Building a green and low-carbon supply chain is one of the key practices for sustainable development at TSMC. In addition to driving the transformation of suppliers' distillation tower pipelines to redirect separated carbon dioxide back into the tower for purification, TSMC is also responding to the increasing demand for hydrogen from advanced processes by encouraging suppliers to recycle carbon dioxide emitted from the natural gas production process into electronic-grade liquid carbon dioxide for reuse at TSMC. At the same time, TSMC assists suppliers in purchasing carbon-neutral natural gas and has adopted underground pipelines to supply hydrogen directly to the Southern Taiwan Science Park, marking the first successful hydrogen pipeline project for Taiwan Science Parks, and enhancing suppliers' capabilities in low-carbon transformation. As of June 2024, over 35,000 metric tons of electronic-grade liquid carbon dioxide have been reused by TSMC, and suppliers have reduced carbon emissions by 38,000 metric tons annually by using carbon-neutral natural gas, resulting in a reduction of over 5,200 hydrogen tank truck transportation trips, covering approximately 50,000 kilometers and equivalent to circling Taiwan more than 50 times, demonstrating the Company’s commitment to mutual benefits in the industry.

Recycling and Reusing Carbon Dioxide for Environmental Friendliness

Hydrogen is a crucial raw material in advanced semiconductor manufacturing processes. Typically, natural gas is desulfurized and reacts with demineralized water vapor through Steam Methane Reforming (SMR) technology to recombine, generating electronic-grade hydrogen gas through high-temperature carbon monoxide converters, producing carbon dioxide in the process. In order to promote environmental sustainability and enhance the efficiency of carbon dioxide utilization, in 2021 TSMC collaborated with a supplier to install a carbon dioxide recovery and purification system in the hydrogen production plant. This system processes the carbon dioxide into electronic-grade liquid carbon dioxide. Additionally, the process change was communicated with each fab and qualification was arranged to ensure that the recycled electronic-grade liquid carbon dioxide meets TSMC specification requirements and to ensure that product quality continues to meet standards.

Apart from the reprocessing and reuse of electronic-grade liquid carbon dioxide, TSMC also guides its suppliers to procure carbon-neutral natural gas, reducing carbon emissions during the hydrogen production process. Considering the increased demand for hydrogen in manufacturing processes, in 2019 TSMC collaborated with a supplier and the Southern Taiwan Science Park Bureau to establish a hydrogen pipeline at the Fab 18A wafer plant, which became the standard design for new TSMC plants. This initiative not only saves manpower and transportation volume for suppliers but also enhances the stability of hydrogen supply, achieving a win-win outcome.

Deepening the sustainability of the supply chain is an important part of TSMC's ESG development. In addition to increasing the reuse of electronic grade liquid carbon dioxide, TSMC will continue to promote the use of carbon-neutral natural gas by suppliers. The Company expects that hydrogen pipeline installations for Fab 18B and Fab 22 will be completed in October 2024 and January 2025 respectively, resulting in annual savings of over 15,000 tanker truck transports. Together, TSMC and suppliers are working towards the goal of a net-zero semiconductor supply chain.