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A July 8 report by PricewaterhouseCoopers (PwC) revealed that 32% of global semiconductor production could face climate change-related copper supply disruptions by 2035, according to Reuters.
PwC’s Protecting People and Prosperity series published the findings and urged semiconductor manufacturers and copper miners to strengthen supply chain resilience in the face of accelerating climate risks.
The report highlighted that Chile—the world’s largest copper producer—has seen its production slow down because of water shortages and that most of the 17 countries that supply the chip industry including China, Australia, Peru, Brazil, the U.S., Democratic Republic of Congo, Mexico, Zambia and Mongolia, will be at risk of drought by 2034.
PwC also estimated that 25% of Chile's copper production is at risk of disruptions today, rising to 75% within a decade and to between 90% and 100% by 2050.
In the report, PwC Project Lead Glenn Burm stated that the last global chip shortage fueled by a pandemic-driven demand spike that coincided with factory shutdowns crippled the automotive industry and halted production lines across other chip-dependent sectors.
"It cost the U.S. economy a full percentage point in GDP growth and Germany 2.4%," Burm noted, citing the U.S. Department of Commerce. The report also stated, "Around half of every country's copper supply is at risk by 2050—no matter how fast the world reduces carbon emissions."
Copper is essential in the production of semiconductor circuits, which underpin technologies from smartphones to electric vehicles and industrial machinery. Even if alternatives are being researched, there is currently no match for its price and performance.
The report noted that the risk will increase over time if material innovation fails to adapt to climate change, and affected countries fail to develop a more secure water supply.
While Chile and Peru have taken steps to secure their water supply by increasing mining efficiency and building desalination plants, the report stated that this may not be a viable solution for countries with no access to large bodies of seawater.
