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‘Fab 4' chip group

Published: 3rd Mar, 2023

‘Fab 4' chip group

Context

The U.S.-led "Fab 4" semiconductor alliance of Taiwan, the United States, Japan and South Korea held its first video meeting of senior officials to focus on supply chain resilience.

Background

  • The United States last September convened the first meeting of the working group, colloquially called "Fab 4" or "Chip 4", to discuss how to strengthen the semiconductor supply chain, after a global chip crunch caused by the COVID-19 pandemic.

About

  • The meeting discussed setting up an early warning system to ensure a steady chip supply.
  • The Taiwan representatives suggested that the Fab 4 should exchange information on different parts of the supply chain as early as possible.
  • Taiwan and South Korea are going to handle manufacturing issues, Japan will report on materials issues and the US will concentrate on market issues.

What is Fab 4 chip group?

  • It is a semiconductor alliance of Taiwan, the United States, Japan and South Korea.
  • The "Fab" in the name refers to a shorthand industry expression for the fabrication plants where chips, used in everything from fridges and smartphones to fighter jets, are made.
  • The group's members are home to the world's largest contract chip maker Taiwan Semiconductor Manufacturing Co Ltd (2330.TW), South Korean memory chip giants.
  • Samsung Electronics Co Ltd (005930.KS) and SK Hynix (000660.KS), and key Japanese suppliers of semiconductor materials and equipment.

Significance:

  • As important members of the Indo-Pacific region, the countries also play a key role in the global semiconductor industry, and have deep economic and trade relations with countries in the region.

Why is semiconductor industry important?

  • A semiconductor is a substance that has specific electrical properties that enable it to serve as a foundation for computers and other electronic devices.

Semiconductor Chips: Semiconductors are materials which have conductivity between conductors and insulators. They can be pure elements, silicon or germanium or compounds; gallium, arsenide or cadmium selenide.

Government Initiatives in India:

  • India Semiconductor Mission (ISM)”will be set up Scheme for setting up of Compound Semiconductors facilities.
  • Vedanta and Taiwanese chipmaker Foxconnwill set up a ?1, 54,000 crore semiconductor plant in Gujarat.

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