ESG Semiconductor Industries

By Charlie Lin

Marketing Specialist, Investments

Semiconductor Private Companies

A growing number of semiconductor companies are using private equity to raise money for R&D and sophisticated manufacturing. Important strategies include private placements, in which companies sell shares to qualified investors directly, allowing for a sizable inflow of cash free from the restrictions of open markets. For semiconductor companies, Regulation D SEC fundraising provides an alluring structure that enables them to raise significant funds while complying with regulations. Additionally, crowdfunding platforms are becoming more popular, especially for cutting-edge semiconductor technology in industries like artificial intelligence. These platforms allow smaller investors to participate in high-potential initiatives. Because they have a stake in chip innovation, strategic investors, like those in the tech and automotive sectors, are essential partners. Institutional investors continue to be major participants, frequently attracted by the industry's potential for expansion driven by the rising need for microchips. In order to fulfill global demand, semiconductor businesses are speeding up their research pipelines and scaling manufacturing by emphasizing private equity partnerships and diversifying their funding options.

ESG in the Semiconductor Industry

Prominent semiconductor firms, such as Texas Instruments (TI), Samsung Electronics, and Micron Technology, are employing creative approaches to meet investment policy requirements pertaining to Environmental, Social, and Governance (ESG). By embracing the concepts of the circular economy, such as recycling silicon and rare earth elements used in the production of semiconductors, Samsung is actively minimizing its environmental impact. Additionally, the business makes investments in low power semiconductors that improve consumer devices' energy efficiency and lower carbon emissions throughout supply chains, By using AI-driven manufacturing systems, Micron Technology aims to improve energy efficiency by maximizing resource use and reducing waste. Additionally, it has pledged to cut greenhouse gas emissions by 42% by 2030 in comparison to its baseline in 2020. Additionally, Micron is making sure that its fabrication operations run with almost nil water discharge by putting strict water stewardship procedures into place. Through its supply chain accountability initiatives, Texas Instruments (TI) prioritizes ethical governance and guarantees conflict-free mineral sourcing. In order to serve sectors like electric vehicles and renewable energy, the business is also making its semiconductor devices more energy efficient. To reach its carbon neutrality targets, TI follows Science-Based Targets (SBTi) and actively monitors its progress through CDP reports.

ESG investment opportunities in the semiconductor industry

Major advancements in Environmental Social Governance (ESG) practices are being made by prominent semiconductor businesses such as NVIDIA, TSMC, and Intel Corporation. Leading the charge, Intel has set ambitious targets to achieve net-zero greenhouse gas emissions by 2040. On a similar note, their 2030 RISE strategy aims to reduce Scope 3 emissions by using only renewable energy in all of their global manufacturing operations, improve product energy efficiency by 10x for Intel clients and server microprocessors, and achieve net positive water use by conserving 60 billion gallons of water. By using smart manufacturing technology and obtaining 25% of its electricity from renewable sources by 2030, Taiwan Semiconductor Manufacturing Company (TSMC) has made a concerted effort to lower its energy intensity. Similar to Intel, TSMC has pledged to run its global operations entirely on renewable energy by 2040. As for NVIDIA, it prides itself on reaching 76% renewable electricity and 60%+ on scope 3 category 1 emissions addressed in supplier agreements during fiscal year 2024. The company also focuses on the responsible sourcing of conflict-free minerals. By creating low-power semiconductor solutions for wearable technology and the Internet of Things, startups like Ambiq are also drawing attention and lowering energy usage in end-user applications. These businesses demonstrate the semiconductor sector's commitment to ESG by fusing sustainability and innovation for a more environmentally friendly future.