.png){kind=logo}
The semiconductor industry, already strained by years of global supply chain disruptions, is now staring down a new threat: climate change.
According to a recent report from PwC, nearly one-third of the copper used in semiconductor fabrication could face supply disruption by 2035 due to climate-driven water shortages—especially in top-producing regions like Chile.
The report highlights that about 32% of chip-grade copper supply could become vulnerable within a decade, with Chile—currently the world’s largest copper exporter—already showing signs of stress.
Around 25% of Chile’s output is currently exposed to drought risk, a figure expected to rise to 75% by 2035 and over 90% by 2050 if high-emissions trends continue.
Why Copper Matters to Chips—and Clean Tech
Copper is critical in semiconductor manufacturing, used in everything from interconnects to printed circuit boards, essential for power devices in electric vehicles, renewable energy systems, and AI data centers. Any bottleneck in copper supply could stall technological advancement across these fast-growing sectors.
PwC notes that the last chip shortage (2020–2022) shaved up to 1% off the U.S. GDP and 2.4% off Germany’s. A copper-driven disruption could have similarly sweeping consequences, especially as the global economy shifts toward electrification and digitalization.
Chile at the Center of the Crisis
Chile’s copper mines are already facing pressure from prolonged droughts. Mining giants like BHP, Antofagasta, and Codelco have responded by investing heavily in desalination plants—piping seawater inland to replace dwindling freshwater resources.
Today, roughly 30% of water used in Chilean copper production comes from desalinated sources.
However, environmental groups and Indigenous communities warn that this strategy isn’t enough. Local ecosystems are still suffering, and expansion of desalination infrastructure requires time, capital, and political will—all of which are in short supply.
A Global Supply Chain Under Pressure
PwC’s analysis goes beyond Chile, projecting that copper exports from other major suppliers—Peru, China, the U.S., Australia, and the Democratic Republic of Congo—will also face escalating drought risk in the coming decades. By 2050, up to 58% of global semiconductor copper inputs could be exposed.
Semiconductor companies and OEMs are now being urged to:
Diversify copper sourcing across regions.
Increase use of recycled copper in packaging and interconnects.
Invest in supplier mapping to assess physical climate risk.
Explore alternative conductive materials, though most are not yet scalable.
Copper is no longer just a materials question—it’s a geopolitical and climate-resilience issue with real consequences for the digital economy.
Over two-thirds of institutional investors now expect climate resilience to be integrated into supply chain disclosures. With the countdown to 2035, semiconductor and renewable energy players must act now to safeguard the copper flows that power technologies.
As climate volatility accelerates, copper has become a high-risk chokepoint in the global semiconductor supply chain. From powering AI data centers to enabling clean energy transitions, the stakes are higher than ever. OEMs, chipmakers, and investors can no longer afford to ignore the climate threats looming over critical raw materials.
Subscribe to IBS Electronics News for more timely updates and breaking developments that impact the global electronics supply chain.
Why We Are One
For over 40 years, IBS Electronics Group has provided a broad range of integrated supply chain and electronicsmanufacturing solutions tailored specific to our customer's operations. As your one source for the industry’s top brands all in one place, our engineers specialize in reducing supply chain complexity and are here to provide you with dedicated support from prototype to production.
.png?resizemode=force&maxsidesize=96)
