Greg Linden

Offshoring in the Semiconductor Industry: Historical Perspectives

Semiconductor design is a frequently-cited example of the new wave of offshoring and foreign-outsourcing of service sector jobs. It is certainly a concern to U.S. design engineers themselves. In addition to the current wave of white-collar outsourcing, the industry also has a rich experience with offshoring of manufacturing activity. Semiconductor companies were among the first to invest in offshore facilities to manufacture goods for imports back to the U.S. A brief review of these earlier manufacturing experiences and their impact on the fortunes of the domestic industry and its workers can help to illuminate the current debates over offshoring in services. Because meaningful data about the impact of the offshoring of chip design (and even manufacturing) are limited, we rely on a more qualitative analysis for our key points. We have conducted dozens of interviews with engineers and managers at numerous semiconductor and related companies in the United States, Asia, and Europe over the past six years. Our research also incorporates the rich store of publicly available information in trade journals and company reports. This paper describes the two previous stages of offshoring semiconductor assembly jobs and of outsourcing semiconductor manufacturing and the impact they had on the U.S. semiconductor industry. We argue that the initial concern about losing domestic jobs in both stages turned out to be unfounded as the industry used the situation to its competitive advantage by becoming cost competitive (assembly stage) and by developing the fabless sector (manufacturing stage). We then analyze the on-going stage of offshoring design jobs, and compare this stage to the two that came before in order to explore the possible impact on domestic jobs and the U.S. semiconductor industry. We begin in section one with a brief description of the stages of semiconductor production and our analytical framework. Section two looks at the offshoring of assembly jobs, and section three analyzes the foreign outsourcing of manufacturing. Section four explores the offshoring of design jobs, and concludes with a discussion of what this means for the U.S.

The evolving role of semiconductor consortia in the United States and Japan

This article examines the interactions between public and private actors as cooperation in the semiconductor industry becomes increasingly international. The latest manifestations of multilateral collaboration are two consortia: I300I based in the United States and Selete based in Japan. Through an analysis of their structures and their origins, this article provides a deeper understanding of the complexities facing industry-wide consortia, the role of the government in promoting or inhibiting cooperation, and the lingering rivalries that impede truly global cooperation in a dynamic, high-technology industry.

China Standard Time: A Study in Strategic Industrial Policy

Chinas industrial policy for high-technology industries combines key features of the policies pursued elsewhere in East Asia such as opening to foreign investors and supporting domestic firms. Leveraging its large market size, China has gone further than other developing countries by promoting standards for products that compete in China with products controlled by major electronics companies. This paper analyzes the experience to date of this Chinese policy in the consumer optical storage industry in the context of Chinas evolving national innovation system. Chinas standard-setting policy is politicized but ultimately pragmatic, which avoids imposing excessive costs on the economy. It may also have dynamic learning benefits for Chinese firms who are starting to compete in global markets.

Flying Geese as Moving Targets: Are Korea and Taiwan Catching up with Japan in Advanced Displays?

Are flying geese moving targets or sitting ducks? This paper examines strategies that Korean and Taiwanese firms and governments adopted to build globally competitive advanced display manufacturing capabilities in the face of Japans manufacturing advantages. We examine case evidence from two perspectives: Asia skepticism and network globalization. We observe that the lead goose appears vulnerable.

Strategic Talent Management: Managing expert talent

Introduction The previous chapter focused on using the resource-based view (RBV) of strategy to think about talent. One of the key critiques that it made of the talent management perspective was that it overplays the importance of general management and underplays the value of expert knowledge and is antithetical to the RBV that has come to dominate the field of strategy. The RBV is one of the foundational pillars of dynamic capabilities. This chapter builds on the previous arguments, and discusses the management of talent in terms of the dynamic capabilities framework. In recent decades, expert talent has become more important than ever for the creation and management of technology in the global economy (Albert and Bradley, 1997; Reich, 2002). Many job categories are becoming so complex and interdependent that managing them in a traditional structured hierarchical format is no longer a realistic option. Some decomposition of processes into specialized functional tasks is still necessary, but deep hierarchies are too cumbersome and inflexible.

Learning and Earning in Global Value Chains: Lessons in Supplier Competence Building in East Asia

The research collected in this volume represents years of challenging fieldwork and careful documentation on the part of the authors. Instead of making armchair assumptions about causes and outcomes of development and technological learning based on the thin gruel provided by official statistics, the authors have spent many months in the field, visiting companies, interviewing entrepreneurs, talking to government officials, collecting official and unofficial statistics, administering questionnaires, and learning about the key technologies and firms in specific industries. The richness of this approach is obvious from the preceding chapters. As in prior field-based global value chain (GVC) research, however, the richness and variety of the findings can make it difficult to reach generalizations needed to form the basis of sound strategic or policy advice.

The Evolution of Japan’s Semiconductor Industry

Semiconductors, also known as integrated circuits or ‘chips’, are one of the primary enablers of the technological revolution that has spread from the electronics industry to nearly every corner of the modern world. This chapter analyzes how the Japanese semiconductor (electronics) industry captured global leadership in the mid-1980s, and then lost it by the mid-1990s. Japanese electronics firms struggled to find new sources of advantage in a globalized electronics industry, as new competitors in Taiwan and South Korea, and later China, accounted for a growing share of output.

National Technology Policy in Global Markets

During the late 1980s and early 1990s, U.S. policymakers confronted an unusual combination of political success and economic challenge in the international landscape. As the Cold War waned, competition from firms in industrial and industrializing allies, such as Japan and South Korea, placed severe pressure on U.S. firms in many industries, including the high-technology industries whose early growth had benefited from Cold War-related defense spending. One result of this juxtaposition of events was a series of federal initiatives designed to link the activities of the vast network of federal laboratories, many of which were established as part of the Cold War defense build-up, to the technological needs of industry. The Cooperative Research and Development Agreement (CRADA) was one of the most widely employed vehicles in these initiatives, particularly in the Department of Energy (DoE) laboratory system.