LARGEST CHIP CENTRE – ECONOMY
News:
With $230-bn funds, South Korea to build 'world's largest chip centre
What's in the news?
● South Korea
said it would build the world's largest chip center using $230 billion of
private investment mostly from Samsung
Electronics.
● The
plan is part of the government's drive to invest heavily in six key
technologies, including chips, displays and batteries, all areas where the
country's tech giants are well-established already.
Chips:
● Chips
are at the heart of every product
and device from automobiles to aircraft, and from motor cars to mobile phones.
Its importance is only going to increase in the coming years.
● Securing
access in advance to the latest and most powerful chips will determine the
winner in the latest technologies such as artificial intelligence,
cryptocurrency, NFT mining, 5G, etc.,
Reasons for disruption in the supply of
semiconductors:
● Supply-side constraints
due to the COVID-19 pandemic
● Overdependence
of the world on East Asia for fab manufacturing (semiconductor fabrication
plants are commonly called as “fab”).
● The
rising prices of silicon.
● The
China-U.S. trade war.
Global initiatives to resolve semiconductor shortage:
● Various
countries are trying to safeguard their interests by introducing packages to
attract more chip manufacturing.
● The
U.S. has announced a $50 billion
package to create factories
● Intel
is adding two more foundries to its Arizona campus and is also developing its
own foundry business to compete with chip-makers such as Taiwan Semiconductor Manufacturing Company (TSMC) and United
Microelectronics Corporation (UMC).
○ TSMC,
which controls 24% of the semiconductor supply chain, is setting up a $12
billion facility in Arizona.
● Japan and Germany
have got TSMC to start specialty technology fabs in their countries.
Initiatives by India:
● India
has approved a $10 billion package
to incentivise the manufacturing of semiconductors in the country.
● The
government has announced a list of incentives to attract leading international
manufacturers to set up their manufacturing units in India.
● Production-linked
incentive (PLI) scheme for semiconductor and
display board production has been allocated ₹76,000 crores.
● Chips to Startup (C2S)
Programme: The Program aims to train 85,000
high-quality and qualified engineers in the area of Very-large-scale
integration (VLSI) and Embedded System Design.
● Design Linked Incentive
(DLI) Scheme: The scheme aims to nurture at least
20 domestic companies involved in semiconductor design and facilitate them to
achieve a turnover of more than ₹1500 crores in the next 5 years (2022-27).