PwC: By 2035, a third of the world's chip production capacity may face risks of copper supply interruptions.

Consulting firm PwC said in a report on Tuesday that by 2035, approximately 32% of global semiconductor production capacity could be affected by interruptions in copper supply caused by climate change, quadrupling the current level. The report points out that the world's largest copper-producing country, Chile, has seen production slowdowns due to water scarcity. By 2035, most of the 17 countries providing copper resources for the chip industry will face drought risks. Looking back at the previous global chip shortage, the surge in demand caused by the pandemic combined with factory shutdowns resulted in damage to the automotive industry and production stoppages in many chip-dependent industries. Glenn Burm, project leader at PwC, cited data from the US Department of Commerce in the report, stating, "This chip shortage caused the US economy to lose one percentage point of GDP growth, while Germany lost 2.4%." Copper is widely used to manufacture billions of small wires in chip circuits. Although alternative materials are in the research and development stage, there are currently no materials that can match copper in terms of cost and performance. PwC pointed out that if material innovation cannot adapt to climate change, and affected countries fail to develop a more secure water supply system, related risks will continue to escalate in the future. The report states, "By 2050, about half of the world's copper supply will be at risk - regardless of the global rate of carbon reduction." Chile and Peru have strengthened water resource assurance through improving mining efficiency and constructing seawater desalination facilities. PwC said that these measures serve as examples, but may not be applicable to countries lacking large-scale seawater resources. PwC estimates that currently 25% of Chile's copper production is at risk of supply interruptions, a proportion that will rise to 75% in the next decade, and potentially reach between 90% and 100% by 2050.