PwC Sounds Alarm: Global Chip Production Faces Crisis as Copper Supply Chains Crumble

Copper shortages threaten to derail the semiconductor industry—just as demand hits record highs. PwC's latest warning exposes the fragile underbelly of our tech-driven economy.

Why copper matters more than you think

Every smartphone, EV, and AI server farm runs on this unglamorous metal. When mines stutter, fabs shudder. Now supply chain analysts spot trouble brewing from Chile to Congo.

The finance angle (because of course)

Wall Street's still betting big on chips while ignoring the commodity crunch that could vaporize those rosy projections. Typical spreadsheet blindness—tracking EBITDA while ignoring the actual materials that generate it.

Bottom line: The next tech revolution might stall before it starts. Unless manufacturers find alternatives fast, we're looking at production delays, price spikes, and another excuse for CEOs to miss their inflated guidance.

PwC urges countries to adapt to climate change

Today’s global supply chains rely on semiconductors. They are embedded in everything from computers and phones to cars and washing machines. We also need them to seize the potential of #AI, for quantum computing, and to transition to renewable energy. But the copper needed to… pic.twitter.com/299r3u4LSO

— PwC Climate (@PwCClimate) July 8, 2025

Global semiconductor leader of PwC South Korea, Glen Burn, said semiconductors are the backbone of modern technology, embedded in almost everything from computers and phones to cars. He also said that semiconductors are vital to renewable energy and unlocking the potential of artificial intelligence.

Burn urged the world to act now by managing supply risks, including climate change risks. He also noted that global firms adapt to climate change by increasing water production, strengthening climate resilience, and diversifying supply chains.

PwC disclosed that Chile, a major semiconductor industry supplier, is among the countries currently facing severe drought risks. According to the report, 17 other nations that supply the semiconductor sector are also on the brink of severe drought risks.

The accounting firm believes that more than a third of the semiconductor industry is at risk of drought disruptions by 2035. The company’s 2024 Global Investor Survey also found that 68% of investors are urging firms to work towards mitigating the risks of climate disruptions to their supply chain.

“By uncovering hidden vulnerabilities across supply chains and operations, businesses can proactively shape resilience strategies that protect value at risk – whether financial, operations or reputational. Smarter climate adaptation unlocks agility, inspires innovation, and positions companies to lead in a more volatile world.”

–Lynne Baber, Global Deputy Sustainability Leader at PwC.

PwC also believes that other chipmaking regions with copper miners, such as Brazil, Peru, the Democratic Republic of Congo, Zambia, Australia, China, Mongolia, and Zambia, are at risk. The accounting company argued that companies can mitigate the risks by inventing materials that adapt to climate change and have a more secure water supply.

The firm noted that Chile and Peru have already taken steps to maintain a secure water supply by developing desalination plants and elevating their mining operations.

PwC believes that the initiatives provide a solution but may not work for countries that don’t have access to large water bodies, such as some landlocked nations. According to the report, the risk of disruptions threatens 25% of Chile’s copper production, which may surge to 75% within a decade and to almost 100% by 2050.

IEA expects copper supply to decline within a decade

An analysis by the International Energy Agency also estimated that the supply of copper will decline by 30% by 2035 if no actions are taken. The agency’s executive director, Farih Birol, argued that developed countries could consider boosting their copper refining methods and forge partnerships with developing countries. 

According to the report, China refines the most critical minerals, such as copper, which transform the global energy sector, while other countries, such as Africa and Latin America, mine metals. IEA found that 70% of the world’s top 20 minerals required in the energy sector are processed in China. 

IEA predicts that the supply of copper will decline over the next decade, despite plummeting from the highs of 2021, triggered by the supply surge from the COVID pandemic. The firm believes that developing the production industries and trade links could boost the global supply of copper and prevent price hikes similar to those in 2021.

Birol also noted that Copper was a key concern, acknowledging that the firm had analyzed all the copper mining in Africa, Latin America, and Australia and found that the rising costs of production WOULD challenge green energy generation. He argued that governments’ rapid action, such as recycling copper and substituting copper with other metals such as aluminum, could mitigate the projected shortfall.

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