17th Mar 09
Increasing government role in semiconductor
industry
To protect the multi-billion dollar semiconductor fabs
from serious economic problems created by present global
recession; Governments are coming forward to invest in the
semiconductor businesses in their regions and are creating
new markets. Increasing sops and subsidies are the order
of the day for semiconductor fabs.
Taiwan, whose economy is so much fuelled by the semiconductor
and electronic industry, is always ready to protect the
companies moving from bad to worse. There are reports saying
that Taiwanese Govt. is suggesting to create a merger business
of two memory makers who are on the verge of bankruptcy
by investing 30 billion NT$s.
The situation is similar to year-1998 DRAM market fall,
during which Japanese and Korean industry had followed similar
strategy of merging businesses.
Now the Japanese and Korean semiconductor industry have
diverted into non-memory semiconductor market more aggressively
to protect from sudden onslaught happens now and then in
memory business. They have learned the survival game in
the earlier bad times.
When we look at Mainland China, it's central and local
governments recently announced investments of up to US$50
billion in regional semiconductor-related projects.
The governments along with providing sops and subsidies
can also create markets.
Governments in India and China can create a huge market
overnight for various IT and telecom requirements for the
rural mass by announcing subsidized IT gadgets and phones.
In U.S., though the government is not investing the ways
its done in Asia, but its creating markets to address the
problems faced by small and medium semiconductor and electronics
companies in U.S. Recently few companies have announced
winning government contracts. Europe too follows nearly
same strategy. Few environmental and security policies of
Europe have created unique market for semiconductor companies.
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