STMicroelectronics is on our SB 20 List – the world’s top sustainable stocks. This article is about RMI’s work with ST. Amory Lovins co-founded RMI and is known as the world authority on energy efficiency.
by Chris Lotspeich
“The best way to predict the future is to invent it.”
Alan Kay, computer pioneer
ST is one of the world’s top five microchip manufacturers, with over $6 billion in revenues and 43,000 employees in 31 countries at 17 manufacturing sites and other corporate facilities. CEO Pasquale Pistorio champions total quality management (TQM), emphasizing measurement and continuous improvement to boost yield and minimize waste. The Decalogue, ST’s “ten commandments” of environmental performance, specifies goals for saving energy and water, reducing greenhouse gases, and other objectives. Pistorio says environmental management “is not an expensive luxury, but an economic advantage.
Microchip Manufacturing
Microchip fabrication facilities (or “fabs”) are complex and energy-intensive. Chips are made on silicon wafers in high-tech devices called “tools,” which operate inside climate-controlled “clean rooms.” Chip manufacturing is very sensitive to disruption and contamination. Production stoppages can cost more than $1 million per day.
Fabs have extensive heating, ventilating, and air conditioning (HVAC) systems with high-performance filters to maintain clean rooms’ temperature and humidity very precisely while limiting airborne particles. Fans, pumps, furnaces, and chillers deliver conditioned air and cooling water into the clean room via ducts and pipes. Depending on their size, fabs use from 3 megawatts to as much as 15 megawatts of power. HVAC systems consume 3050 percent of a fab’s electricity; tools use another 40 percent or so. Energy accounts for less than 2 percent of a chip’s cost, yet electricity can be the largest single operating expense for a chipmaker, totaling millions of dollars annually at a single fab. Moreover, energy-saving measures can improve key operating parameters (yield, setup time, flexibility), and in new plants can save capital and construction timecritical factors in competitiveness.
Despite great innovation, semiconductor manufacturing fosters a risk-averse corporate culture due to exacting process requirements, safety risks, the high cost of downtime, and brutal competition in a fast-moving marketplace. (Not surprisingly, Intel CEO Andy Grove’s book was titled Only The Paranoid Survive.) Meeting production and time-to-market targets requires extraordinary control over thousands of variables. When something works, it is copied exactly. Firms also “copy exactly” previous fabs when building new ones. This saves some time and initial cost, yet retards improvements outside the clean room, including energy efficiency featuresthus raising operating costs. It’s somewhat ironic that cutting-edge technologies are made in buildings designed decades ago, and thus those buildings now offer significant energy-and money-saving potential.
RMI’s work with ST
In the mid-1990s, Amory Lovins’s longtime friend and mentor Lee Eng Lock helped to make ST’s Singapore fab the most energy-efficient in the industry. Energy costs per silicon wafer were reduced by 60 percent with a compact, multilevel fab design as well as retrofit projects, 80 percent of which paid for themselves within 18 months. Lee then gave Lovins’s book Factor Four to ST’s Vlatko Zagar. He shared it with Vice President of Total Quality and Environmental Management Murray Duffin, who asked RMI to work with ST. I was then an RMI senior associate and Amory’s executive assistant, and was fortunate to lead our consulting with ST.
During 19982000, Amory and I led energy efficiency surveys at eight fabs in Europe and the US. Some of our recommendations were tried and yielded immediate benefits. We trained ST staff and helped Zagar develop an energy efficiency manual.
Typically we identified potential HVAC energy savings of 3050 percent, plus other efficiency opportunities. Collectively these retrofits had payback periods of less than two years. Generally we worked outside the clean rooms to avoid concerns about interfering with production. Significant energy and water efficiency potential also exists in the manufacturing process, which ST has begun to explore.
