More Domestic Chip-Making Means
More ‘Forever Chemicals’Mark Newman, CEO of Chemours, the only American PFA manufacturer, says the company
is ramping up production to meet the demands of reshored semiconductor fabrication.
AMY FELDMAN, FORBES STAFF

October 5, 2023 • Online Edition“Ibrought some show-and-tell,”Mark Newman, CEO of chemical
maker Chemours, told Forbes
during a recent interview in a
midtown Manhattan conference
room. He pulled a valve assembly out of abag. The innocuous piece of plastic, he explained, is made of fluoropolymer known as
PFA — a type of controversial “forever chemical” and an essential tool in the productionof semiconductors.
“You cannot make chips without a whole
PFA infrastructure,” he said. “We estimatethat in a modern-day fab, there’s a half-kilo
of PFA in every square foot. So in a 400,000to 600,000-square-foot fab, that’s 200 to
300 metric tons of this stuff.”
It’s not just valves, of course, but all typesof pipes, tubes and pumps in semiconductor
equipment. Fluoropolymers are particularly
key for filtering out small particles from fluids
during chip production. Few factories need
to be as clean as chip fabs, where particles
as tiny as human skin cells can contaminate
production. Chemours’ PFA is in much of that
equipment and material, providing a big,and largely unseen, part of a semiconductor
fab’s processes.
Wilmington, Delaware-based Chemours,a spinout of DuPont, is the only U.S. manufacturer of PFA. For Chemours, advanced
materials including fluoropolymers represent roughly one-quarter of its total $6.3
billion (latest 12-months revenue) business,nations like China for critical technology.
Chips are essential not just for our phones
and computers, but also for medical devices
and fighter jets. “Geopolitics has been defined by oil over the last 50 years,” Intel CEO
Pat Gelsinger said at an MIT event earlier thisyear. “Technology supply chains are more
important for a digital future than oil for thenext 50 years.”
But our insatiable desire for electronic
devices and American policymakers’ pushfor more domestic manufacturing of semiconductors relies on the industry’s access tolarge amounts of “forever chemicals.”Ongoing Litigation
Mark Newman, President and CEO
COURTESY OF CHEMOURS

with refrigerants and titanium dioxide, usedin paints and aerospace coatings, making
up the bulk of the rest. Within that, semiconductors are part of its performance-solutions
segment, which accounted for $493 million
in sales for 2022, up 53% from $322 million in2020. On its website, Chemours says flat-outthat “without PFA, domestic semiconductor
manufacturing would not be possible.”
Last year, President Biden signed into law
the CHIPS Act, which provides $52 billion
in funding to spur domestic semiconductor manufacturing with a goal of improving
national security by decreasing reliance on

Forever chemicals, or PFAS, comprisethousands of synthetic chemicals. They’relong-lasting and resistant to heat, corrosion and moisture, making them popular fora variety of products that include nonstickpans, stain-resistant upholstery, firefighting foam — and semiconductor production. Studies, however, have linked PFAS toa variety of diseases, including cancers andreduced immune system response, as well as
to contaminated groundwater, air and soilthat can lead to a host of health problems.
PFAS are an enormous category. Fluoropolymers, like those that Chemours manufactures for industrial uses, are just one class.
Litigation over their impact is ongoing.
In June, Chemours, along with DuPont andanother spinoff, Corteva, reached a $1.2

billion settlement with public water systems.
Meanwhile, legislators and regulators havebeen cracking down on the chemicals’ use,
particularly in consumer products such as
clothing, furniture and textiles, where they
can be more easily replaced. Minneapolisbased 3M, which in 2018 agreed to pay $850
million for damaging drinking water andnatural resources in the Twin Cities area,
announced that it would cease productionof PFAS by the end of 2025.
The semiconductor industry has pushed
back against regulations here and in Europe, where regulators had proposed aban on PFAS. When the U.S. Environmental
Protection Agency asked for comments ontightened oversight on PFAS earlier this year
by revoking certain low-volume exemptions,the microelectronics trade group SEMI
called it “catastrophic” for domestic chip
manufacturing. In a letter to the EPA, it said
that such a rule “would significantly hamper
the domestic semiconductor industry
despite express goals of the Administration
to the contrary and to the detriment of theU.S. economy.”

anyun Wang, a scientist and PFAS researcher with EMPA-Swiss Federal Laboratories forMaterials Testing and Research. “There’s a
lot of resistance from the industry because,of course, if we want to do the change, itcosts.” That’s especially problematic if theUnited States and the European Union impose regulations and other parts of the world
do not. However, he said, such regulations
could be designed to spur new innovations.
“The semiconductor industry has a lot ofR&D power,” he said.
In July 2015, when industrial giant DuPont
spun off its performance chemicals divisionand named it Chemours for “chemistry” plus
the “Nemours” part of DuPont’s full name,the new company was saddled with debt
and potentially toxic assets. “I think investors
were worried if we were going to be solvent,”
then-CEO Mark Vergnano told Fortune in2016. “Were we going to make it through thisor not?” Vergnano proceeded to pull off adramatic turnaround by slashing costs, selling off non-essential businesses and gaining
market share for its refrigerants business.

