In This Issue
Summer Bridge on Critical Materials
June 15, 2024 Volume 54 Issue 2
The summer issue of The Bridge discusses leveraging new and emerging technologies, infrastructure, innovative approaches, and a resilient supply chain to ensure a stable and reliable supply of critical materials far into the future.

Critical Materials Risks to Electronics Manufacturing: Global Impacts and Actions Needed

Wednesday, June 12, 2024

Author: John W. Mitchell

The electronics industry is moving quickly to adapt and reinvent itself for a bright future.

Global supply chain risks associated with underlying materials apply to all of society’s technologies due to the pervasiveness of electronic systems across every industrial vertical. This article will address the impacts of critical ­materials and rare earth minerals shortages on semiconductors, large-capacity batteries, and other technologies. This article will also explore the importance of sustainability efforts like eco-design, reuse/recycling, and legislative proclamations that drive demand for materials usage, in addition to ideas on how to change design methodologies and upgrade and then discard electronics.

From agriculture to telecommunications, every industrial vertical has grown to rely on technology, specifically electronics. From product development and manufacturing to their back-office operations and mastery of big data, the world needs electronics and electronic systems to deliver products and services. Any risks to supply chains that threaten the production of these electronics need to be understood, and where risks are unacceptably high, an alternative approach must be pursued. In the US Geological Survey “2022 List of Critical Materials” (Burton 2022) the majority of the fifty materials listed broadly apply to the entire electronics industry. From the perspective of IPC International, Inc. (IPC),[1] the global electronics industry association, critical ­materials for semiconductors, rare earth materials, and large capacity batteries are some of the most in-demand areas of concern. When assessing these risks, it is ­necessary to discuss ways to reduce their impact. The path described herein to minimize or eliminate risks presupposes nonviolent solutions during this time of geo­political tensions.

While there are thousands of details involved in the design, development, and manufacturing of ­electronics, a simple overview of the process will be provided for consistent reference and a description of the ­electronics eco­system involved. Much attention is given to semi­conductors, as demonstrated by decision-makers around the globe prioritizing policies and funding towards improving the infrastructure for chips. However, semiconductors are just one part of the entire electronics ecosystem—an ecosystem that can be destabilized with the disruption of less visible supply chain segments. The electronics manufacturing process starts with design and then moves to component capabilities and creation, which in themselves can be entire systems. The parts include passive (resistors, capacitors, etc.) and active (e.g., semiconductors) components. Printed circuit boards are fabricated to establish the necessary connections between components, and then all components (active and passive) are placed on the boards and attached with various connective materials—usually solder-based materials. Each step to building the entire system is surrounded by other systems of machines and materials to build the machine or material that is needed, many of which are also wholly dependent on electronics. It takes electronics to make electronics.

Risks and Options: A Non-exhaustive List

Rare Earth Elements

While the seventeen rare earth elements (REEs) are not necessarily rare (they exist abundantly in the earth’s crust), they are difficult to obtain due to their lack of large ­deposits and co-location with other elements. These metallic elements are used in magnets and as catalysts in both traditional and low-carbon electronics, as well as in the production of high-performance electronics, alloys, and glass. Most of the volume and production of these elements exist in China (38% [LePan 2021]). China dominates REE production and largely controls market access. The only way to change this is to discover new deposits of these materials or develop new methods of extracting deposits more efficiently to open previously abandoned possibilities. But current extraction processes create another problem: environmental impacts, in some cases devastation. Recently on the policy front, the European Union (EU) and the United States have entered into discussions to combine efforts to strengthen their position relative to China by potentially merging the EU’s critical raw materials club concept with the US administration’s Minerals Security Partnership (Nardelli and Marlo 2024).

Critical Minerals and Materials

Political efforts to address the scarce nature of minerals include an effort engaging four countries and the EU. The aforementioned US-led Minerals Security Partnership strives to leverage environmental, social, and governance (ESG) principles across the critical minerals sector globally.[2] In addition to the fifty critical minerals listed by the US Geological Survey, other critical materials need to be considered. Useful byproduct materials, like neon, should be added to the list of concerns, as geo­political unrest has put pressure on base materials funda­mental to the processes used, resulting in scarcity of these byproducts due to their limited location. Neon is used in semiconductor lithography lasers. Currently, integrated circuit substrates likely fit into this category, with over 95% of integrated circuit substrate production being based in Asia (Kelly and Vardaman 2021).

Semiconductors are just one part of the entire electronics ecosystem—an ecosystem that can be destabilized with
the disruption of less visible supply chain segments.

Without substrate capabilities, semiconductors are useless pieces of silicon unable to connect and operate within a system. Substrate capabilities are limited by materials challenges. For example, Japan owns critical materials like Ajinomoto Build-up Film (ABF), which are necessary for substrate production for semiconductors. But substrate capabilities are also limited in terms of the expertise of a broad workforce that can manufacture them, even if materials are obtained or produced.

