Ministry of Economic Development eyes chip development to bolster semiconductor market

Many months ago, the Ministry of Economic Development (MoED) sent a proposal to the government concerning chip shortages. The MoED sought to create a task force that would research and manufacture ceramic base plates, enabling Hungary to enter the lucrative chip market. That proposal has since been approved, with 1 billion HUF committed to the effort.

Significance of the Hungarian Chip Market

The chip market is one of the world’s most critical markets, holding great economic and geopolitical importance. Most computer hardware, including handheld devices, rely on chips and semiconductors to function. The internet is an invaluable and ever-expanding resource to Hungarians and a shortage could restrict consumer access to the internet and other important digital resources, along with limiting other manufacturing industries that rely on them.

A lot of internet-based industries would particularly suffer from a chip shortage, including Hungary’s own telecom companies. Many such industries are only accessible through the internet, like iGaming, which allows people to access distant services like an online casino in Canada. To mitigate the possibility of a chip deficit, the MoED is trying to make Hungary one of the world’s most competitive chip parts manufacturers.

R&D&I Project To Shore Up Digitization in Hungary

The MoED’s approved proposal outlines the creation of a new R&D&I project. These Research, Development, and Innovation projects have already been widely implemented. For example, there’s an ongoing R&D&I initiative to encourage digitization in Hungary and expand access to 5G. Hungary has many of these R&D&I initiatives in place all at once, with several aimed at scientific and technological advancement.

This new R&D&I project is about establishing the Hungarian market for base plates, which are made from ceramic as an industry standard. Hungary has been making ceramic for decades through porcelain manufacturers Zsolnay and Hollóháza (which is now owned by the state). With this switch in priority, ceramic resources can be dedicated to making base plates that supplement the world’s semiconductor market.

Speaking about this initiative, State Secretary for Industrial Policy and Technology Gergely Fábián said that the country “currently has world-class materials research capabilities.” The project isn’t just about creating a new manufacturing economy in Hungary, it’s also about defending the country from exposure to foreign markets.

Preparing For Industry 4.0

Industry 4.0, or the Fourth Industrial Revolution, is the name given to digitization efforts by economic leaders. It describes the rise of data-driven operation, interconnected devices, and preparation for AI influence in the market. As part of EU policy that champions this effort, many countries aim to future-proof their economies by 2030.

However, this digitization relies on a hardware foundation which includes the chip industry. For as important as the industry is, it has been struggling to meet growing demands for computer hardware. Additionally, the biggest chip manufacturer located in Taiwan is subject to droughts that limit the ultrapure water necessary to clean factories. It’s also a sticking point in the China-US trade war.

As such, Hungary and other nations are seeking to bolster the semiconductor industry in any way they can, avoiding further upsets in the future. A thriving chip business is paramount for an economy that shows no sign of stopping, so that Hungary can profit from Industry 4.0 in the years to come.