What is semiconductor chip crisis?

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Introduction¬† –

America’s Silicon Valley, which is the main office of the technology sector, we get to see in this area for the last seventy years, in which we get to see important tech companies like Intel and Apple. In India, we have seen a significant decline in the economy since 2019 due to Corona, it has suffered a lot due to the closure of production companies for a long time and the supply chain has become completely unbalanced.

Information and technology revolution This has been the biggest revolution of this century, which has changed the whole world, mainly computer , mobile and artificial intelligence, it has been the main leader. For this, we can mainly divide it into two parts, software and hardware, in which America is considered the leader, Taiwan and South Korea, it has become the major producer producer today.

We will try to analyze what is the Semi Conductor Industry and what is Semi Conductor Crisis. Most of the budget for India’s crude oil had to be spent, which we may have to spend for semiconductor semiconductor in the coming future. India is completely dependent on rectangles for semiconductors and this is a very dangerous situation from the economic and political point of view.

  • NVIDIA Corporation -USA
  • TSMC -Taiwan
  • SAMSUNG Electronics – South Korea
  • ASML Holdings – Netherlands
  • INTEL Corporation – USA
  • Texas Instruments – USA
  • Advance Micro Devices (AMD) – USA

A Semiconductor is the mind of computer and mobile, which analyzes and answers any question like a human, keeps data stored which we call memory storage. First of all, we got to see this through transistors in things like radio, which in today’s very developed form we get to see in things like mobiles.

It is also called silicon chip because this silicon is made from this lightweight natural material which is very light and low and very efficient. This chip became smaller and more powerful and effective, which is used in today’s mobiles, modern vehicles and computers.

In electronic items, this semiconductor chip is used for all electronic items from all the electronic items in the house to NASA rockets. Due to which, through software and hardware, we get to see internet, website, artificial intelligent, and vehicles without engine. In the coming future, we are going to see many more changes in information and technology very fast.

Intel has been the world’s largest producer for the last fifty years, but at present, the Taiwanese company TSMC is considered the largest producer in this field today. In the Corona crisis, Intel is also unable to meet the demand of semiconductors of customer companies and for this it is fulfilling some of its orders from TSMC. From computers to mobiles, rockets and vehicles, there is no such area where semiconductors are not used.

In America, he started his semiconductor business from today’s Silicon Valley for the first time in 1947, in which the main company was Intel, which later fell far behind, in which his failed deal with Apple has been the most important reason. Companies such as Samsung and TSMC have outperformed Intel in terms of production and costing, and 90% of the production is done by the TSMC company.

Semiconductor mainly consists of three levels of design – production – and sales in which companies like Apple outsource their mobile making to reduce their cost, in which Foxconn company and TSMC companies play a significant role. Because there is a lot of investment and risk to establish this business, so few players have established dominance in this business.

A Semiconductor foundry takes a long time to set up and start production and its production had to be stopped for a long time due to the 2019 corona pandemic. In almost all the countries in the world, we have got to see the lockdown, due to which the demand for electronic items has increased a lot.

Situations like online education, work from home, online gaming, online shopping and online banking have changed the life of human beings, due to which the demand for electronic goods has increased a lot. Due to which we get to see an increase in the demand for semiconductors. We get to see very few companies in this field. Countries like America and India have started making policies on it and have started planning for it in future.

Due to which a lot of money has to be invested to start this business, yet there is no guarantee, so we get to see very few companies in this field. The biggest impact we see on the auto sector is the low production of semiconductors, the production of an electronic vehicle and the impact on the production of vehicles, the auto sector is suffering huge losses.

For the first time a large-scale attempt was made in India for the production of semiconductors through the HCL company in 1981, but that effort failed. The reason for this is that starting a company in this field is a very risky task. Semiconductors are manufactured at three levels and in the whole world in 2021 this area market is 439 billion US dollars.

