Executive Vice President, Matt Adams, testified on behalf of Electronic Fluorocarbons on Thursday, June 3, 2021 at the EPA Hearing “Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program under the American Innovation and Manufacturing Act”. Addressing a group of nearly three hundred stakeholders, Adams’ focus was on identifying gaps in the Agency’s ruling on the AIM Act’s allowances to the semiconductor industry as well as educating on the intricacies of their supply chain.
Electronic Fluorocarbons believes that the initial ruling by the Agency on the allowances allotted to the semiconductor industry as a result of the AIM Act’s goal of reducing hydrofluorocarbons (HFCs) is not inclusive to the scope of the semiconductor industry’s supply chain, and does not account for the guaranteed growth of the industry, and as a result, use of HFCs, through the CHIPS for America Act.
ELECTRONIC FLUOROCARBONS TESTIFIES ON AIM ACT RULING AT EPA HEARING
[HOPKINTON, MA, June 3, 2021]–“My name is Matt Adams and I am the Executive Vice President of Electronic Fluorocarbons. I have over 27 years of experience supplying materials to the Semiconductor industry. In addition, Electronic Fluorocarbons has been a domestic supplier to the semiconductor industry for twenty years. Our place in the supply chain is integral: taking the producer’s HFCs, which we consider to be a raw material, and purifying them to remove impurities using world class technology. The removal of key impurities to parts per million levels and lower enables the raw material HFC products to be used for high purity semiconductor applications, meeting the stringent requirements of the semiconductor manufacturers. At this time, neither the producer(s) nor the end user(s) are capable of performing this function. Etching gases defined in the AIM act as HFC-41, HFC-32, HFC-23, HFC-236ea, among others, must first be purified by a company like Electronic Fluorocarbons before they are used for semiconductor manufacturing. The technology employed by the semiconductor manufacturers is extremely complex and has been developed and perfected over many years. The complexity of the technology used for semiconductor chip etching does not allow semiconductor manufacturers to quickly change their processes and/or incorporate different materials or technology.
We support the goal of a reduction of global warming as we are committed to using recycling and reclaiming technology and developing low global warming potential replacement materials here at Electronic Fluorocarbons. However, we have found through discussions amongst our peers and close readings of both the AIM Act and the EPA’s initial ruling in the Federal Register, that there is a major gap in the understanding of the semiconductor supply chain in the United States. The EPA is currently within their 270-day period to make a ruling on the AIM Act passed in 2020 that calls for the phasedown of hydrofluorocarbons (HFCs) to 40% of baseline values by the year 2028. At the same time, the United States Senate is currently passing the CHIPS for America Act, a bipartisan bill that would allocate $52 billion dollars specifically to the U.S. Semiconductor Industry. These funds would unlock private capital resulting in the addition of seven to ten new semiconductor fabs in the U.S. by 2026.
The Oxford Economics report “Chipping In: The Positive Impact of the Semiconductor Industry on the American Workforce and How Federal Industry Incentives Will Increase Domestic Jobs” found that there are currently close to 300,000 high paying jobs in research and development, design, and manufacturing across 49 of our 50 states that support 1.6 million additional jobs across the United States Economy. This study projects that the federal funding would bolster an average of 185,000 American jobs and an additional $24.6 billion annually into the U.S. Economy through 2026. President Biden and his administration have backed this effort, calling for an audit on the Semiconductor Industry and its supply chain through the Department of Commerce, which we can expect to be published later this month.
The AIM Act has defined, as cited in Federal Register Vol 86 No 95 page 27166 under category “B”, production and consumption baselines for HFC phasedown as 375 and 299 million metric tons of exchange value equivalent, respectively. This baseline does not count for the guaranteed growth in the market with the addition of these new semiconductor fabs. In addition, newer technologies are moving to vertical structures, such as Gate All Around and 3D NAND. These newer technologies use significantly more HFC materials per wafer beyond the current projections.
Our long-range customer forecasts anticipate consumption by the semiconductor manufacturers to grow in the upcoming years. Using this data to anticipate consumption with the addition of the semiconductor fabs created through the CHIPS act, the Agency can guarantee that the reduction of HFCs at the rate defined in their initial ruling, with allocations given based on their highest production years from 2017-2020, would collapse the domestic semiconductor industry long before the United States could see any benefit from the CHIPS act. Failure of the Agency to anticipate this rapid growth and understand the intricacies of the supply chain will shut domestic semiconductor fabs down.
Allocations must be created with national security in mind. Electronic Fluorocarbons proposes that the Agency work collaboratively with all facets of the semiconductor supply chain, including technology enabling purification companies, to create a robust model for the semiconductor industry before the October 1 deadline. Failure to do so could result in catastrophe for this multibillion-dollar industry, leading the way for foreign entities to control the market and future technology.
As a registered Small Business, Electronic Fluorocarbons will be providing a formal written comment along with this statement within the Agency’s allotted time frame. Thank you for your time and consideration.”