Chipmaker TSMC’s first plant to reboot Japanese industry

on 04/03/2024

Chipmaker TSMC formally opened its first Japanese plant last month highlighting the Taiwanese firm’s critical role in Tokyo’s multi-billion dollar efforts to reboot its once-mighty semiconductor manufacturing industry.
That Japan turned to TSMC for help on an industry it once dominated reflects the Taiwan chipmaker’s dominant position in the foundry business and Tokyo’s heightened concern over China’s growing prowess in a wide swathe of technology.
The arrival of TSMC, the world’s leading contract chipmaker, in Japan is seen as having sparked investment across a sector vital to economic security even as the government eyes a greater prize with its backing for homegrown foundry venture Rapidus.
“The possibility of having TSMC build a fab in Japan really rallied support from disparate parts of the semiconductor industry,” said Damian Thong, head of Japan research at Macquarie Capital Securities.
“They have built a snowball effect around it,” he said.
By 2027, Taiwan is projected to control two-thirds of foundry capacity for advanced processes as its lead is eroded by aggressive expansion in the U.S., according to research firm TrendForce, with Japan increasing its global share to 3%.
TSMC, which is also building capacity in the U.S. and Germany, is targeting mass production at the fab later this year and has announced plans for a second plant, bringing total investment in the venture to more than $20 billion.
Partnering with companies including Sony and Toyota monthly capacity across the two fabs will exceed 100,000 12-inch wafers, strengthening Japan’s access to chips, which are essential for the electronics, automotive and defence industries.
TSMC sees Japan as a natural fit with an industrious work culture suited to chipmaking and a government that is easy to deal with and generous with subsidies, Reuters has reported.
Japan has also benefited from Taiwan’s willingness to approve the export of foundry and supply chain technology, particularly for advanced node technologies below 16 nanometres, said David Chuang, an analyst at Isaiah Research.
“With the prospect of fabricating more advanced roadmaps in Japan, it’s reasonable to expect that foundry customers may be more inclined to commit to long-term development and procurement of capacity,” said Chuang.
Japan can leverage its expertise in areas such as photoresists – chemicals that are needed for chipmaking – image sensors and packaging, which is becoming increasingly important to eke out chip performance gains, said Joanne Chiao, an analyst at TrendForce.
Momentum in Japan’s chip sector is growing, with Taiwan chip companies arriving in Japan not only to support the TSMC plant but also being attracted by the industry’s renewed dynamism, Reuters has reported.
ECONOMIC BOOST
In the chipmaking hub on the southern island of Kyushu where TSMC’s plant is located, companies ramping up investment include power chip maker Rohm wafer maker Sumco and equipment maker Tokyo Electron.
The regional economic boost is forecast to hit 20.1 trillion yen ($134 billion) over a decade, according to the Kyushu Economic Research Center, with activity rippling out from fabs being constructed and run, and from consumption by workers.
A major bottleneck is labour shortages, said Soei Kawamura, a researcher in the business development department at the centre.
“Large companies like TSMC and Sony will be able to secure the necessary personnel, but the economic development of the Kyushu region will change depending on how many people can be recruited in the local semiconductor-related and other industries,” he said.
The number of workers in Japan’s chip-related businesses has declined by around a fifth over the last roughly two decades.
Leading domestic chip firms need to find 40,000 workers over a decade, according to estimates from the Japan Electronics and Information Technology Industries Association (JEITA).
Tokyo’s grander vision is of building a homegrown champion through foundry venture Rapidus, which is headed by industry veterans and targeting mass production of cutting-edge chips on the northern island of Hokkaido from 2027.
A potential rival to TSMC, which has spent decades honing its processes, Rapidus is partnering with IBM and chip research organisation Imec. But its prospects for success are viewed with scepticism by many in the industry.
“I don’t doubt TSMC will be dominant, but Japan will seek to prove that they are valid as a number two,” said Macquarie’s Thong.

