Sustainability is key for Malaysia’s semiconductor sector
In April this year, the International Energy Agency (IEA) projected that data centres will use more than twice as much electricity worldwide by 2030 than now, around 945 terawatt-hours (TWh). This is ...
RSS · July 21, 2026 at 2:39 PM
MALAYSIA, 21 JULY 2026 —
The International Energy Agency (IEA) has projected that data centres will use more than twice as much electricity worldwide by 2030, reaching around 945 terawatt-hours (TWh). This staggering figure is equivalent to five times the annual energy consumption of Malaysia and surpasses the energy consumption of countries like Brazil, Germany, France, and Canada. The massive surge in electricity demand is driven largely by the growing use of artificial intelligence (AI), which is becoming increasingly commonplace in various applications, including education, medicine, and business.
Market Impact
The anticipated growth of AI and data centres is expected to lead to a significant increase in carbon emissions, primarily due to the reliance on carbon-intensive forms of energy, such as oil and gas-generated electricity. As a result, technology companies, including those in Malaysia's semiconductor sector, will face increasing scrutiny from environmentalists, policymakers, and the general public regarding their energy consumption and sustainability practices. Companies like Micron, located in Penang and Johor, are already taking steps towards sustainability, with environmentally sustainable buildings that have achieved LEED certification from the US Green Building Council (USGBC).
The core of sustainability for semiconductor manufacturers lies in energy-efficient operations, reducing carbon emissions, and minimizing waste and water use. The Malaysian government has introduced initiatives to support energy efficiency and the adoption of renewable energy, including the Green Electricity Tariff (GET) partnerships with Tenaga Nasional Bhd (TNB) and the Corporate Renewable Energy Supply Scheme (CRESS). These efforts aim to encourage companies to transition to cleaner energy sources and reduce their carbon footprint. Micron, for example, has achieved 100% renewable energy adoption through carbon offsets and a solar partnership with TNB and Solarvest, resulting in the elimination of 175,381 metric tons of carbon emissions annually.
The integration of sustainability into the National Semiconductor Strategy (NSS) is crucial to ensure that Malaysian semiconductor companies meet international energy standards and promote energy-efficient products for the global market. The NSS aims to create 10 Malaysian companies with revenue of US$1 billion and another 100 with RM1 billion annual revenue. Currently, there are around 10 semiconductor-related technology companies in Malaysia with revenue of around RM1 billion. Existing partnerships between companies, the government, and clean energy providers can serve as case studies to share lessons and best practices.
Access to carbon-free energy is essential for the semiconductor sector to compete internationally. The National Energy Transition Roadmap (NETR) aims to reach net zero and 70% renewable energy capacity by 2050, with intermediate targets of 31% by 2025 and 40% by 2035. The NETR will leverage energy efficiency, renewable energy, hydrogen, bioenergy, green mobility, and carbon capture, utilization, and storage (CCUS) to support the transition to a low-carbon economy. Innovations like floating solar farms, EV charging infrastructure, and hydrogen production will also play a crucial role in improving access to clean energy for the semiconductor industry.
The semiconductor sector's sustainability efforts will have a significant impact on Malaysia's economy and environment. The industry is a key contributor to the country's GDP, and its growth is expected to continue in the coming years. However, the sector's energy consumption and carbon emissions must be addressed to ensure sustainable growth and minimize environmental impacts. By adopting sustainable practices and transitioning to renewable energy sources, Malaysian semiconductor companies can maintain their competitive advantage and attract greater investment from multinational investors.
Stakeholders, including companies, government agencies, and industry experts, must work together to promote sustainability and energy efficiency in the semiconductor sector. By sharing best practices, investing in clean energy technologies, and implementing sustainable practices, Malaysia can maintain its position as a leading semiconductor manufacturing hub while minimizing its environmental footprint. As the industry continues to grow, it is essential to prioritize sustainability and ensure that the sector's development is aligned with the country's environmental and economic goals.
In conclusion, the Malaysian semiconductor sector's sustainability is crucial for its long-term growth and competitiveness. With the government's support and initiatives, companies like Micron are leading the way in adopting sustainable practices and reducing their carbon footprint. As the industry continues to evolve, it is essential to prioritize sustainability and ensure that the sector's development is aligned with the country's environmental and economic goals. By working together, stakeholders can promote a sustainable and energy-efficient semiconductor industry that benefits both the economy and the environment. Details not yet available on the exact timeline and implementation plans for the National Energy Transition Roadmap and the National Semiconductor Strategy, but these initiatives are expected to play a crucial role in shaping the future of the industry.
Related: Malaysia