On a positive note, recent global investments are opening up opportunities to alleviate substrate ­difficulties. Government subsidies have been announced in the ­United States, Europe, India, and other parts of the world to improve the semiconductor ecosystem, including the production of substrate technologies. Even when government funding is awarded, the reality is that most of these proposals are still five years away from reaching the technology exhibited in Asia last year.

Financial and political pressures require that
we make changes, and, as it always has, the electronics
ndustry is moving fast to adapt and reinvent itself for an even brighter future.

Water

The story around water is not new. Many do not realize that some semiconductor fabrication facilities can use five million gallons of water daily (Govindan 2022). A sobering example of the strong need for water by the semi­conductor industry was reported in 2021 (Zhong and Chien), when Taiwan semiconductor factories were fighting with agricultural fields for mutually needed water. In this case, the fields went dry as technology’s needs took priority over crop development. This does not include other ­electronics manufacturing processes that also use water in many of their production processes, like ­printed circuit board fabrication. It is imperative to develop three separate processes to mitigate this. The first effort, which is already underway, is the treatment of water used in electronics and semi­conductor production to make sure it is recycled and returned clean. Some electronics manufacturers have wastewater treatment capabilities that enable facilities to return water cleaner than it was when received, and some semiconductor fabricators have been recycling 40-70% of the water used (Johnson 2022). Secondly, there is the process of recycling water in such a manner that you close the loop on your water needs. Water obtained stays in the factory and can be con­tinually reused as ­losses are minimized. Thirdly, more efficient processes have been developed to reduce water usage in electronics and semiconductor production for over fifteen years (Goosey 2005). Improvements in each of these three areas are being explored. While this is a positive and ever-improving direction, the challenge remains as the demand and ubiquitous desire for electronics continue to accelerate.

Tin

Tin is the glue for electronics, as it is the vital material contained in most types of solder. An absence of tin would result in an absence of electronics. Many of the solutions to deliver sustainable objectives rely upon electronics to become a reality. Tin is critical for electronics to work. The forecasted demand for electronics outpaces the worldwide supply of mined tin. Estimates indicate that there may only be forty years’ worth of tin left to mine at current extraction rates with known global deposits available (Jowitt et al. 2020). Again, recycling and improved processes through investments are the prescribed paths (ITA 2023).

Key Product Challenges

There are two key product families threatened by the risks described above: semiconductors and batteries. Semi­conductors face several challenges from critical materials, water, and REE shortages and access. Rare earth metal oxides (REMOs) are synthesized from REEs and used in the formation of semiconductors, as well as many of the more popular electronics products in use today, such as televisions, wind turbines, LED light bulbs, and cell phones. According to Patil and colleagues (2022), “REE and their alloys have seen a surge in use in a variety of technological devices in the last three decades, including computer memory, DVDs, rechargeable batteries, autocatalytic converters, super magnets, mobile phones, LED lighting, superconductors, glass additives, fluorescent materials, phosphate binding agents, solar panels, and MRI agents.” The criticality of these REEs and REMOs to the electronics products being consumed cannot be understated.

Sustainability

Solutions to enable sustainable manufacturing and address production challenges will improve the quality of life now and into the future and will address resource conservation and the need to continuously improve processes to ensure the efficient use of resources. E-waste was estimated to be around 54.6 million tons (Mt) in 2019 and is estimated to be 75 Mt by 2030 (Forti et al. 2020). These quantities of waste are also valuable resources to circularize the life cycle of products. The waste ­hierarchy stresses waste prevention, reduction, reuse, recycling, recovery, and, lastly, disposal—practices that can help begin to address some of the risks associated with resource management.

As production facilities, manufacturing equipment, and processes are designed to be more efficient, they can produce using less resources like water. In fact, the very water being used in more effective manufacturing facilities is reused several times over. In electronics systems production, like printed circuit board fabrication, some metals and chemicals that could be classified as waste—and, in some cases, hazardous waste—are able to be recycled at an ever-increasing rate. New reclamation systems are being developed for improved management of electronics at end-of-life, preventing e-waste; these systems look to chemical and mechanical means, and they continue to be an area of focus in the pursuit of more sustainable, or circular, electronics (Mir and Dhawan 2022).

IPC continues to dedicate its resources to various sustain­ability-focused initiatives, including the recent formation of the industry-led IPC Sustainability for ­Electronics Leadership Council, which is responsible for helping to identify opportunities to improve sustain­ability for electronics manufacturing and create efficiencies for the industry.[3] In June 2023, the Sustainability for Electronics Leadership Council worked with IPC’s Chief Technologist Council to publish a white paper, Electronic Design and Manufacturing Sustainability (2023), which provides an overview of eight sustainability topics that affect the electronics industry.