Clean technologies slow down CO2 emissions from energy

on 04/03/2024

Energy-related carbon dioxide emissions rose to a record level in 2023, but the growth slowed from previous years thanks to the continued expansion of clean technologies, the International Energy Agency said this week.
CO2 emissions from energy rose by 1.1 percent in 2023, increasing by 410 million tonnes to a record 37.4 billion tonnes, slowing down from a gain of 490 million tonnes in 2022, the IEA said in its annual update on emissions.
The IEA said that without technologies such as solar panels, wind turbines, nuclear power, and electric cars, the global increase in energy-related CO2 emissions over the last five years would have been three times larger the 900 million tonnes registered.
Over 40 percent of last year’s increase in carbon emissions from energy resulted from severe droughts in China, the United States, India and elsewhere which cut hydroelectric output and forced utilities to resort to fossil fuels.
Without the water shortfalls, global carbon emissions from power generation alone would have fallen last year.
Energy carbon emissions rose in China and India in 2023, while advanced economies saw a record fall even as their economies grew. Their emissions dropped to a 50-year low as coal demand fell back to levels not seen since the early 1900s.
For the first time last year, at least half the power generated in advanced economies came from low-emissions sources like renewables and nuclear.
Even as China’s emissions grew, it added as much solar PV capacity in 2023 as the entire world did in 2022.
“The clean energy transition has undergone a series of stress tests in the last five years – and it has demonstrated its resilience,” said IEA Executive Director Fatih Birol.
“A pandemic, an energy crisis and geopolitical instability all had the potential to derail efforts to build cleaner and more secure energy systems. Instead, we’ve seen the opposite in many economies.” – ERMD/AFP

Challenges for Businesses in Pakistan

on 29/02/2024

Businesses operating in Pakistan confront a myriad of obstacles including inadequate infrastructure, energy deficits, political volatility, corruption, restricted financial access, skill shortages, market fragmentation, intricate tax systems, security risks, and environmental concerns.
Resolving these challenges necessitates cooperative endeavors from both the public and private sectors, involving policy enhancements, infrastructure investments, governance fortification, and the creation of a more favorable business environment. There are also some notable challenges and problem areas that need to be considered.
INFRASTRUCTURE
Pakistan’s infrastructure deficit is significant, with the World Bank estimating that the country needs to invest around $31 billion annually in infrastructure to bridge the gap. Inadequate infrastructure can result in productivity losses of up to 3.5% of GDP annually.
Energy Shortages: Pakistan faces a substantial energy shortfall, with peak electricity demand exceeding supply by around 5,000 to 7,000 megawatts. The energy crisis results in economic losses estimated at approximately 2% to 4% of GDP annually.
POLITICAL INSTABILITY
Pakistan has experienced periods of political instability, which can deter foreign direct investment (FDI) and disrupt business operations. The country ranked 134th out of 190 countries in the World Bank’s Ease of Doing Business Index in 2020.
CORRUPTION & BUREAUCRACY
Corruption is widespread in Pakistan, with the country ranking 120th out of 180 countries in Transparency International’s Corruption Perceptions Index. Bureaucratic red tape and inefficiencies contribute to delays in obtaining permits and licenses, impacting business operations.
ACCESS TO FINANCE
According to the World Bank, only around 7% of adults in Pakistan have access to formal financial services. The credit gap for small and medium-sized enterprises (SMEs) in Pakistan is estimated to be around $3.6 billion.
SKILL SHORTAGE
Pakistan faces a skills gap across various sectors, with the World Economic Forum’s Human Capital Index ranking the country 134th out of 157 countries. Around 23 million children in Pakistan are out of school, contributing to the skills shortage.
INFRASTRUCTURE FOR INNOVATION
Pakistan lacks a robust innovation ecosystem, with only a few incubators and accelerators in operation. Research and development spending in Pakistan is relatively low, accounting for around 0.29% of GDP.
TAXATION & REGULATORY ENVIRONMENT
Pakistan has a complex tax system, with a high corporate tax rate of 29%, which can deter investment. Compliance with tax regulations can be challenging, with tax evasion estimated to be around 70% of total tax liabilities.
MARKET FRAGMENTATION
Pakistan’s market is fragmented, with around 60% of the population residing in rural areas. Cultural and linguistic diversity presents challenges for businesses in reaching customers effectively across different regions.
ENVIRONMENTAL SUSTAINABILITY
Pakistan faces significant environmental challenges, including air pollution levels that exceed World Health Organization (WHO) guidelines by up to five times in some cities. The economic cost of environmental degradation in Pakistan is estimated to be around 6% of the GDP annually.
In the current environment in Pakistan, addressing challenges such as infrastructure deficits, energy shortages, political instability, corruption, and skill shortages requires a multifaceted approach involving government policies, private sector initiatives, and civil society engagement. Solutions include investment in infrastructure, diversification of energy sources, governance reforms, skills development, streamlining regulatory processes, improving access to finance, promoting innovation and entrepreneurship, implementing environmental sustainability measures, enhancing regional cooperation, and fostering community engagement and social responsibility. Collaborative efforts from stakeholders across sectors are crucial for creating a conducive business environment and fostering sustainable economic development in Pakistan.

