Taiwan semiconductor manufacturer sets ambitious targets for climate action whilst maintaining technological leadership in global chip production
Semiconductor manufacturing ranks among the most energy-intensive industrial processes in the technology sector, with major fabrication plants consuming as much electricity as small cities. As global demand for advanced chips continues to surge amid AI development and digital transformation initiatives, the industry faces mounting pressure to address its environmental footprint. The challenge is particularly acute for foundries like TSMC, which produces approximately 60% of the world’s contract-manufactured chips.
TSMC has marked Earth Day (22nd April) by announcing its formal commitment to the Science Based Targets Initiative (SBTi), revealing a comprehensive roadmap for carbon reduction across its operations and supply chain.
The Taiwanese semiconductor giant, which produces chips for numerous technology firms worldwide, has established concrete emissions targets and implemented programmes to achieve them. The announcement comes at a time when technology firms face mounting pressure to address their environmental impact, particularly in energy-intensive sectors such as semiconductor manufacturing.
TSMC carbon reduction pathway includes measurable targets for emissions reduction by 2030
The company says it has established a structured approach to emissions reduction, with several milestone targets. These include peaking carbon emissions in 2025, returning to 2020 emission levels by 2030, achieving 60% renewable energy for global operations by 2030, reaching 100% renewable energy by 2040 and becoming net-zero by 2050.
TSMC will measure its progress against a 2025 baseline, with commitments to absolute reductions across Scope 1, 2 and 3 emissions in accordance with the SBTi Corporate Net-Zero Standard.
UNDERSTANDING EMISSIONS SCOPES
Scope 1 emissions: Direct greenhouse gas emissions from sources owned or controlled by a company, such as manufacturing processes, on-site fuel combustion and company vehicles.
Scope 2 emissions: Indirect emissions from purchased electricity, steam, heating and cooling consumed by the company but generated elsewhere.
Scope 3 emissions: All other indirect emissions that occur in a company's value chain, including both upstream activities (suppliers, raw materials) and downstream activities (distribution, product use, disposal).
“Corporate engagement is one of the key drivers of change in the global pursuit of environmental commitments and low-carbon transformation,” states Dr. C.C. Wei, TSMC Chairman and CEO and ESG Steering Committee Chairman. “TSMC works closely with our supply chain partners and stakeholders to advance green initiatives and develop innovative energy-saving and carbon reduction technologies to achieve net-zero emissions. We are committed to setting ambitious goals and taking action to strive for a sustainable future.”
The company has already made progress in several areas. For Scope 1 emissions, which cover direct greenhouse gas outputs, TSMC has implemented local scrubbers and begun using carbon-neutral natural gas. The firm has received 53 LEED Gold or higher certifications as of April 2025, which it reports makes it the leader in the semiconductor industry by certified building area. Its non-Taiwan operations have achieved net-zero for Scope 1 and 2 emissions since 2022.
TSMC renewable energy adoption accelerated through supply chain partnership programmes and infrastructure investments
For Scope 2 emissions, which relate to purchased electricity and energy, TSMC was the first semiconductor firm to join the RE100 initiative, committing to 100% renewable energy. In 2023, the company moved its RE100 target forward from 2050 to 2040. Current renewable energy usage exceeded 14% in 2024, with 100% renewable energy already achieved for global offices and overseas sites.
The company has taken an innovative approach to Scope 3 emissions, which cover its value chain. This includes creating a 20-year joint procurement agreement for 20,000 GWh of renewable energy, which provides stable pricing for suppliers and subsidiaries whilst reducing barriers to adoption. In 2024, TSMC launched a carbon reduction subsidy for Tier-1 raw material suppliers in Taiwan to upgrade equipment, with a projected reduction of 450,000 metric tonnes of carbon emissions.
TSMC has also introduced the Greenhouse Gas Reduction, Emissions Elimination & Neutrality (GREEN) Agreement, which suppliers will begin signing in 2025. More than 50 suppliers representing approximately 90% of TSMC’s supply chain emissions have already committed. The agreement requires suppliers to reach 85% renewable energy for production in Taiwan and 100% for overseas production by 2030, plus adopt Science-Based Targets by 2035.
TSMC semiconductor technology delivers environmental benefits through improved energy efficiency in computing applications
The company points to research from the Industrial Technology Research Institute indicating that each kilowatt-hour of electricity used in TSMC's production of high-performance computing chips saves 6.8 kilowatt-hours globally through improved energy efficiency in technology applications.
TSMC’s environmental programmes operate under its established ESG and Environmental Protection policies. The company conducts annual reviews of its targets and progress, which it uses to adjust its carbon reduction pathway.
“TSMC dynamically adjusts or sets more aggressive carbon reduction paths by annually reviewing target achievement, proactively addressing climate change challenges,” says Dr. Wei.
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