Emergence of Chip Design    Industry in AsiaGroup MembersNeha Gupta            67Sandhya Shrivastava   58Nikita Jain      ...
Presented by: Neha Gupta – 67 Sandhya Shrivastava – 58
What is a chip? Chip: A small piece of semiconducting material on which an integrated circuit is embedded. It contains mi...
Biggest producers and Consumers of Chip Producers   United states   South Korea   Japan   China   France/Italy Cons...
Factors responsible for moving of chip Industry              to Asian Countries  Pull Factor     Cost     Demand     P...
Annual cost of employing a chip design engg.Location                   Annual costUS                         300000Canada ...
Continue…… Push Factors- A number of factors in developed countries are also greatly contributing to pushing firms to exp...
Network comprising of following players: A Chinese system co. for the definition of the system    architecture   An elec...
Continue…. Enabling Factor    New ICTs – help vertical networks communicate    Spread of transnational knowledge commun...
 Q. In your opinion which of the trade theory is most appropriate to explain the shift of chip designing to India and oth...
Firm strategy,              structure &                 rivalry  Factor                       Demandconditions            ...
Factor conditions Skilled labour – Talent pool                Demand conditions Market size China: world’s largest mark...
Related & supporting industries A Chinese system co. for the definition of the system    architecture   An electronic ma...
Firm strategy, structure & rivalry Progress in manufacturing technology Convergence of digital computing, communication,...
Government                         A powerful                       tool in driving                         innovation    ...
QUESTION Evaluating   the Emergence of the Chip design Industry to Indian and other Asian Countries on the basis of the f...
INTERNATIONAL TRADE THEORIES Theory of      Factor     Country     Internationalcomparative   endowment   similarity    pr...
Theory of comparative advantage David Ricardo: Principles of Political Economy, 1817. Country should specialize in the p...
Factor endowment theory A country’s relative endowments of land, labor, and capital  will determine the relative costs of...
Country similarity theory Most trade today occurs among high-income countries  because they share similar market segments...
International product life cycle theory Companies will manufacture products first in the countries in  which they were re...
Recommendations Training & Education Incentives Infrastructure
Thank You!!
Ib cs final12
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Chip industry flourishing in India and other Asian Countries.

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Ib cs final12

  1. 1. Emergence of Chip Design Industry in AsiaGroup MembersNeha Gupta 67Sandhya Shrivastava 58Nikita Jain 70Ankita Singh 83Krishna Rana 79Jay gandhi 66Manisha Bharadwaj 35
  2. 2. Presented by: Neha Gupta – 67 Sandhya Shrivastava – 58
  3. 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. 4. Biggest producers and Consumers of Chip Producers  United states  South Korea  Japan  China  France/Italy Consumers  India  China
  5. 5. Factors responsible for moving of chip Industry to Asian Countries  Pull Factor  Cost  Demand  Policies
  6. 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. 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. 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. 9. Continue…. Enabling Factor  New ICTs – help vertical networks communicate  Spread of transnational knowledge communities
  10. 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. 11. Firm strategy, structure & rivalry Factor Demandconditions conditions Related & supporting industries
  12. 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. 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. 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. 15. Government A powerful tool in driving innovation Legal Tax rebates frameworkEducation Regulations Infrastructure IPR
  16. 16. QUESTION Evaluating the Emergence of the Chip design Industry to Indian and other Asian Countries on the basis of the following theories ?
  17. 17. INTERNATIONAL TRADE THEORIES Theory of Factor Country Internationalcomparative endowment similarity product life advantage theory theory cycle theory
  18. 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. 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. 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. 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. 22. Recommendations Training & Education Incentives Infrastructure
  23. 23. Thank You!!

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