Renewable Energy Integration: Engineering Solutions for a Sustainable Future

on 29/02/2024

One crucial technical difficulty that is essential to a sustainable energy future is the integration of renewable energy methods into current power systems. The increasing need for sustainable energy has put engineers to work creating solutions that integrate renewable energy sources such as geothermal, hydro, wind, and solar power into the current energy infrastructure. Consideration must be given to the technical, financial, and regulatory aspects of this shift in a comprehensive manner. Optimizing the grid’s integration of sporadic renewable energy sources, such as wind and solar electricity, is a problem for engineers. Because of their variability, creative energy storage methods are required to maintain a balance between supply and demand. Leading-edge engineering solutions to deal with the fluctuating nature of renewable energy production include battery technology, sophisticated systems for storing energy, and smart grid technologies. When integrating renewable energy, the stability and dependability of the electrical system are vital factors. The variability brought about by renewable sources requires engineers to design and execute grid management structures and systems that can handle it. This entails creating sophisticated control algorithms, models for energy forecasting, and grid storage options to keep the electrical infrastructure steady and robust. A significant engineering solution for successful integration of renewable energy is the development of decentralized and interconnected energy networks. In order to improve the grid’s flexibility and dependability, engineers can build a network of dispersed energy resources. By lowering transmission losses and increasing the power system’s overall resilience, this strategy makes it possible to use renewable energy more effectively. Upgrades to the current transmission as well as distribution infrastructure are also required for the incorporation of renewable energy sources. In order to distribute electricity from remote renewable energy installations to urban centers, engineers must develop and execute reliable, efficient grid systems. This calls for the construction of smart grids, high-capacity transmission lines, and sophisticated monitoring and control systems. In the engineering process, one of the most important factors to take into account is the economic feasibility of integrating renewable energy. The goal for engineers is to reduce the cost of renewable energy technologies so that they can compete more favorably with conventional fossil fuel sources. To attain economies of scale and raise overall cost-effectiveness, this entails improvements in the design, production, and implementation of renewable energy systems. The intermittent nature of renewable energy sources is addressed in large part by energy storage technology. In order to store surplus energy during times of high generation and discharge it during times of high demand, engineers are diligently working on novel storage methods, such as improved batteries, pumped hydro preservation, and thermal energy storage. The inherent unpredictability of renewable energy sources is mitigated and grid stability is enhanced by these storage solutions. One important technical approach to maximize the integration of renewable energy is the use of smart grid technologies. With the use of smart grids, the electricity system can be monitored, controlled, and communicated with in real time, facilitating dynamic changes to balance supply and demand. By facilitating more effective administration of dispersed energy resources, this intelligent grid architecture improves the efficiency and dependability of renewable energy integration. Multiple renewable energy sources combined into a single hybrid system offers a comprehensive engineering solution. Engineers can design more dependable and consistent power generating profiles by combining complimentary sources, including wind and solar. By using this method, the total efficiency of renewable energy systems is increased and energy output is maximized. In isolated or off-grid locations in particular, micro grid systems provide robust and targeted energy solutions. Micro grids are scalable and decentralized methods of integrating renewable energy that are designed by engineers to work either independently or in tandem with the main power grid. These smaller-scale systems support larger environmental initiatives and improve energy security. Efficient management and observation mechanisms are essential for maximizing the efficiency of renewable energy resources. Engineers create complex automation technologies and algorithms to effectively monitor and regulate the functioning of renewable energy plants. Real-time changes, predictive maintenance, and the best possible use of renewable resources are made possible by these technologies. Global attempts to switch to renewable energy depend heavily on international cooperation and standards. To enable smooth integration across various energy systems, engineers work to create common technological criteria, interoperability protocols, and cooperative research projects. These initiatives guarantee a unified strategy for the integration of renewable energy on a worldwide basis. Engineering issues, economic factors, and legal frameworks must all be taken into account in a holistic and multidisciplinary strategy to integrate renewable energy. The seamless integration of renewable energy sources into the current energy infrastructure is made possible by the creative solutions developed by engineers, which range from technologies for storing energy to smart grid systems. Future developments in engineering will continue to influence the field of renewable energy integration as the world moves toward a more sustainable energy future.

