe, China, Japan, and Korea. Additionally, by manufacturing energy-efficient leading-edge technologies, the company also helps the world reduce its overall power consumption from its use of electronic devices.

According to analysis from the Industry, Science, and Technology International Strategy Center of the Industrial Technology Research Institute, each kilowatt hour (kWh) that Taiwan Semiconductor devoted to production helped the world conserve four kWh of energy.¹

Addressing the Global Issue of Data Center Power Usage

Data centers at companies and organizations across the globe use massive amounts of energy. Taiwan Semiconductor’s energy-efficient and leading-edge technologies, which include both wafer process technologies and the firm’s 3DFabric^TM advanced packaging solutions, can help the chips that are used in data centers to be more energy-efficient and require less cooling, a process that can also consume a considerable amount of energy.

Sustainable Development Goals

The Sands Capital six investment criteria tend to lead us to businesses that are innovators or vital facilitators of change in industries undergoing significant transformation. Taiwan Semiconductor is one of many portfolio businesses that create impact by addressing at least one major social or environmental challenge identified by the United Nations Sustainable Development Goals (SDGs). The efforts by Taiwan Semiconductor described here support SDG 6, Clean Water and Sanitation; SDG 12, Responsible Consumption and Production; and SDG 13, Climate Action.