SK hynix bags $1bn for green chips with everything

SK hynix, the Korean memory chip maker, has issued a $1bn green bond to help clean up its manufacturing act.

Water management is extremely critical in the semiconductor industry, according to the company, which intends build a state-of-the-art wastewater disposal plant and a water recycling system. The bond cash will also help pay for energy efficiency improvements, pollution prevention, and ecological environment restoration. (The Register has more to say about the water treatment in semicon manufacturing here.)

SK Hynix is a member of RE100, an industry initiative that commits participants – they include Chanel, Apple, Starbucks and TSMC – to move to 100 per cent renewable electricity. This is a tough ask for the Korean vendor.

The SK group of companies, which includes SK Telecom, collectively consumes 31 terawatts of electricity a year, amounting to five per cent of South Korea’s entire electricity energy use. One group company, SK Holdings, is aiming for 100 per cent renewable energy use by 2030 while the other group companies are giving themselves 20 years more, and looking at 2050. They say that it is currently impossible to make the switch to renewable electricity, without a renewable power supply certificates system in place in the market.

The Korean government is launching Korea Renewable Energy Guarantees of Origin this month. It has pledged that the country, the world’s seventh largest CO2 emitter, will achieve net zero emissions by 2050. and says disk replacement by SSDs could cut disk-based carbon emissions by 93 per cent.

SK hynix said in November, it wants to replace disk drives with SSDs which emit up to 93 per cent less carbon through electricity use, according to the company. This is basically telling customers not to buy Seagate, Toshiba and Western Digital disk drives because they harm the environment much more than SSDs. Also, while you’re at it, buy SSDs from SK hynix, a company with has great green credentials.

A green bond is used to fund projects that have positive environmental and/or climate benefits. Issuers must track, monitor and report on use of proceeds. The benefits include a positive marketing story with a supplier’s so-called green assets and green business activities being highlighted. A green bond supplier can also widen their investor base to include specialist ESG (Environmental, Social, Governance) and Responsible Investors.