This market is going to grow very fast in the future and it is considered a very important part for information and technology. To start a semiconductor company, it costs at least 10 billion US dollars and a lot of money has to be spent for modification.

Electricity and pure water and very highly educated engineers are available in basic facilities, which India is not providing at present. Even after this, there is no guarantee of profit and it is very difficult task to compete in the market with the companies which have been in this field from the past.

Therefore, all the countries are making efforts to remove the dependence of semiconductor and due to low productivity of today’s semiconductor its importance is becoming more important than oil and gas. The US has given a package of US $ 52 billion to the companies to set up a plant in America, in which TMSC company is going to start its plant.

Semiconductor is the three important process in which design is the first process for which 3-5 percent is spent in which Apple, Samsung, Google and Huawei company of China do this work and Fabrication of chip is the most expensive process for which 30-50 percent is spent, so most of the companies outsourcing this work, in which Apple company and Intel also outsource some of their chips to the fab company.

Competing in semiconductor fab is a very difficult task, for which a lot of investment has to be made, so Samsung and TSMC companies have established their dominance in the fabrication plant and in which both these fab companies are working on a small chip like 5 nanometers. And with its efficiency, it is becoming a master company in this field.

A lot of money has to be invested for semiconductor fabrication plant and the chances of success are very less, so Samsung and TSMC companies are not very competitive in this sector and these companies have gained a lot of experience in this sector from the last few decades. . On modification and to increase production, this company is expanding itself, especially TSMC company is expanding its plant in America.

IP is of great importance for proposing dominance in the semiconductor field because technology is very important in this field which is very short lived and changes from time to time for which a lot of money has to be spent for modification. Companies do not get any benefit by producing a chip which has lagged behind in the technology market, so making a modern semiconductor with technology is an important task of companies in this field.

That’s why not many companies can survive in this field, where changes happen very fast and even after investing a lot of money, there is no assurance that your product is ready to be sold in the market. Therefore, companies do not spend much for the design, but up to 50 percent have to be spent for the fabrication of the chip, so many companies outsource the work of fabrication.

Companies like Google, Samsung and Amazon make their own semiconductors, but they have to be very expert to make modern ones like TSMC, in which they have become very expert. Through technologies like 5 nanometer and 3 NATO meter, it is proving its dominance in the market with its intellectual property by making the smallest chip and because of its business secret, it is the best company in the semiconductor fab sector.

For the past two decades, there has been an economic and political war between the US and China, under which China’s most important technology company Huawei was banned for violating patent protection, which has resulted in China’s information and technology sector. This ban of America has been politically motivated, it is believed by many politicians.

Most importantly, the world’s largest producer of semiconductors, which produces 90 percent of the world’s production, is a Taiwanese company. The political conflict of China and Taiwan has been going on for the last several years and America’s influence is increasing on Taiwan’s politics and we are getting to see America’s struggle.

China has developed itself a lot in the mobile sector and other electronic production, due to which it has been very successful in export and in the coming days it is going to become the world’s largest economy. Due to this, this is a big blow to the influence of America around the world, so it wants to control the production of semiconductor itself through economic sanctions and close to Taiwan.

In the case of semiconductors, India is completely dependent on imports and this is an obstacle to India’s development from the economic and political point of view, so the Government of India has announced a package of Rs 76000 crores to encourage private companies. In 1981, India tried to enter the semiconductor industry through HCL company but it failed.

Despite having a big giant business like Tata Group, Reliance in India, we have not been able to establish any company in the semiconductor sector in India. Today, we semiconductor is completely dependent on foreign companies. Setting up such a company requires a lot of investment and yet there is no guarantee that the business will be successful.

We are looking at this very important issue from the point of view of India. This has been the biggest problem for the companies of this sector to increase the continuous electricity, pure water availability and government. We have made some business agreements with Taiwan for this, under which they are interested in setting up some semiconductor plants in India.

It takes at least ten billion US dollars to start any semiconductor company and no one wants to take this risk in India.

