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Semiconductor-flinger SK Hynix raises $1bn to green up its act

Toxic wastewater and resource hungry - wafer-fabbing's a mucky biz

South Korean memory biz SK Hynix has issued a $1 billion “green bond” with the funds intended for pay for projects designed to reduce the ecological impact of its manufacturing activities.

The funds raised from this debt issuance will be channelled into four separate areas: water quality management, energy efficiency improvement, pollution prevention, and ecological restoration. SK Hynix had originally planned to raise $500m, but ultimately opted to double it based on demand.

The green bond issuance is part of a wider $2.5bn debt sale, which saw SK Hynix issue both three-year and five-year bonds.

Semiconductor manufacturing is a notoriously mucky business. Take water, for example. Factories producing memory and computer processors use a lot of it, with a typical semiconductor manufacturing facility consuming between two and four million gallons (7 to 15 million litres) per day, according to industry analyst Aiswarya Baskaran.

This water has to meet a certain standard, dubbed Ultrapure Water (UPW), which signifies that "contaminants" have been removed that would otherwise be present in the perfectly drinkable stuff that comes out of your tap. These include things that are otherwise harmless or beneficial for humans – like calcium, sodium, and chlorine – that can adversely impact semiconductor manufacturing. The process requires all water used to be treated, with SK Hynix using both reverse osmosis and ultra-filtration techniques in its four production facilities.

Then there's the issue of wastewater. Semiconductor facilities produce a lot of it, and it's often highly toxic.

It frequently contains high levels of phosphates and ammonia-nitrogen, which, if introduced into rivers, can produce algal blooms that reduce the amount of oxygen present in the water, killing marine life. This wastewater often contains high levels of toxic solvents and heavy metals, which ain't particularly great for human or animal life either.

SK Hynix's move follows a similar green bond issuance in April 2020 from NXP Semiconductor, maker of the MiFARE chips used in transportation access systems including the UK's TfL, the Netherlands' OV-chipkaart, Canada's Presto and Moscow's Metro.

For its part, SK Hynix has said it plans to use the funds, in part, to establish a new water disposal plant, as well as a water recycling plant. Separately, the firm aspires to roll out new low-power SSD drives, which it claimed will reduce the carbon footprint of the wider IT sector.

For what it's worth, SSDs are already a step above traditional spinning-platter drives, consuming less juice when idle and active. They're also comparatively more efficient, with less energy lost as heat. Any newfound energy efficiencies would likely be less dramatic than those obtained by switching from a HDD to an SSD, but would still add up when viewed from a global scale.

SK Hynix was the third-largest semiconductor manufacturer by revenue during 2020, according to research from analyst firm Gartner today, with a turnover of $25.2bn and a 5.6 per cent market share. Its revenues for 2020 were up 13.3 per cent compared to 2019's $22.9bn. The top spot is still held by Intel, which had 15.6 per cent market share in 2020 and turned over $70.244bn up from $67.754bn in 2019, driven by growth of its core client and server CPU businesses.

Gartner said memory was the best performing device category in 2020, benefitting from "increased server build and PC and ultramobile demand from the shift to home working and learning".

"Worldwide memory revenue increased $13.5bn in 2020, which accounts for 44 per cent of the overall semiconductor revenue growth in 2020," it said.

A move to green the growing industry can't come soon enough. ®

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