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How Applied Materials and Intel are helping chipmakers buy clean power

The Catalyze program, sponsored by Intel and Applied Materials and run by Schneider Electric, aims to accelerate renewable energy access across the global semiconductor supply chain.

Semiconductor manufacturing

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Thanks to hype over artificial intelligence, semiconductor companies are anticipating rapid growth over this decade — the market could double to $1 trillion by 2030

That prospect is exciting, but it’s also a big wake-up call for the sector. "The first thing we need to do is decouple our growth from our environmental impact," said Applied Materials CEO Gary Dickerson in July 2020, during the industry’s biggest conference. Applied Materials supplies manufacturing and design equipment used to produce virtually every chip on the market. "If we double or triple the size of our company, it would be irresponsible to double or triple our carbon footprint," he said.

To address that concern, Applied Materials has committed to cutting its Scope 1 and Scope 2 emissions in half by 2030 and also to reducing the Scope 3 "energy intensity" per wafer by 55 percent in the same timeframe. Essentially, it’s seeking to reduce the amount of energy used by the fabrication processes to produce chips, and that means convincing other companies to buy into its decarbonization agenda. 

Those goals motivated Applied Materials in July to step out as an inaugural sponsor, along with Intel, of a program aimed at accelerating renewable energy access across the global semiconductor supply chain. The program, called Catalyze and run by Schneider Electric, is providing suppliers with tools to decarbonize their operations. 

Making it easier to buy renewable electricity

Education is a big part of the effort but — like similar programs Schneider Electric runs for Walmart, PepsiCo and a group of pharmaceutical companies — another goal is to provide suppliers with the opportunity to participate in power purchase agreements (PPAs) negotiated on behalf of a group, not a single company. 

The initial focus will be on working with suppliers in North America and Europe where renewable energy is already readily available, even though the biggest opportunity for improving energy efficiency and clean power access lies in Southeast Asia, said Chris Librie, senior director of ESG at Applied Materials.

In those places, the purchasing signals provided by companies participating in the Catalyze effort could help inspire more options, Librie said. "By working together, we can accelerate grid decarbonization in some of these markets."

Ted Jeffries, senior director of supply chain responsibility for Intel, said the chipmaker is encouraging its suppliers to set net-zero or emissions reduction targets. Intel, for one, has committed to net-zero upstream Scope 3 emissions by 2050. Its goal with Catalyze is to reach as many suppliers as possible. "There are companies that have sophistication that don’t necessarily need a program like this," he said. "But this can help serve as an amalgamation for suppliers that are too small to enter the [PPA] market."

Semicon West

Intel and Applied Materials envision opportunities to extend their own resources by working collaboratively with suppliers they share. Key performance indicators to gauge success of the program will include the number of suppliers that join (the companies are targeting "thousands"), the spending they represent for each sponsor and the speed with which suppliers are able to reduce absolute emissions.

Danny Whigham, the energy, utilities and resources consulting leader at PwC, said the clean energy transition is driving many industries to consider supply chain programs of this nature. "Education is so important to ensure that all parties in the value chain can be successful and move at the same rate," he said.

Many energy companies and utilities are stepping out to facilitate this collaboration, Whigham added. 

"Now, supply chain value comes from balancing the level of risk with the cost of safeguarding your organization from future supply chain disruption, while being able to keep your commitments to supplying reliable, affordable, safe and clean energy," he said. "It’s about making a series of calculated choices about risk, cost and responsibility that can add up to increased resilience, growth and stakeholder trust."

What is your company doing to reduce emissions within its supply chain? Send tips and ideas to [email protected],

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