KE, Hubco sign MoU to off take Thar Coal-fired electricity

on 29/02/2024

Committed to enabling access to affordable power and bolstering the energy security for its customers, the CEO of K-Electric (KE) Mr. Moonis Abdullah Alvi, and the CEO The Hub Power Company Limited (HUBCO) Mr. Kamran Kamal, signed a Memorandum of Understanding (MoU) to explore the opportunity for off-take of electricity following the conversion of HUBCO’s Hub Plant to local Thar coal.
This is in line with KE’s long-term strategy to induct power generation from indigenous sources into its energy mix. In this regard, the company is exploring the viability of Thar coal-based power generation projects. HUBCO’s Hub Power station is a 1292 MW (4 X 323 MW), residual fuel oil-based plant, which has maintained high standards of operations since 1997. Both companies have shown their commitment to working collaboratively towards conducting the requisite efforts needed for the timely conversion and integration of the project with KE’s network.
Sharing his thoughts on the occasion, CEO KE stated, “Today’s signing is another reflection of our intent to tackle the energy trilemma head-on, enabling access to affordable and reliable power to our growing customer base. I feel great honor to mention that KE has proven itself to be a preferred off-taker for independent power producers in Pakistan.
This is only due to our superior creditworthiness and our history of fulfilling the commitments made with our stakeholders. We are looking at a future where we substitute our reliance on imported fossil fuels with indigenous sources, creating a more resilient power value chain. This is also the driving force behind the Power Acquisition Program that we have submitted with our Regulator, which is balancing baseload requirements with renewable energy.”
CEO of HUBCO Mr. Kamran Kamal stated “The proposed conversion of Hub power plant to Thar coal will play a crucial role in decreasing reliance on imported fuels. While offering a sustainable energy solution for the people of Karachi, this project will also serve the continued use of the country’s legacy power generation assets. This initiative is in line with our commitment to securing indigenous, reliable, and affordable energy supply and contributing towards achieving energy security for the country. The envisaged project will be executed after conducting required feasibility studies and obtaining all necessary corporate and regulatory approvals.”
On the occasion, KE’s Chief Financial Officer Mr. Aamir Ghaziani, Chief Strategy Officer Mr. Shahab Qader, and Head of Business Development Mr. Mudassir Zuberi were present, accompanied by Chief Financial Officer Mr. Muhammad Saqib and Vice President Operations Mr. Amjad Raja from HUBCO. Other senior members from both organizations were also present.