Hydrogen in Semiconductor Manufacturing: An Irreplaceable Role from Chip Technology to Green Energy Transition
VAHC R&D Team
July 23, 2026
In the era of AI and high-performance computing, the semiconductor industry faces dual pressure: producing increasingly sophisticated chips while minimizing its carbon footprint. Against this backdrop, hydrogen emerges as an irreplaceable factor – both an essential "catalyst" in the microfabrication process and a key to the industry's decarbonization.
1. The Core Role of Hydrogen in Chip Manufacturing
Ultra-High-Purity Hydrogen (typically achieving 99.999% purity – 5N or higher) is an essential industrial gas in semiconductor production. This level of purity is mandatory to prevent introducing impurities into the process that could compromise the performance and reliability of semiconductor devices.
Hydrogen participates in most critical stages of chip manufacturing, including:
| Application | Specific Role |
|---|---|
| Annealing & Passivation | Removing defects and impurities on semiconductor wafer surfaces; reducing oxide layers and contaminants to improve electrical properties. |
| Chemical Vapor Deposition (CVD) & Epitaxial Growth | Serving as carrier gas and reducing agent in thin film deposition and crystal layer growth on wafer surfaces. |
| Etching & Plasma Cleaning | Using hydrogen plasma to etch semiconductor surfaces and remove organic residues and impurities. |
| Metal Oxide Reduction | Reducing metal oxides during fabrication, particularly for materials like copper and tungsten used in semiconductor interconnects. |
| Carrier Gas | Maintaining a controlled, contaminant-free environment essential for the precision and quality of advanced semiconductor devices. |
Beyond traditional applications, Extreme Ultraviolet (EUV) lithography is significantly increasing hydrogen demand. In EUV processes, hydrogen is used to maintain the cleanliness and stability of the light source, with each EUV machine consuming over 400 liters of hydrogen per minute. This makes advanced chip fabrication plants massive "hydrogen consumers."
2. Green Energy Transition: From Imported Gas to On-Site Production
The semiconductor industry is actively transitioning from grey hydrogen (produced from natural gas, with high CO₂ emissions) to green hydrogen (produced from renewable electricity). This shift addresses both sustainability goals and supply security amid geopolitical uncertainty.
Infineon Technologies pioneered this transition by partnering with Linde to operate a PEM (Proton Exchange Membrane) electrolyzer at its production facility in Villach, Austria. The plant produces approximately 290 tons of ultra-high-purity hydrogen (99.999999% purity) annually, supplying 100% of the facility's hydrogen needs and completely replacing previous natural gas-derived supply. This "on-site" approach eliminates the cost and emissions of long-distance transportation – a crucial step in supply chain decarbonization.
A similar trend is occurring in the US, where Air Liquide is investing over US$160 million to build a low-carbon hydrogen production facility (incorporating carbon capture) in Arizona, expected to begin operations in 2028. This facility will supply hydrogen directly to a global chip manufacturer's plant, reaffirming the trend of integrating hydrogen production "at the factory gate."
Technology is advancing further with on-demand and decentralized hydrogen production models. HYDGEN, an electrolysis technology company, is partnering with Nanyang Technological University (Singapore) to develop an AEM (Anion Exchange Membrane) electrolysis system producing 99.999% pure hydrogen on-site, eliminating the need for large-scale transport and storage.
3. Breakthrough Initiative from TSMC: Turning Hydrogen Byproducts into Energy
Beyond replacing supply sources, the semiconductor industry is innovating in utilizing excess hydrogen from production processes. TSMC, the world's leading chip manufacturer, partnered with Taiwan's Industrial Technology Research Institute (ITRI) to develop a hybrid hydrogen fuel cell system, converting exhaust from EUV processes into electricity.
The 30 kW pilot system achieved 52.3% power generation efficiency and received the world's first SEMI-S2 certification for semiconductor manufacturing equipment safety. TSMC aims to develop a 150 kW system by 2025, targeting 100% recycling of excess hydrogen from EUV processes into electricity.
This initiative not only reduces waste but also creates a new circular economy model within the chip manufacturing facility.
