Emissions from AI chip plants jump fourfold as Asia banks on dirty fuels: Greenpeace

There are many opportunities to invest directly in wind and solar energy, yet global chipmakers have failed to do so on a meaningful scale, Greenpeace says

Global emissions from electricity consumption tied to artificial intelligence (AI) chip manufacturing surged last year, driven by heavy reliance on fossil fuels in Asia's leading production technology hubs, according to Greenpeace East Asia.

Electricity consumption for AI chip production more than tripled to about 984 gigawatt hours (GWh), resulting in a fourfold increase to 453,600 metric tons of carbon dioxide emissions, Greenpeace said in a report on Thursday. Major hubs like Taiwan, South Korea and Japan face big climate and pollution risks if they keep relying on dirty fuels for power, it added.

"While fabless hardware companies like Nvidia and AMD are reaping billions from the AI boom, they are neglecting the climate impact of their supply chains in East Asia," co-author Katrin Wu said in a statement. "AI chipmaking is being leveraged to justify new fossil fuel capacity in Taiwan and South Korea - demand that could, and should, be met by renewable energy sources."

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Demand for AI chips boomed as ChatGPT started an evolution in AI services and sparked a rise of Chinese rivals, banking on processors specially designed to perform big tasks like machine learning. These chips are significantly faster and more efficient than traditional computer processing units.

The global semiconductor market could grow 15 per cent this year, driven by the strong demand for advanced chips to handle AI workloads, according to market researcher IDC. The AI market could reach US$780 billion to US$990 billion in 2027, according to consultancy Bain & Co.

To capture this boom, major AI chipmakers like Nvidia, Intel and AMD are investing in new facilities to expand their production capacities. While companies like TSMC were building new plants in the US to mitigate tariff blows, Asia-Pacific would still rank as the largest hub for advanced chips with 60 per cent of global semiconductor manufacturing capacity by 2030, according to Deloitte.

Greenpeace said this would stoke global electricity demand from global foundries to multiply 170 times from the 2023 levels to 37,238GWh by 2030. Nearly 60 per cent of the electricity in South Korea was generated from fossil fuels, compared with 70 per cent in Japan and over 80 per cent in Taiwan, it added.

Asian governments have continued to meet electricity demand with fossil fuels to fire up their power plants, Wu said, citing South Korea's approval for a 1GW liquid natural gas combined heat and power plant by chipmaker SK Hynix.

"Across East Asia, there are many opportunities for companies to invest directly in wind and solar energy, yet chipmakers have failed to do so on a meaningful scale," she added. Fabless chip design companies like Nvidia and AMD were hugely profitable and should not get away with "exporting their emissions abroad with next to zero oversight".

Greenpeace urged chipmakers to set a 100 per cent renewable energy target by 2030, and tech companies like Microsoft, Meta Platforms and Alphabet's Google to strengthen their efforts to reduce emissions in their supply chains.