3 Ideas For 4 Countries Hunting for Chips

News: Quad Leaders’ Summit meeting is being hosted today. One agenda item will be to announce a concrete action plan under the Semiconductor Supply Chain Initiative.

The goal of the Semiconductor Supply Chain Initiative is to strengthen the global semiconductor supply chain’s productive capacity and resilience.

Why Quad is focusing on the semiconductor supply chain?

Through this initiative, the Quad officially recognizes that the semiconductor supply chain has geo-security consequences.

The nature of the supply chain of semiconductors is hyper-global. It means a single country cannot become self-sufficient in its production.

At present, a typical semiconductor production process spans 4+ countries, 3+ trips around the globe, 25,000 miles, and 12 days of travel.

All Quad members have unique capabilities to contribute to its supply chain.

1. The US is the undisputed leader in semiconductor design, with a substantial presence in semiconductor manufacturing.
2. Japan is a powerhouse in specialised semiconductor manufacturing materials.
3. India has notable strength in semiconductor design.
4. Australia has material endowments and niche technology industries relying on rare earth elements, battery technology, and artificial intelligence (AI).

How can Semiconductor Supply Chain Initiative be strengthened?

First, build a Quad prototyping semiconductor foundry. Much of the work in the development of semiconductors depends upon the application-specific semiconductors prototypes. Which then can be sent for high-volume production.

Quad countries would contribute their relative GDP share and technological expertise. A joint R&D fab working on next-generation prototypes would be tangible, instead of building four different fabs in each country.

Second, Quad countries could sponsor Centres of Excellence (CoE) in each country focusing on their core strength. For example, Australia could host the CoE for new materials in electronics; Japan could host the CoE for silicon and semiconductor manufacturing equipment, and the US and India could host CoEs on fabless design architectures.

Third, create a Quad go-to-market program. One thing requires change, i.e., at present, international corporate and government joint development efforts continue only to the “pre-competitive” or R&D stage.

Fourth, With wider application of semiconductors, in IoT, 5G/6G communication, smart cities, etc. Quad countries can help each other to better compete in international markets. It would help them better compete against China-sponsored Belt and Road Initiative.

Fifth, Quad can expand this partnership to involve other countries like Taiwan, South Korea, and Canada

Source: This post is created based on the article “3 Ideas For 4 Countries Hunting for Chips” published in Times of India on 24^th May 2022.