Sustainability in Semiconductor Manufacturing: A Joint EU–India Green-Tech Partnership
- News Desk
- Aug 5
- 5 min read
The semiconductor industry sits at the heart of the 21st-century digital economy, enabling everything from smartphones and electric vehicles to AI systems and quantum computing. However, behind its sleek, futuristic promise lies a complex manufacturing process that is resource-intensive, energy-demanding, and environmentally taxing. As climate concerns intensify and global competition over chip production rises, there is growing urgency to make the semiconductor sector more sustainable.
The article explores how the European Union and India, two regions with converging technological and environmental ambitions, can collaborate through the EU–India corridor to build a sustainable, low-carbon semiconductor ecosystem. With the EU’s regulatory strength and India’s rising manufacturing capacity, their partnership holds transformative potential for creating a greener global supply chain in chips.
The Sustainability Challenge in Semiconductor Manufacturing
Semiconductor manufacturing is among the most environmentally demanding industrial processes in the world. It requires vast amounts of ultra-pure water, consumes high levels of electricity, and generates significant carbon emissions and hazardous waste. According to the International Energy Agency (IEA), global data centers and semiconductor fabs together consume over 1% of the world’s electricity, most of it from fossil fuels.
Moreover, manufacturing one chip can require thousands of steps, each involving chemicals, etching gases, and ultraprecise equipment that generate emissions like perfluorocarbons (PFCs), which are potent greenhouse gases. With climate regulations tightening across the globe, the industry must now balance rapid growth with environmental responsibility.
India’s Semiconductor Vision and Green Potential
India, a late entrant to chip manufacturing, is positioning itself as a major player through the India Semiconductor Mission (ISM) and a ₹76,000 crore ($10 billion) incentive scheme launched in 2021. The country’s ambition is to become a trusted and diversified global chip hub, reducing overdependence on East Asia. Several projects including Tata Powerchip’s fab in Gujarat and Micron’s OSAT facility in Sanand are already underway.
What makes India particularly suited for green chip-making is its solar energy potential, fast-expanding renewable grid, and growing domestic policy focus on ESG (environmental, social, governance) compliance. India’s pledge to reach net zero by 2070, and initiatives such as PLI (Production-Linked Incentive) schemes for green electronics, align with EU environmental priorities.
However, India still faces challenges in water scarcity, e-waste management, and carbon-tracking infrastructure areas where the EU can offer technical expertise and policy guidance.
EU’s Green Deal and the Semiconductor Agenda
The European Union is emerging as a global leader in green regulation. Its European Green Deal aims to make the continent climate-neutral by 2050, and its EU Chips Act (2023) allocates €43 billion to increase domestic chip production while embedding sustainability into the value chain.
The EU emphasizes circular economy principles, cleaner manufacturing technologies, and resource-efficient supply chains. It is also deploying the Carbon Border Adjustment Mechanism (CBAM), which will impose carbon tariffs on imports that do not meet EU environmental standards including electronics and semiconductors.
This gives India a strong incentive to green its semiconductor industry if it wants to remain competitive in the EU market. Simultaneously, the EU requires low-cost, high-volume partners to diversify its chip supply. A joint green-tech approach offers mutual strategic value.
Opportunities for EU–India Green-Tech Collaboration
The evolving EU–India Trade and Technology Council (TTC) and Horizon Europe’s GANANA initiative offer structured platforms for joint R&D, technology transfer, and sustainability-driven industrial collaboration. Under these frameworks, the two partners can cooperate in:
Green Fabrication
The EU can help India adopt cleaner chip fabrication methods, such as dry etching, low-temperature deposition, and non-PFC alternatives. Belgium’s IMEC, a global R&D hub, could partner with Indian fabs to pilot energy- and water-efficient processes.
Water Recycling & E-Waste Management
Semiconductor fabs consume up to 10 million gallons of water daily. EU countries with mature water recycling policies (e.g., the Netherlands, Germany) can support India in developing fab-grade recycling systems and closed-loop cooling technologies. Similarly, EU firms can help set up reverse logistics systems for managing e-waste and toxic byproducts.
Green Certification & Carbon Audits
Harmonizing sustainability standards through mutual certification mechanisms can ensure that Indian fabs meet EU expectations. The development of common carbon auditing tools, shared sustainability benchmarks, and ESG compliance metrics will boost trust and market access.
Clean Energy Integration
The EU’s experience in grid-balancing and green hydrogen deployment can help India integrate renewables into chip fabs. Joint investments in solar-powered semiconductor parks or carbon-offset partnerships could be explored.
Case Studies and Global Best Practices
IMEC Belgium
IMEC’s R&D in reducing the environmental footprint of semiconductor production includes wafer reuse, energy-efficient lithography, and circular design approaches. Their global collaborations serve as a model for EU–India partnerships.
TSMC Taiwan
TSMC is investing heavily in water recycling and has committed to 100% renewable energy by 2050. Their experience proves that sustainability is feasible even at scale, albeit costly.
Applied Materials India
This American firm has operations in India focused on advanced chip design and is engaged in green R&D. They could be key players in an EU–India green semiconductor initiative.
Challenges and Limitations
While promising, EU–India cooperation faces practical hurdles:
Cost vs. Compliance: Indian manufacturers may resist green upgrades due to cost pressures. Without financial support or policy enforcement, sustainability may be deprioritized.
Regulatory Mismatch: Differences in environmental standards, licensing, and certification processes can slow down collaboration unless harmonized.
IP and Technology Transfer: EU firms may be hesitant to transfer proprietary green technologies without strong IP protections.
Workforce Readiness: India will need to upskill its workforce to manage complex green fabrication systems and environmental compliance protocols.
Sustainable semiconductor manufacturing is not just an environmental imperative; it is a strategic advantage for both the EU and India. As geopolitical shifts reshape the global chip supply chain, embedding green standards from the start offers a way to lead rather than follow. The EU–India corridor can become a global model for clean, resilient, and inclusive technology collaboration.
Through a shared commitment to sustainability, the two partners can shape a semiconductor future that is not only digitally advanced but also ecologically responsible. In doing so, they will not only secure their economic interests but also contribute meaningfully to the global climate mission.
This article is written by EICBI Research Intern - Aadvik Chauhan
References
Ministry of Electronics and Information Technology (MeitY), Government of India. “India Semiconductor Mission (ISM).”
European Commission. “European Chips Act: Strengthening Europe's Semiconductor Ecosystem.” (2023)
https://digital-strategy.ec.europa.eu/en/policies/european-chips-act
European Commission. “The European Green Deal.” (2020) https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en
International Energy Agency (IEA). “Semiconductors and Energy Use in Data Centres.” (2022)
IMEC Belgium. “Sustainable Semiconductor Technologies and Systems (SSTS).” https://www.imec-int.com/en/ssts
Applied Materials India. Corporate Profile and Sustainability Initiatives. https://www.appliedmaterials.com
European Union – India Trade and Technology Council (TTC). “Joint Statement on the Inaugural Meeting.” (May 2023)
https://ec.europa.eu/commission/presscorner/detail/en/IP_23_2900
India Brand Equity Foundation (IBEF). “Semiconductors Industry in India.” (2024) https://www.ibef.org/industry/electronics-india/showcase/semiconductors
McKinsey & Company. “Semiconductors: The Next Wave of Sustainability in Tech.” (2023) https://www.mckinsey.com
Observer Research Foundation (ORF). “The Case for a Green Semiconductor Alliance in the Indo-Pacific.” (2023)
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