Manufacturing Impact Report: Technology Hardware & Equipment Edition, Q1 2025

Energy Consumption Challenges and Semiconductor Tariffs Reshape Tech Hardware Future

This comprehensive analysis examines how technology hardware manufacturers face significant challenges from rising AI-driven energy consumption, with Microsoft's Scope 3 emissions increasing 31% due to data centre expansion, despite purchasing 5 million metric tons of carbon removals. The research examines how the computational power of AI systems is doubling approximately every 100 days, resulting in unprecedented energy demands that necessitate sophisticated approaches to both operational efficiency and strategic planning throughout technology value chains.

The report additionally reveals how semiconductor tariffs have disrupted sustainability initiatives for 67% of hardware manufacturers particularly affecting circular design implementation and energy efficiency improvements.

Call to Action: Technology manufacturers should develop regionalised component sourcing and implement flexible technology roadmaps that can adapt to trade policy fluctuations ensuring environmental commitments remain viable despite supply chain uncertainties.

The report highlights how leading companies are addressing ESG concerns through innovative water management approaches, with TSMC reducing water consumption by 11% through advanced recycling systems. This achievement represents growing industry recognition of the materiality of water resources, particularly as semiconductor manufacturing processes require significant quantities to maintain cooling functions and ensure product quality. Companies implementing comprehensive water stewardship strategies are demonstrating enhanced awareness of both financial materiality, through operational resilience, and impact materiality, through watershed conservation, throughout semiconductor production regions.

This analysis reveals that Apple has achieved 24% recycled cobalt integration in 22.6 million iPhone batteries, establishing new benchmarks for implementing the circular economy in consumer electronics. This material innovation addresses both supply chain resilience objectives and environmental impact considerations, requiring sophisticated materiality assessment processes that balance resource efficiency, production costs and performance requirements throughout complex technology manufacturing operations.

The report examines emerging business model innovations transforming hardware lifecycles, with Hardware-as-a-Service models gaining traction as pathways toward enhanced circularity. These approaches maintain manufacturer ownership of physical assets, creating natural incentives for extending the lifetime, repairing, and refurbishing products while satisfying evolving CSRD reporting requirements related to product lifecycle management and resource efficiency.

Looking toward future technology landscapes, the report identifies how specialised hardware, 3D chips, and advanced cooling techniques are enhancing AI workload efficiency. Nvidia's new "superchip" delivers a 30 times performance improvement while using 25 times less energy. These technological advances represent both significant opportunities for operational optimisation and essential considerations for energy management, potentially reshaping competitive dynamics across the technology hardware sector.