4. Market Demand and Challenges
The ultra-high-purity hydrogen market for semiconductors is growing strongly, reflecting broader industry trends. The global market was estimated at US$150 million in 2024 and is projected to reach US$266-292 million by 2031-2032, with a compound annual growth rate (CAGR) of approximately 8.5-8.7%. The Asia-Pacific region accounts for the largest market share (~78%), with major suppliers such as Air Products, Air Liquide, and Linde Gas dominating the market.
However, cost remains the biggest barrier. A study published in Smart Energy found that completely transitioning to green hydrogen at a silicon wafer manufacturing plant could increase the Levelized Cost of Hydrogen (LCOH) from €4/kg (grey hydrogen) to €10.51/kg in a full decarbonization scenario. This cost requires significant investment in high-pressure hydrogen storage equipment and optimization of Power-to-Hydrogen (P-t-H) system design.
Nevertheless, with grey hydrogen prices expected to exceed €6/kg, on-site green hydrogen will become increasingly competitive. Combined with supportive policies and advancements in electrolysis technology (PEM, AEM), the cost gap is gradually narrowing.
5. Future Outlook: Hydrogen as a "Strategic Material" for Semiconductors
As technology nodes move below 5nm and new techniques like ALD (Atomic Layer Deposition) become widespread, purity requirements for hydrogen will become even more stringent. This will drive the development of new purification technologies and more rigorous quality control measures.
Hydrogen is no longer simply a raw material gas; it is becoming a "strategic material" that determines advanced chip production capability. Key trends will continue to shape the future of hydrogen in semiconductors:
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On-site green hydrogen production becomes the new standard for chip manufacturing plants, completely replacing fossil-fuel-derived hydrogen.
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Integration with renewable energy and storage systems to optimize costs and ensure stable supply.
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Recycling and utilizing excess hydrogen from production processes, moving toward a zero-emission circular economy model.
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Developing domestic supply chains to reduce import dependence and ensure supply security for the strategic semiconductor industry.
The semiconductor industry – long considered one of the most complex and energy-intensive manufacturing sectors – is demonstrating that it can simultaneously produce the most sophisticated chips while fulfilling sustainability commitments. And hydrogen stands at the center of that dual transformation.
Quantitative Analysis: Hydrogen Demand for Vietnam's Semiconductor Industry and Import Savings from Domestic Production
I. Vietnam's Semiconductor Development Strategy: Quantitative Targets
Vietnam's semiconductor industry development strategy to 2030, with a vision to 2050, has been approved by the Prime Minister with specific targets:
| Item | Target by 2030 | Target by 2040-2050 |
|---|---|---|
| Semiconductor industry revenue | > US$25 billion | > US$100 billion |
| Domestic value-added ratio | 10-15% | 20-25% |
| Electronics industry revenue | > US$225 billion | > US$1,045 billion |
| Chip design companies | 100 companies | 300 companies |
| Wafer fabrication plants | 1 small-scale fab | 2-3 fabs |
| Packaging & testing facilities | 10 plants | 15 plants |
| Semiconductor engineers | 50,000 personnel | > 100,000 personnel |
II. High-Purity Hydrogen Demand (99.999%+) for Vietnam's Semiconductor Industry
1. Calculation Basis
Ultra-high-purity hydrogen (99.999% - 5N or higher purity) is an essential industrial gas in semiconductor manufacturing. Advanced chip fabrication plants (wafer fabs) consume large volumes of hydrogen:
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A typical silicon wafer manufacturing plant requires approximately 110 tons of hydrogen per year.
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A 300mm (12-inch) chip fab in China consumes approximately 1,906,900 Nm³/year (equivalent to approximately 171 tons/year).
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Before EUV technology adoption, advanced logic processes consumed several Nm³ of hydrogen per wafer.
Packaging and testing plants (OSATs) consume significantly less hydrogen than wafer fabs, but still require hydrogen for cleaning and surface treatment processes.
