THE MACRO ENVIRONMENTAL FACTORS

AFFECTING THE SEMI-CONDUCTOR INDUSTRY

Macro environment refers to the main outside, uncontrollable elements that
affect how an organisation makes decisions. A corporation operates in a bigger
context than just its immediate commercial environment. It consists of forces
that simultaneously present opportunities and risks to business. Following are
the dimensions

Economic environment: The economic environment consists of factors that can

affect consumer purchasing power as well as the spending patterns. Important
economic criteria include GDP, GNI, import duty rate, unemployment,
inflation, spending patterns as well as the disposable personal income.

Natural environment: It refers to the natural resources or physical environment

that are required as inputs by marketers or which is affected by the marketing
activities. The ecological conditions have become a crucial factor to consider as
the environmental concerns have grown strongly in the recent years. Example,
air and water pollution, floods, droughts, etc.

Technological environment: The macro environment is significantly influenced

by technology. Before spending money on any marketing initiatives, a company
must conduct a comprehensive analysis of the adoption and diffusion of
technology. The business must be aware of the level of technology adoption and
user interface development in the area in order to plan its communications and
marketing initiatives effectively.

Political and Legal environment: The political environment's changes have a

big impact on marketing choices. This pertains to the laws, governmental
bodies, and pressure groups that can sway or restrain different people or groups
in a certain society.

Cultural environment: The cultural environment is linked to elements that have

an impact on societal norms, preferences, perceptions, and behaviour. For the
purpose of making marketing decisions, organisations need to be aware of the
cultural values and customs that are prominent in society. Many cultural errors
can occur when businesses fail to comprehend other cultures. For instance, a
symbol that has a favourable connotation in one culture may have a bad
connotation in another.

Demographic environment: It refers to the physical environment or natural

resources that are needed by marketers as inputs or that are impacted by
marketing activity. As environmental concerns have intensified in recent years,
the ecological conditions have become a significant aspect to take into account.
Floods, droughts, air and water pollution, etc. are a few examples.

ABOUT SEMI- CONDUCTORS

Conductors and insulators have been used in the electronics industry for a long
period of time. However, lately, semiconductors are something which has
gotten a lot of attention worldwide.  Semiconductors materials, unlike
conductors, conduct electricity partially which means they allow electricity to
flow just in one direction or in a much more controlled way.

Semiconductors conduct electricity through holes and electrons. Holes are

positively charged electron carriers. On the other hand, electrons are the
negative charge carriers. Thus, both are charge carriers having equal magnitude
but opposite in charge.

There are usually two types of semiconductors- Intrinsic semiconductors and

Extrinsic semiconductors. Intrinsic semiconductors are made of elements with
inherent semiconductor properties. Extrinsic semiconductors are those where
doped elements are responsible for carrying electrons. Extrinsic semiconductors
are of two types n types and p types. In, N-type semiconductors, electrons are
the major charge carriers and holes are the minor carriers. On the other hand, in
P-type semiconductors, holes are the major charge carriers and electrons are the
minor charge carriers.

Semiconductors are used in almost every sphere of electronics like phones,

laptops, televisions, smart watches, smart music systems, etc. 

Economic environment in semi-conductor industry

The demand and investment in an industry are determined by economic factors,

such as the inflation rate, savings rate, foreign exchange rate, and interest rate.
Semiconductor Manufacturing Industry can forecast the growth trajectory of
the sector by using the country's economic factors such as growth rate,
and inflation.
• The economy's productivity and labour costs
• Currency stability and exchange rates.
• Regulation of the free market by the related technologies 

Natural environment in semiconductor industry

Ecological trends and changes influence the performance of semiconductor

industry. The effects of the natural environment on the remote or macro-
environment of firms are determined in this aspect. The following are the
ecological external factors significant in Intel’s business:

1. Increasing environmental contamination (threat & opportunity) this

includes high variation in Weather and Climate change
 2. Rising interest in environmental programs (opportunity) this includes
Laws regulating environment pollution and Air and water pollution
regulations in Semiconductor - Broad Line industry
3. Rising emphasis on business sustainability (opportunity) it mainly
consists of Waste management in Technology sector, Attitudes toward
“green” or ecological products and Attitudes toward and support for
renewable energy

Technological Factor in semi-conductor industry

Technology is the backbone of every industry and in order to gain competitive

advantage each industry requires constant development of the technology and
proper update. Over the last few years the role of technology in each sector have
increased exceptionally. And because of that it is getting very difficult for the
players who were using the traditional methods to cope up with the competitors.
Historically if we look over the education sector and how it has transformed,
Earlier the students have to go to the classes physically to get education Then
Covid-19 came and it changed the ecosystem and now technology have allowed
students to take classes from their comfort and can learn anything whenever and
wherever they want.

1. R&D Development 
2. Technological Developments 
3. Acceptance of Smart Device 
4. Acceptance of Electronic Devices 

Political and Legal factors in semi-conductor industry

The factors that can affect Semiconductor Manufacturing Industries’ long-term
profitability in a particular nation or market are heavily influenced by political
issues. Through its operations in many nations, Semiconductor Manufacturing
Industries are exposed to a variety of political systems and political
environmental issues. Prior to entering or making an investment in a specific
market, semiconductor manufacturing can carefully examine the following
factors:
1. Taxation-tax incentives and rates
2. Rules governing industrial safety in the technology industry
3. Minimum wage and overtime regulations
4. Pricing restrictions
5. The sector's significance to the nation's economy, semiconductors and
integrated circuits

The Semiconductor Industry has opportunities as well as issues in the kind of IP

legal rights as well as lawful agreements. High level of importance is given to
lawful contracts in the semi- conductor issues. High level of importance is given
to lawful contracts in the semiconductor industry.

1. Increasing competitive regulations (threat)

2. Improving international patent protection (opportunity)
3. Increasing issues of waste disposal regulations around the globe. (threat
& opportunity)
Example- Intel experiences threat from Windows due to legal external factor is
a because it enjoys a virtual monopoly on Windows systems. AMD is a
competitor having a considerable market share but Intel has the biggest market
share.

Cultural Factors in semi-conductor industry

In 21st century every organisation has many variable factors which affect the
operations and culture of the organisations in a given setting. Today the
consumers and their social values are one of the most important factors because
an organisation marketing strategy are mainly focused upon capturing the
values of the consumers. 
 To comprehend a market’s clients and create a marketing message that appeals
to Semiconductor – Broad Line industry consumers, Semiconductor
Corporation marketers, heavily rely on the shared views and attitudes of the
general population. The following social elements should be examined:
1. Available worker’s skillset
2. Society's social structure and power structure
3. Culture Diversity.
4. Quality of education available in the society.
5. Attitude.
6. Demographic factors.

CONCLUSION
Therefore, with the rise in demand for electronics, the demand for
semiconductors has grown ten folds. Today, all the developed nations are
looking for opportunities to get into the semiconductor market and dominate the
supply chain. Though the market for semiconductors is booming, there are
various factors which affect its production. These factors include political,
economic, cultural, technological, ecological and legal factors. For example, the
ongoing Russia-Ukraine war has disrupted the supply of semiconductors. The
prices of raw materials, uncertain future and supply chain disruptions have
complicated the situation further. However, semiconductors form the basis of
most of the electronic devices we use today. Therefore, despite all the
favourable and unfavourable factors, the demand and future for semiconductors
is high.