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News

   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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