Due to Corona in India, the most impact has been on the auto sector because on one hand the change in the auto sector to electric vehicles and on the other hand the problem of import of semiconductors, this business is struggling with this crisis. Due to the shortage of semiconductors, its prices have increased a lot all over the world, due to which we see the price of vehicles increased.

In the auto sector, vehicles are becoming more dependent on electronic systems, with features like power steering and the introduction of electronic vehicles, the old engine system has completely changed, due to which the vehicle is becoming an electronic gadget like a mobile. This means that we will see a lot of rapid technological changes in the auto sector in the future like Android mobile.

Companies like General Motor and Ford in the US have had to reduce their production due to semiconductor shortage and the same solution is being seen in India. Be it two wheeler or four wheeler, we have to pay more money and look for vehicles. Due to the government’s policy of electronic vehicles, this demand is going to be very high in the future, so India should be self-reliant for this, its initiative has started.

In the mobile field, we get to see the base, advanced technology in semiconductor, which is important because a company like Apple is giving so many modern facilities in its mobile to the people, whose important reason is semiconductor technology, in which companies like TSMC and Samsung are the world’s smallest semiconductor chip. Bringing in the market, which is a very difficult task for another company to make.

The smaller the chip, the more efficient and modern it will be for which this company spends a lot of money for modification. Patent and its protection This matter is the most important issue of this industry to keep its influence on the market, so TMSC this company tries to keep a lot of security in it. According to companies like Apple, they have to keep themselves updated and most of the microchips in mobile companies are installed by this company.

Even before this, there is a lot of dependence on China among mobile manufacturing companies in India and most of the customers are from China’s mobile companies, in which semiconductor chips are completely dependent on imports, which are used for home mixers to any rocket of ISRO, so India Wants to become self-sufficient in this but it is not that easy.

  • To start a semiconductor business, the initial investment is at least 10 billion US dollars to start with such a huge amount.
  • Efficient employees, pure water, efficient electricity, and continuous improvement are the important characteristics of this company.
  • Companies like Intel, TSMC and Samsung are considered to be the proposed companies in this area and 90% of the production is done by TSMC in terms of production.
  • Chip design, foundry and sales are the processes of this semiconductor company.
  • It takes a lot of time to start a semiconductor company and start its production, even after that there is no guarantee that the chip is suitable for the market.
  • Apple takes its chip from TSMC according to the programming and technology of its microchip only for Apple mobiles.
  • A microchip maker like Intel is making microchips from TSMC today because Intel has taken this decision to fulfill its orders due to its lack in the market.
  • This industry is estimated to be worth US$ 439 billion in 2021 and it is going to grow very fast in the future.
  • India is completely dependent on foreign countries for semiconductors, so the Government of India has decided to provide 10 billion US dollar facility to every company coming to India for this.
  • TSMC, which is the largest company in the field of semiconductor is taking initiative to start its production in India.
  • In view of the semiconductor crisis by the US, US $ 52 billion has been initiated to companies, under which TSMC, this Taiwanese company is also starting its production in America.

Conclusion –

Despite having big companies like TCS, INFOSYS, Reliance in India, till date, no one has tried to take the initiative for semiconductor production. The most important reason for this is that the situation regarding India’s electricity is considered very bad and the problem of pure water is seen in India for a long time. Efficient Employees and Modifications It is considered to be an important part of the company in this sector, which is largely lacking in India.

In 1981, we got to see the initiative in the matter of technology in India through this company HCL which failed due to these major issues. We have not seen any company in this field in India till date due to the high investment and very low chances of success being the specialty of this business model. We have got to see the auto sector most affected by the semiconductor crisis in India.

Here we have tried to study what is the specialty of semiconductor and in the coming future we will see this important requirement from oil and gas, which we get to see in every electronic item. We use it through software and hardware in things like computers and mobiles, in the same future we will see it through automation.

Why China developed faster than India?

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