Our recommendations included slowing fans and pumps while maintaining flow with low-friction ducts and pipes. Halving air velocity reduces fan energy by nearly seven-eighths. Control networks with performance sensors and motors with variable-speed drives enable HVAC systems to do only as much work as is needed at each moment. “Free cooling” can be provided by cool outside air or, in low-humidity conditions, by running more cooling towers at lower fan speeds. The free cooling system at ST’s fab near Milan costs 80 percent less to operate than conventional cooling, saving $500,000 annually with a payback of one to three years, depending on the weather.
Results
Since the mid-1990s, ST has steadily reduced its resource intensity while rising from outside the ranks of the top ten chipmakers to become one of the five biggest in revenue. From 1994 to 1997, ST exceeded its Decalogue goal of reducing energy use annually by 5 percent per million dollars of added value. After the first year of work with RMI in 1998, ST had reduced energy consumption by 17 percent and CO2 emissions by 20 percent relative to the 1994 baseline.
In 1999 RMI evaluated two fabs’ implementation of our recommendations. In one year, mechanical utilities energy use decreased by 510 percent overall, and fell by as much as 40 percent in air and water handling. Savings equaled 24 percent of total site energy use, even though the manufacturing process was excluded. ST’s worldwide energy intensity fell 26 percent from 1994 to 1999.
Despite the 2001 market downturn, energy efficiency per unit of production improved 15 percent from 2001 to 2002. Electricity use per wafer went down by about one-third during 19942002, while electricity per pin (the external lead connection on a finished product) fell 4050 percent below 1994 levels.
Energy efficiency added $60 million of profit between 1994 and 2001. No energy efficiency investment has taken longer than three years to pay back, and collectively these measures have yielded an average payback of two years. A 2001 company-wide survey identified 350 energy efficiency actions to be implemented by 2004 with projected annual savings of over $11 million.
ST’s Goal: Zero Net CO2 Emissions by 2010
ST believes climate change is “the most pressing environmental threat.” Lovins contributed to Duffin’s and Pistorio’s comprehensive climate strategy, which included production improvements, energy efficiency, cleaner power, and carbon offsets. Based on these efforts, in 19
99 ST set a goal of zero net CO2 emissions by 2010when ST expects to be making forty times as many chips as it did in 1990.
By 2010, ST’s electricity is to come 65 percent from alternative sources such as fuel cells and cogeneration, 30 percent from conventional sources, and 5 percent from renewables. This would reduce CO2 emissions per million dollars of added value by more than 80 percent from 1990. ST forecasts total savings of over 10 million metric tons of CO2 and $900 million of energy during 19942010. ST has photovoltaics on buildings in the US and France, and is adding to its suppliers a combined heat and power plant in Sicily and a 10.5-megawatt wind farm in France. ST will offset remaining CO2 emissions with reforestation and other activities, including 3,000 hectares of trees planted by 2003. In 2002’s down market, ST’s environmental investments were 1.29 percent of its total investmentsand, since 2000, boasted a nearly 50 percent return. Since 1994, the fraction of waste sent to landfill fell from 70 percent to 15 percent; the recycled fraction rose from 25 percent to 60 percent; and water consumption fell 33 percent, saving $70 million.
Conclusion
The RMI team’s relationship with ST continues. ST researchers supported the Hypercar project, in which Pistorio also invested personally. Mr. Lee participated in the 2001 global energy survey. Peter Rumsey worked on ST’s U.S. fabs, and designed an award-winning ventilation system for a Phoenix clean room that reduced energy consumption by 75 percent.
ST says its “ecological commitment [is] not only for ethical and social reasons, but also for financial return, and the ability to attract the most responsible and high performing people.”
“Our ecological vision’ is to become a corporation that closely approaches environmental neutrality.” Pistorio adds “Nevertheless, we are strongly motivated by a spirit of constructive dissatisfaction,’ and we cannot be complacent. There is much more to do and we are still far from meeting the needs of today without compromising the ability of future generations to meet their own needs.”
++++A former RMIte, Chris Lotspeich is a principal with Second Hill Group, an independent consultancy in Coventry, Connecticut. He can be reached at chrislot@secondhill.com.
FROM Rocky Mountain Institute Newsletter, a SustainableBusiness.com Content Partner
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