One-third (32%) of global semiconductor production will be reliant on copper supply at risk from climate disruption by 2035, rising to 58% by 2050 if emissions do not decline, according to new research from PwC.

Its latest report highlights that copper mines, which require a steady water supply to function, face increasing risk from severe drought due to climate change.

Currently, copper from only one country or territory that supplies the semiconductor industry—Chile—faces severe drought risks.

However, within a decade, copper mines in the majority of the 17 countries that supply the semiconductor industry face severe drought risks.

As a result, more and more of the copper supply that semiconductor production relies on will be at risk—and as early as 2035, at least 34% of every semiconductor-making territory’s copper supply is projected to be at risk of drought disruption.

“Semiconductors are the hidden lifeblood of modern technology, embedded in everything from computers and phones to cars and washing machines,” explained Glenn Burm, who serves as global semiconductors leader for PwC South Korea.

“It’s hard to think of a company that doesn’t rely on semiconductors in some way. They underpin economic security, are vital to unlocking the potential of AI and integral to renewable energy.

“We can act now by understanding and managing risks to supply, including the physical risks of climate change. Around the world, companies are adapting by boosting water production, diversifying supply chains, and strengthening climate resilience.

“There’s great progress, but businesses can and should do more. As AI and other technologies drive digital transformation, the importance of securing critical commodities will only grow.”

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The report’s analysis underscores the need for both copper exporters and semiconductor buyers to adapt their supply chains and practices if they are to manage the risks caused by climate change.

While businesses are taking action, and 68% of investors believe companies should increase action to de-risk their supply chain according to PwC’s 2024 Global Investor Survey, more needs to be done.

Across the value chain, businesses should approach climate disruption as a commercial risk that needs to be managed, PwC highlighted.

The various actions stakeholders can—and in some cases are already taking—include measures such as increasingly recognising climate risks and taking steps around material innovation; i.e. using alternative materials, and recycling and leveraging the circular economy.

Additionally, those working in copper can increase water supply by investing in desalination plants, improving water efficiency, and recycling water.

Some copper miners, especially in Chile, are already taking action to protect their operations from drought through desalination.