The impact of carbon emissions on financial performance: A case study of global semiconductor chip manufacturers and equipment suppliers

The semiconductor industry, pivotal to global technological advancement and economic growth, faces escalating environmental challenges as its carbon emissions are projected to rise by 8% annually. This study examines the relationship between carbon emissions and financial performance within the global semiconductor manufacturing and equipment ecosystem, focusing on chip manufacturers and equipment suppliers. Utilizing data from 34 leading companies (2019–2022), we analyze the impact of narrowly defined total carbon emissions (ΔTN_CE) and Scope 3 emissions (ΔS3_CE) on return on assets (ROA). Our findings reveal a significant negative correlation between ΔTN_CE and ROA for chip manufacturers, indicating that emission reductions align with improved financial outcomes. Conversely, ΔS3_CE shows a positive association with ROA in this segment, reflecting nascent stages of Scope 3 management and market responses. Equipment suppliers exhibit no statistically significant links between emissions and financial performance. The study underscores the critical role of value chain collaboration—particularly with upstream suppliers, responsible for 20–30% of emissions—to achieve decarbonization. The study proposes that targeted carbon strategies, supported by policy and cross-industry partnerships, can reconcile environmental and economic goals in this high-growth sector.