The Path to Sustainability in the Semiconductor Value Chain – Can Startups Help?

By Jennifer Ard, Alexandra Farmer, Tobias Egle and Sarah Luppino

In an era of relentless technological advancement, the semiconductor value chain now stands at a crossroads. Semiconductors are essential to virtually all modern electronics, yet their production has a substantial environmental footprint. The push towards sustainability is a critical step towards scaling the semiconductor market amid widespread ecological concerns, changing regulations, and shifting consumer expectations.

Major corporations are already setting examples by integrating environmental considerations into every step of their supply chain.

A global startup mentorship program exclusively for sustainability impact in the semiconductor value chain

To help accelerate additional innovation, more than 10 Corporate Venture Capital (CVC) firms from the semiconductor ecosystem have come together to establish Startups for Sustainable Semiconductors (S3), a program for startup companies with sustainable innovations that can help advance the semiconductor industry in its journey to become greener. The program offers participants mentorship and coaching to help them work with the semiconductor industry. S3 was started in 2021 and will kick off its Year 3 effort in January 2024.

“Often, the semiconductor space can be intimidating to startups,” explains Jennifer Ard of Intel Capital. Tobias Egle of M Ventures adds that “this program aims to demystify and provide advice on how to tailor their products to best meet the needs of the industry.”

In addition, the S3 program seeks to open doors for potential proof-of-concept and pilot partnerships through close engagement with the CVCs and their corporate parents. The application process involves careful selection, mentorship, and pitching opportunities for finalists at SEMICON West, a major semiconductor industry exhibition and conference.

The pressing need for environmental responsibility

As climate change becomes an ever-pressing issue, companies in the semiconductor supply chain are feeling the heat from governments, investors, and consumers alike. Regulations like the European Union’s RoHS and REACH are reshaping the industry’s approach to production and mandating reductions in hazardous substances and better waste management. Moreover, growing demand for advanced technologies like AI, IoT, and 5G is driving demand for more efficient and environmentally friendly semiconductors that are increasingly finding their ways into landfills at end of life.

Semiconductor manufacturing is a resource-intensive process, marked by high energy and water consumption and significant greenhouse gas emissions. Consider these staggering figures: in 2019, the global chip industry used about 1 trillion liters of water, most of it in the manufacturing process. Despite this high level of consumption, some companies have been able to demonstrate its reuse: Intel, for instance, managed to recycle over 80% of the 16 billion gallons the company used in 2021.

Yet, it's not just about water. Emissions of process gases, particularly perfluorocarbons and sulfur hexafluoride – both with high global warming potential – is another critical concern. Additionally, the equipment and other process steps used in semiconductor manufacturing continue to increase in energy required to operate as the processes become more sophisticated.

Efforts to curtail environmental impact

Our industry is making positive strides in reducing water usage, with some companies cutting usage up to 98% by switching to more efficient systems. However, challenges remain in managing chemical waste and PFAS contamination, for which the EU has proposed regulations for a gradual phase-out of these materials by 2025-2026. Many startups are focused on products to curtail environmental impact.

The goal of achieving net-zero carbon emissions by 2050 is daunting. Fabs need to aggressively reduce direct emissions from their facilities and emissions from purchased electricity. This involves cutting process gas emissions – which contributed 80% of semiconductor industry Scope 1 emissions in 2020 – and increasing the use of renewable energy.

Furthermore, the semiconductor value chain is a voracious consumer of energy, an area ripe with startup solutions not focused on our sector. For perspective, semiconductor fabs can consume as much energy as over 80,000 North American homes per hour. While companies like Intel and Micron have made strides in using renewable energy, non-renewable sources across major players dominated the overall energy mix in 2022.

Other companies like semiconductor materials supplier EMD Electronics, the electronics business of Merck KGaA, Darmstadt, Germany, have sought to expand their renewable energy coverage through virtual power purchase agreements, now at 90% purchased renewable electricity in the US. Reducing energy can have a significant impact and is immensely necessary.

An analysis by Deloitte predicts that the energy per US$ of revenue will decrease by about 15% until 2024 relative to 2020 numbers, mainly driven by an increased percentage of renewable energy used worldwide in the industry. While the chip industry has made progress on resource efficiency, further improvement is required to achieve industry net-zero goals.

Apply for CVC funding and help the chip industry become greener

Should startups be focusing on solutions for the semiconductor sector? Yes, is the simple answer. The S3 program committee has identified four categories where sustainable innovation is critical for the semiconductor value chain and customers abound: Water, Materials, Energy, and Emissions.

Any company that is developing technologies in any of these areas is encouraged to submit an application to the program. Applications are welcomed starting January 1, 2024. More details are available on SEMI's Startups for Sustainable Semiconductors webpage. Under the program, over the last two years more than 50 companies have received mentoring on the special needs of our sector and how to make their products more attractive to our investing programs.

About the Authors


Tobias Egle is an Associate with M Ventures located in their Boston offices and led S3 in their 2022-2023 efforts. He earned his Ph.D. from Harvard University in Materials Science.


Jennifer Ard is a Managing Director at Intel Capital and Head of Investment Operations. She has been with Intel Capital for over 12 years and focuses on investing in the Silicon domain, which includes the fund’s sustainability investments.

Alexandra Farmer is a Venture Capital Associate at Intel Capital based out of Austin Texas. She will lead S3’s 2024 efforts alongside Jennifer Ard.


Sarah Luppino is an Investor with M Ventures focused on investments in Frontier Tech, Sustainability and Electronics. She earned her Ph.D. from MIT in chemistry, and has previously worked as a business strategy consultant as well as in startups in the nanotechnology and energy and sustainability sectors.