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Ib cs final12
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Ib cs final12

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Chip industry flourishing in India and other Asian Countries.

Chip industry flourishing in India and other Asian Countries.

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  • 1. Emergence of Chip Design Industry in AsiaGroup MembersNeha Gupta 67Sandhya Shrivastava 58Nikita Jain 70Ankita Singh 83Krishna Rana 79Jay gandhi 66Manisha Bharadwaj 35
  • 2. Presented by: Neha Gupta – 67 Sandhya Shrivastava – 58
  • 3. What is a chip? Chip: A small piece of semiconducting material on which an integrated circuit is embedded. It contains millions of electronic components Integrated circuit design involves the creation of electronic components, such as transistors, resistors capacitors and the metallic interconnect of these components onto a piece of semiconductor, typically silicon.
  • 4. Biggest producers and Consumers of Chip Producers  United states  South Korea  Japan  China  France/Italy Consumers  India  China
  • 5. Factors responsible for moving of chip Industry to Asian Countries  Pull Factor  Cost  Demand  Policies
  • 6. Annual cost of employing a chip design engg.Location Annual costUS 300000Canada 150000Ireland 75000Republic of Korea <65000Taiwan Province of China <60000India 30000China – Shanghai 28000China - Suzhou 24000
  • 7. Continue…… Push Factors- A number of factors in developed countries are also greatly contributing to pushing firms to expand chip design in Asia, these are:  Changes in Design methodology and organization (miniaturization, PLC, convergence)  More outsourcing and multiple design interfaces (Table)  Changing skills requirements
  • 8. Network comprising of following players: A Chinese system co. for the definition of the system architecture An electronic manufacturing supplier from the Taiwan Province of China A US integrated device manufacturer A European ‘silicon intellectual property’ firm Design houses from the US and Taiwan Province of China Foundries from Taiwan Province of China, Singapore, and China Chip packaging companies from China Tool vendors of design automation and testing from the US and India Design support service providers from various Asian locations
  • 9. Continue…. Enabling Factor  New ICTs – help vertical networks communicate  Spread of transnational knowledge communities
  • 10.  Q. In your opinion which of the trade theory is most appropriate to explain the shift of chip designing to India and other Asian countries? Give reasons to justify your answer.
  • 11. Firm strategy, structure & rivalry Factor Demandconditions conditions Related & supporting industries
  • 12. Factor conditions Skilled labour – Talent pool Demand conditions Market size China: world’s largest market for telecom equipment (wired & wireless) & critical test bed for 3G sophistication
  • 13. Related & supporting industries A Chinese system co. for the definition of the system architecture An electronic manufacturing supplier from the Taiwan Province of China A US integrated device manufacturer A European ‘silicon intellectual property’ firm Design houses from the US and Taiwan Province of China Foundries from Taiwan Province of China, Singapore, and China Chip packaging companies from China Tool vendors of design automation and testing from the US and India Design support service providers from various Asian locations
  • 14. Firm strategy, structure & rivalry Progress in manufacturing technology Convergence of digital computing, communication, and consumer devices Product life cycles have been reduced Vertical specialization: Disintegration in the design value chain & dispersing it geographically
  • 15. Government A powerful tool in driving innovation Legal Tax rebates frameworkEducation Regulations Infrastructure IPR
  • 16. QUESTION Evaluating the Emergence of the Chip design Industry to Indian and other Asian Countries on the basis of the following theories ?
  • 17. INTERNATIONAL TRADE THEORIES Theory of Factor Country Internationalcomparative endowment similarity product life advantage theory theory cycle theory
  • 18. Theory of comparative advantage David Ricardo: Principles of Political Economy, 1817. Country should specialize in the production of those goods in which it is relatively more productive... even if it has absolute advantage in all goods it produces. As per case : The production of chip design products were relatively good in US , Europe and Japan.
  • 19. Factor endowment theory A country’s relative endowments of land, labor, and capital will determine the relative costs of these factors Factor costs will determine which goods the country can produce most efficiently. As per case: Since Asia was the fastest growing market for electronic design automation tools. Diverse range of functions From routine work to highly strategic tasks.
  • 20. Country similarity theory Most trade today occurs among high-income countries because they share similar market segments and because they produce and consume so much more than emerging economies As per case, India and china As per World Investment report 2005 – Annual cost of employing a chip design engineer, 2002. was comparatively low in these two Asian countries
  • 21. International product life cycle theory Companies will manufacture products first in the countries in which they were researched and developed, almost always developed countries Over the product’s life cycle, production will shift to foreign locations, especially to developing economies as the product reaches the stages of maturity and decline through FDI. As per case, Chip Design industry moved from US Europe and Japan towards the developing countries ( East Asia). Developed nation is now importing more from Chinese as it has become third
  • 22. Recommendations Training & Education Incentives Infrastructure
  • 23. Thank You!!

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