The US government may impose stricter regulations on per- and polyfluoroalkyl substances (PFAS), commonly known as "forever chemicals", to the disaproval of companies such as Intel, Nvidia, and IBM. Samsung Electronics, which also has semiconductor factories in the US, has not yet taken any action in response.
According to reports from Chosun Biz, a Korean media outlet, more than 30 US state governments are considering passing legislation to restrict the usage of PFAS. Intel, Nvidia, IBM, and other semiconductor businesses have formed a lobbying coalition to take action against the regulations. PFAS contains a series of up to tens of thousands of different types of toxic chemicals, of which there are currently no effective material replacements in the field of semiconductor manufacturing.
Given that Samsung has wafer foundries located in Austin and Taylor, Texas, the PFAS issue also poses potential risks to the company. Texas has yet to propose PFAS-related restrictions. However, if the U.S. Environmental Protection Agency (EPA) expands PFAS restrictions nationwide, Samsung will need to address a medium- to long-term crisis.
According to sources close to Samsung, the company has not taken any official stance on the issue at the moment. However, Samsung continues to monitor various risk factors in the medium- to long-term. The South Korean tech giant does not rule out the possibility of joining forces with the lobbying coalition with other U.S. semiconductor businesses.
As the EU and the US tighten their regulation on PFAS, there are concerns about whether it will affect the supply of coolants used in semiconductor etching processes.
According to the proposed PFAS regulation in Europe, in principle, the use of PFAS will be completely banned. However, depending on the industry, a grace period of up to 18 months to 12 years will be allowed until substitute materials are developed. Considering the legislation needs to go through socio-economic impact assessments and be approved by the European Commission, it is estimated that the earliest implementation would begin in 2026.
Responding to the situation, 3M, the global leader in semiconductor coolants in terms of market share, announced in December 2022 that it will cease production of PFAS by the end of 2025. Previously, 3M's Belgium plant was temporarily shut down in March-April 2022 after the government raised the environmental standards for PFAS emissions, causing a supply shortage of semiconductor coolant. This situation prompted South Korean semiconductor companies such as Samsung and SK Hynix to diversify their suppliers and turn to Chinese businesses.
Given that Samsung and SK Hynix have diversified their coolant supply with sources from different countries, industry insiders from South Korea do not believe it will immediately impact the supply chain of Samsung and SK Hynix, even if European and American businesses reduce the production of PFAS coolant in response to environmental regulations.