Doubling Down

Newman, who had been the company’schief financial officer during those years
and is one of the country’s top Black executives, became CEO in 2021. The company’s
revenue ballooned to a peak of $6.8 billion in
2022, driven by strong pricing. Its advanced
performance materials business, which includes the Teflon lineup of fluorine chemicals, gained price increases of 18% andreached total sales of $1.6 billion as it focusedon high-tech markets including advanced
electronics and clean energy.
The semiconductor industry “didn’t want
to use fluoropolymers, not because they
were concerned about them, but because
fluoropolymers are expensive,” said Gerardo
Familiar, president of Chemours’ Advanced
Performance Materials division, which includes fluorine chemicals. But alternatives
have been scarce because of fluoropolymers’ resistance to corrosion and ability towork at high temperatures and to last for along time. He said that fluoropolymers like
PFA are “substances of low concern,” andthat they should be considered differently
than PFAS. “Those materials last a very, very,very long time, but they make your manufacturing very, very, very safe for the people who
are there because you don’t have an issue

In this landscape, Chemours’ Newman isdoubling down. In a wide-ranging interview
with Forbes during a trip to New York for Climate Week, Newman said that the $4 billion(market cap) company was expanding production of fluoropolymers, driven by the critical need for the chemicals in semiconductors and electric vehicles. Further, he said,
such production could be done safely withinvestments that his company is making. Ithas, for example, invested more than $100
million in emissions control technology at its
Fayetteville, North Carolina plant.
“We’re currently sold out and working toexpand capacity here in the United States,”
Newman said. Chemours plans to enlarge
its West Virginia production facility, he said.
Located just across the river from Ohio, thefactory is well positioned to supply Intel’s
giant chip fab near Columbus, now underconstruction. “Imagine making something
for the semiconductor industry in what
people think of as coal country,” Newman
said. All told, the company is investing up to$1 billion in fluoropolymers, including thosefor use in semiconductors.
The combination of reshoring and PFAS
is “a very complicated discussion,” said Zh-Big Expensewith corrosion,” he said. The conundrum, hesaid, is how to manufacture them responsibly and what to do with the materials at theend of their life.
Some smaller companies are working on
replacing PFAS in electronics manufacturing. Danvers, Massachusetts-based Transene, a privately held business founded in
1965, partnered with Toxics Use Reduction
Institute (TURI) researchers at University ofMassachusetts Lowell to develop alternatives for its etching solutions used in thesemiconductor industry. The vast majorityof customers have made the switch, andothers are working through their qualification process. “You keep hearing from theindustry, ‘We need 10 or 15 years to make achange,’” said Greg Morose, research professor at UMass Lowell and research manager at TURI, who worked with Transene.
“We basically did the research in 18 months,
which is really rapid.”

Phasing Out PFAS
But that’s just one small company, andone use of PFAS within a semiconductor fab.
David Zamarin, founder of venture-backed
DetraPel, which works on sustainable coatings for food packaging and textiles, said hereceived inquiries from semiconductor andelectronics manufacturers, but that the cost
and time didn’t make it economically viable.
In the electronics industry, even companies
that have set goals of getting rid of PFAS
are moving slowly. Apple, for example, haspromised to “thoughtfully phase out PFAS in
a way that does not result in regrettable
substitutions.”
Newman said that fluorine chemicals canbe made responsibly. Chemours has committed to eliminating at least 99% of PFAS airand water emissions from its manufacturing
processes by 2030. Chemours is also working on sustainable technologies, he said,
such as renewable membranes for greenhydrogen production marketed under theNafion brand name and low-global-warming refrigerants for heating and coolingbuildings.
“We felt because of our legacy we needed to lean into this mantra of being a different kind of chemistry company and showcasing the fact that we could be a leader
in emissions reduction,” Newman said. “Ourchemistry really enables a lot of the future
economy.”(#S0117980) Reprinted with permission of Forbes Media LLC. Copyright 2023. For more information about reprints and licensing, visit www.parsintl.com.