Climate change could disrupt up to one-third of the global semiconductor supply within the next decade unless the industry rapidly adapts, according to a new report by PwC.
The analysis, published as part of PwC’s Protecting People & Prosperity series, found that 32% of projected global semiconductor production could be exposed to climate-related copper supply risks by 2035.
That figure could surge to 58% by 2050 if global carbon emissions continue their current trajectory.
Copper is an essential component in semiconductor manufacturing, and copper mines are becoming increasingly vulnerable to extreme weather and droughts.
The report identifies water scarcity as a growing threat to copper mining operations, especially in countries such as Chile, the world’s leading copper producer.
“Semiconductors are the hidden lifeblood of modern technology, embedded in everything from computers and phones to cars and washing machines,” said Glenn Burm, global semiconductors leader at PwC South Korea.
“We can act now by understanding and managing risks to supply, including the physical risks of climate change.”
The semiconductor industry, currently valued at $650 billion, is projected to exceed US$1 trillion by 2030. Yet PwC’s report suggests that many firms have yet to fully account for climate risk in their supply chains.
While only one key copper-producing nation currently faces severe drought risks, PwC warns that within ten years, copper mines in most of the 17 countries supplying the semiconductor industry could experience similar conditions.
By 2035, an estimated 34% of copper used in semiconductor production may be at risk of disruption due to drought.
Some mining companies, especially in Chile, are beginning to act – such as investing in desalination plants and improving water efficiency.
Semiconductor manufacturers are exploring material innovations, recycling processes, and more compact circuit designs to mitigate risks.
Lynne Baber, PwC’s global deputy sustainability leader, said companies should treat climate disruption as a commercial risk. “By uncovering hidden vulnerabilities across supply chains and operations, businesses can proactively shape resilience strategies that protect value at risk – whether financial, operational or reputational,” she said.
“Smarter climate adaptation unlocks agility, inspires innovation, and positions companies to lead in a more volatile world.”
The report urges business leaders to assess exposure to climate disruption across their entire value chains and adopt measures such as supplier diversification, material substitution, and stronger collaboration between buyers and producers.
As demand for semiconductors continues to surge, fuelled by growth in AI, renewable energy, and digital infrastructure, the industry’s dependence on vulnerable raw materials is coming under sharper scrutiny.
“There’s great progress, but businesses can and should do more,” Burm said. “As AI and other technologies drive digital transformation, the importance of securing critical commodities will only grow.”