Eco-design

A focal point for influencing resource needs, and the real game-changer for risk management, is found at the front end of the electronics manufacturing process: design. Design for circularity or eco-design of ­electronics needs to become the norm going forward. These ­approaches will promote modular designs and upgradability, which will make the ideals of reuse and extended life of products more realistic possibilities. The idea of using the same phone that was in use ten years ago would hamper even the most conservative mobile phone users today. But if that same phone were designed with modules that could be swapped out, upgraded, and designed so that the exchanged modules were able to have much of the metal and valuable contents reclaimed, then perhaps keeping your phone for multiple years would be a realistic prospect. New materials could be utilized, integrated into updated modules, and inserted into existing systems. While this may all seem like an obvious direction, without the upfront business decision to leverage eco-design principles and commit to a business model that does not end in the disposal of the product, this will feel more like science fiction than scientific fact.

Changing an Industry

How can companies intrinsically change their design and production business models? Historically, changing materials and product modalities has been slow to occur without there being a financial necessity. Many of these financial necessities are upon us and have been growing over the past decade. The electronics industry has found alternatives to hazardous materials like lead metal and implemented alternative materials and processes due to policy drivers such as the Restriction of Hazardous Substances in Electrical and Electronics Equipment Directive in the EU. Electronics manufacturers build for a global market—even in times of unrest. Using different materials for different markets costs more to develop, and economies of scale are often diminished. Similarly, regulatory pressures have pushed for cleaner and more energy-­efficient manufacturing facilities, and the industry has continued to respond. More recent financial requirements have come in the form of ESG pressures from the investment community. Recent data also seems to indicate that the application of ESG practices to businesses attracts investors for a good reason: companies that follow them are more profitable, according to Bain and EcoVadis (Ashcroft 2023). Efforts from governments have been promoting better use of materials, or different ones. The US legislative efforts alone have amounted to over $8 billion in funding for the Department of Energy and the Department of Interior; these efforts include parts of the Energy Act of 2020, the Bipartisan Infrastructure Law, the CHIPS and Science Act, as well as the Inflation Reduction Act (Broberg and Jacobs 2023).

Financial and political pressures require that we make changes, and, as it always has, the electronics industry is moving fast to adapt and reinvent itself for an even brighter future. The development of recycling technologies, eco-design, and investigation into new materials and processes will likely result in the world having products that are operated, consumed, and maintained in ways that are very different from what the world has been accustomed to in the past.

References

Ashcroft S. 2023. ESG compliant firms ‘more profitable’ says Bain & EcoVadis. Supply Chain Digital, April 18.

Broberg D, Jacobs J. 2023. Expanding domestic critical mineral supply chains. Bipartisan Policy Center, March 15.

Burton J. 2022. U.S. Geological Survey releases 2022 list of critical minerals. US Geological Survey, Feb 22.

Forti V, Balde C, Kuehr R, Bel G. 2020. The Global E-waste Monitor 2020. United Nations University, International Telecommunication Union, and International Solid Waste Association. Bonn/Geneva/Rotterdam.

Goosey M. 2005. Water use in the printed circuit board manufacturing process and approaches for reducing consumption. Circuit World 31(2):22–5.

Govindan P. 2022. Water’s critical role in semiconductor manufacturing. Industry Today, Jan 2022.

IPC Chief Technologist Council. 2023. Electronic Design and Manufacturing Sustainability. Bannockburn, Illinois.

ITA (International Tin Association). 2023. Tin 2030: A Vision for Tin. St. Albans, England.

Johnson D. 2022. Scarcity drives fabs to wastewater recycling. IEEE Spectrum, Jan 25. Online at https://spectrum.ieee.org/fabs-cut-back-water-use.

Jowitt SM, Mudd GM, Thompson JFH. 2020. Future ­availability of non-renewable metal resources and the influence of environmental, social, and governance conflicts on metal production. Communications Earth & Environment 1:13.

Kelly M, Vardaman J. 2021. North American Advanced ­Packaging Ecosystem Gap Assessment. Bannockburn, ­Illinois. Online at https://go.ipc.org/en-us/­advancedpackagingreport.

LePan N. 2021. Rare earth elements: Where in the world are they? Elements, Nov 23.

Mir S, Dhawan N. 2022. A comprehensive review on the ­recycling of discarded printed circuit boards for resource recovery. Resources, Conservation and Recycling 178:106027.

Nardelli A, Marlo I. 2024. EU, US to align global minerals push against China’s supply grip. Bloomberg, Feb 9.

Patil AS, Patil AV, Dighavkar CG, Adole VA, Tupe UJ. 2022. Synthesis techniques and applications of rare earth metal oxides semiconductors: A review. Chemical Physics Letters 796:139555.

Zhong R, Chien AC. 2021. Drought in Taiwan pits chip makers against farmers. The New York Times, April 8.

 

[1]  www.ipc.org/

[2]  www.state.gov/minerals-security-partnership/

[3]  www.ipc.org/advocacy/sustainability-electronics

About the Author:John W. Mitchell is president & CEO, IPC International, Inc.