2. Hydrogen Demand Forecast for Vietnam's Semiconductor Industry by 2030
Base Scenario (1 wafer fab + 10 OSATs):
| Item | Quantity | Hydrogen demand/plant/year | Total demand |
|---|---|---|---|
| Wafer fabrication plant | 1 fab | ~170 tons/year | 170 tons/year |
| Packaging & testing (OSAT) | 10 plants | ~15-20 tons/year/facility | 150-200 tons/year |
| Total high-purity hydrogen demand | ~320-370 tons/year |
Expansion Scenario (2030-2040 with 2 wafer fabs + 15 OSATs):
| Item | Quantity | Hydrogen demand/plant/year | Total demand |
|---|---|---|---|
| Wafer fabrication plants | 2 fabs | ~170 tons/year | 340 tons/year |
| Packaging & testing (OSAT) | 15 plants | ~15-20 tons/year/facility | 225-300 tons/year |
| Total high-purity hydrogen demand | ~565-640 tons/year |
Full Scenario (2050 with 3 wafer fabs + 20 OSATs):
| Item | Quantity | Hydrogen demand/plant/year | Total demand |
|---|---|---|---|
| Wafer fabrication plants | 3 fabs | ~170 tons/year | 510 tons/year |
| Packaging & testing (OSAT) | 20 plants | ~15-20 tons/year/facility | 300-400 tons/year |
| Total high-purity hydrogen demand | ~810-910 tons/year |
III. Economic Impact: Import Savings from Domestic Hydrogen Production
1. Imported High-Purity Hydrogen Prices
Ultra-high-purity hydrogen (99.999%+) is currently supplied by global industrial gas corporations such as Air Products, Air Liquide, and Linde. Reference prices:
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Imported high-purity hydrogen (5N): approximately US$8-12/kg (depending on contract terms, volume, and transportation/storage costs).
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Prices can be significantly higher for small shipments or long-distance transportation.
2. Domestic On-Site Hydrogen Production Costs
If Vietnam produces high-purity hydrogen domestically via water electrolysis using renewable energy:
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On-site green hydrogen production cost: estimated at US$3-5/kg (depending on renewable electricity costs and production scale).
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Net savings: approximately US$5-8/kg.
3. Import Savings Calculation
| Scenario | Hydrogen demand/year | Import cost (at US$10/kg) | Domestic production cost (at US$4/kg) | Annual Savings |
|---|---|---|---|---|
| 2030 (1 fab + 10 OSAT) | ~350 tons | US$3.5 million | US$1.4 million | ~US$2.1 million |
| 2040 (2 fabs + 15 OSAT) | ~600 tons | US$6.0 million | US$2.4 million | ~US$3.6 million |
| 2050 (3 fabs + 20 OSAT) | ~860 tons | US$8.6 million | US$3.4 million | ~US$5.2 million |
4. Important Additional Considerations
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Long-term savings could be significantly larger as imported hydrogen prices trend upward (grey hydrogen is projected to exceed US$6-7/kg), while domestic renewable-based production costs are trending downward.
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Spillover effects: Domestic hydrogen production not only saves foreign currency but also creates jobs, develops technology, and reduces dependence on imported supply chains.
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Infrastructure requirements: To produce high-purity hydrogen domestically, Vietnam needs to invest in electrolysis systems (PEM or AEM) at semiconductor industrial parks, with estimated initial investment of approximately US$2-5 million for a 100-200 ton/year system.
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Critical note: Vietnam's first chip manufacturing plant, initiated by Viettel at the Hoa Lac High-Tech Park (Hanoi), has a design capacity of 3,000-4,000 wafers/month, equivalent to approximately 100 million chips/year. The trial operation phase is expected to begin in late 2027. This serves as the foundational basis for calculating high-purity hydrogen demand for the domestic semiconductor industry.
IV. Conclusion
If Vietnam achieves domestic self-sufficiency in high-purity hydrogen (99.999%+) for the semiconductor industry:
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Demand by 2030: approximately 320-370 tons of high-purity hydrogen/year.
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Import savings by 2030: approximately US$2.1 million/year.
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By 2050, with 3 wafer fabrication plants and 20 packaging/testing plants, demand could reach 810-910 tons/year, with import savings of up to US$5.2 million/year.
These estimates are based on reference data from similar chip manufacturing facilities and Vietnam's semiconductor development strategy. Actual figures may vary depending on production technology, plant scale, and the pace of strategy implementation.
