Roadmap for Answer Writing Introduction Begin with a brief overview of the global semiconductor supply chain, emphasizing its importance in the modern technological ecosystem. Mention the key role of semiconductors in powering various technologies, including AI, quantum computing, and IoT. Section 1: Interdependence and ...
Model Answer Footloose Industries Footloose industries are those that are not bound to any specific location and can be established anywhere, regardless of the availability of raw materials. Examples include information technology (IT), software development, and consulting services. These industriesRead more
Model Answer
Footloose Industries
Footloose industries are those that are not bound to any specific location and can be established anywhere, regardless of the availability of raw materials. Examples include information technology (IT), software development, and consulting services. These industries typically rely on a highly skilled workforce, are not heavy on raw materials, and have minimal environmental impact.
Factors Influencing the Location of Footloose Industries
- Access to Skilled Labor: Footloose industries require a highly educated and skilled workforce. For example, the IT industry in India is concentrated in cities like Bangalore and Hyderabad, which have large pools of skilled professionals.
- Infrastructure: Availability of communication networks, reliable power, water, and technology is crucial for these industries.
- Cost of Living and Business: Locations with lower living and operating costs attract these industries, helping reduce overall expenses.
- Government Incentives: Tax breaks, subsidies, and grants can encourage industries to set up operations.
- Quality of Life: Good living standards and amenities help attract talent to such locations.
- Transportation: Good transportation links facilitate global connectivity with clients and suppliers.
By focusing on these factors, footloose industries can thrive even in areas without traditional locational advantages.
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Model Answer The global semiconductor supply chain is highly interdependent and concentrated, with production dominated by a few large players. This structure has evolved over decades, bringing innovation and cost savings, but also creating vulnerabilities. Market Concentration: A handful of companiRead more
Model Answer
The global semiconductor supply chain is highly interdependent and concentrated, with production dominated by a few large players. This structure has evolved over decades, bringing innovation and cost savings, but also creating vulnerabilities.
Market Concentration: A handful of companies control more than 50% of the global semiconductor market. Companies such as Samsung, Intel, and Qualcomm are major players in chip production, making the supply chain dependent on a few firms. This concentration limits competition and increases the risk of disruption if any of these companies face operational challenges.
Geographical Division: Different countries and regions specialize in distinct parts of the semiconductor supply chain, contributing to global interdependence. For instance:
Collaboration in R&D: The semiconductor industry is one of the most research and development-intensive sectors. Major firms often collaborate to drive innovation. For example, ASML, Intel, Samsung, and TSMC teamed up to develop extreme ultraviolet (EUV) lithography, a technology crucial for producing advanced chips.
Risks and Vulnerabilities in the Semiconductor Supply Chain
Several risks and vulnerabilities stem from the interdependence and concentration of the semiconductor supply chain.
Natural Disasters: The geographic concentration of manufacturing in regions like Taiwan and the USA exposes the supply chain to disruptions caused by natural disasters. For example, in 2021, a severe winter storm in the USA and a drought in Taiwan led to significant supply shortages.
Geopolitical Tensions: Countries with strategic control over semiconductor technologies may impose export controls, impacting global access. In 2023, the US, Japan, and the Netherlands imposed restrictions on semiconductor equipment exports to China, raising concerns over supply chain stability.
Global Pandemics: The COVID-19 pandemic highlighted how pandemics can disrupt both supply and demand in the semiconductor industry. Factory shutdowns and surges in demand for electronic devices created significant supply shortages.
Conclusion
While the specialized and concentrated semiconductor supply chain has delivered substantial value, it also presents risks that need to be managed through policies that balance the benefits of scale with resilience to disruptions. The vulnerabilities, such as natural disasters, geopolitical tensions, and pandemics, must be addressed to ensure continued stability and growth in this critical industry.
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