by John Wei and Blair Georgakas

The resource demands of high-performance computing for the AI era are reinforcing the semiconductor industry’s need to act as environmental stewards. According to the Energy Information Administration, U.S. data centers are projected to consume 6.6% of the country's total electricity by 2028, which is more than double the 3% recorded in 2024^[1]. The very manufacturing infrastructure that enables these breakthrough technologies and improves the lives of millions is itself consuming more energy, water and materials while generating emissions through industrial processes and rising electricity use. These environmental factors have motivated the chip sector’s largest manufacturers to establish long-term sustainability goals and invest heavily in technology innovations to meet these challenges.

Startups for Sustainable Semiconductors

Recognizing that these sustainability goals could not be achieved through incremental improvements alone, a group of corporate venture investors from the top-tier semiconductor companies devised a grassroots initiative: the Startups for Sustainable Semiconductors (S3) pitch event in collaboration with SEMI. The mission of S3 is to bring sustainability-related innovations to semiconductor operations through mentoring, pitch-development and customer access.

Since its inception in 2021, S3 has vetted more than 150 unique startup teams, leading to eight direct VC investments and 34 first-of-their-kind proofs of concept. Seven of the participating startups successfully scaled their technology into initial production at semiconductor manufacturing sites in areas such as water, energy usage and emissions mitigation.

Breaking the Barrier to Entry for Sustainable Startups

For advanced semiconductor manufacturing, there is no “one-size-fits-all” approach. This creates a relatively high barrier to entry for startups seeking to help chipmakers curb the environmental effects of industrial manufacturing.

The sheer complexity of chip production is daunting – a single device requires more than 300 individual process steps. Only a handful of the largest companies have the ability to produce these complex chips at high volume. This global consolidation has created technology islands of IP and design know-how where one company’s challenges require bespoke solutions that are not easily addressed by outside innovators. And because semiconductor manufacturing is highly proprietary, it requires a degree of data privacy and security that typically precludes chipmakers from openly discussing their production processes.

A vital component of the S3 program is the mentoring sessions offered to the semifinalists with the intention of helping startups break into the semiconductor industry. Corporate investors and technology experts are paired with startups to provide guidance on semiconductor-specific technical challenges, whether they’re focused on water reclamation, emission abatement or PFAS destruction technologies. 

Finding the Right Technology Innovations

Each year, three categories are chosen to reflect the most up-to-date thinking of where and how the semiconductor industry needs to tackle sustainability. While water, energy, and materials have consistently been areas of focus, now in its fourth year, the original semiconductor manufacturing topics propagated by S3 have expanded to include GenAI and datacenter sustainability, reflecting downstream pressures to reduce energy footprint for AI-powered solutions with topics: