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Researchers continue to seek understanding of industrialization as a state managed process. How to create and implement new industries based on advanced knowledge is on the policy agenda of many advanced nations. Measures that promote these developments include national capacity building in science and technology, the formation of technology transfer systems, and the establishment of industrial clusters. What these templates often overlook is an analysis of use. This chapter aims to increase the understanding of the processes that embed new solutions in structures from an industrial network perspective. The chapter describes an empirical study of high-technology industrialization in Taiwan that the researcher conducts to this end. The study shows that the Taiwanese industrial model is oversimplified and omits several important factors in the development of new industries. This study bases its findings on the notions that resource combination occurs in different time and space, the new always builds on existing resource structures, and the users are important as active participants in development processes.

We examine the evolution of vertical specialization in three industries: chemicals, computers, and semiconductors. Vertical specialization is the restructuring of industry-wide value chains, such that different stages are controlled by different firms, rather than being vertically integrated within the boundaries of individual firms. In some cases, vertical specialization may span international boundaries and is associated with complex international production networks. After decades of vertical specialization, firms in the chemical industry are re-integrating stages of the value chain. By contrast, the semiconductor and computer industries have experienced significant vertical specialization during the past ten years. We examine how and why these contrasting trends in vertical specialization have co-evolved with industry maturation and decline, and underscore the importance and role of both industry factors and business strategies necessary for industries to become more specialized. We also consider the effects of vertical specialization on the sources of innovation and the geographic redistribution of production and other activities. We conclude that the evolution of vertical specialization in these three industries has both reflected and influenced the strategies of leading firms, while also displays industry-specific characteristics that are rooted in different technological and market characteristics.

The semiconductor industry has attracted considerable attention during the last twenty years as a major high stakes business battlefield between American corporations and Japanese society. Recently, other Asian countries have made inroads into this industry. Consistent with Michael Porter's thesis on the importance of national industry related clusters (Porter, J 990), this paper predicts that between now and the year 2000, the entrepreneurial characteristics of American companies will lead them to significant market share increases and that Japanese businesses will lose market share to other Asian companies, particularly in South Korea. Beyond the year 2000, the industry may evolve to the point where geographic areas concentrate on specific dimensions of the industry with the United States strong in innovation and Asia emphasizing manufacturing efficiencies. It is also possible that later in the 21st century, continued economic growth in Asia could lead to Asian companies taking expanded leadership roles in the industry. This paper acknowledges the importance of government intervention both in the United States and Japan in the early stages of the industry, but argues that the evolving maturity of the semiconductor industry is reducing the need for government subsidies, even though trade issues, especially with China, continue to be important.

This study aims to discuss the development of the semiconductor industry in China and analyzes it through current studies about the catch up of latecomers in newly industrialized countries (NICs).

Use the case study approach to explore and discuss the development track of the Chinese semiconductor industry and the catch up experience of Huang Hong NEC in China.

The experience of NICs can explain the catch up of semiconductor latecomers in China. However, the role of government has changed along with the whole development of the China semiconductor industry; external pressure may influence the pace of development and the span of control of the China Government for future catch ups.

The study focuses on one single case, which may not reflect the individual differences appeared in different firms in China.

This study contributes to our knowledge about the catch up of latecomer firms in an emerging market and verifies classical arguments about the experience of NICs through the experience of China's semiconductor industry.

In an emerging global competitive environment, the Malaysian semiconductor industry is facing threats from low cost countries with limited innovative capabilities. It urges for improvement in competitiveness of the Malaysian semiconductor industry. This study focuses on the perspectives of the managers towards the enhancement of competitiveness. Through a focus group interview and data collected from 200 managers working in semiconductor‐manufacturing units in Malaysia, the study identified twenty‐two competitive factors for the improvement of competitiveness of the semiconductor industry in Malaysia. Since the collected data did not form a normal distribution, nonparametric tests such as Chi‐squire test and Mann‐Whitney U test were used to test the framed hypotheses. Based on the analysis, ten key competitive factors were identified out of the identified twenty‐two competitive factors through focus group interview. Further, the study also highlighted the differences in the opinion of competitive factors of technical and non‐technical job functioning managers.

Foundry, Design House, and integrated device manufacturers (IDM) are major characters in the semiconductor industry value chain. The purpose of this paper is to discuss patterns of characters' evolution in technology through patents classified as wafer‐design application patents and wafer‐process patents.

Various patent indicators, such as average patent citation count, and the combination of the average patent citation count and relative patent count share were used to measure the patent activity, patent quality, and the combination of the patent quality and relative patent activity share, respectively. The study period (1979‐2009) was divided into three major technology or wafer size eras, 1979‐1991 for the 6‐ and pre 6‐inch wafer era, 1989‐1999 for the 8‐inch wafer era, and 1997‐2009 for the 12‐inch wafer era.

Foundry has gradually become the technology transferor rather than purely the manufacturing capacity provider. Foundry's impact on the technology level has risen steeply on both the wafer‐process technology fields and the wafer‐design application technology fields. As a result, IDM, traditionally considered the primary technology contributor in the semiconductor value chain for the past 30 years, will continue to be challenged in the semiconductor industry.

Some hypotheses are clarified to provide managerial implications for the semiconductor industry. Owing to Foundry's rise in technology activity and quality, IDM/Design House should not merely view it as one of their capacity providers but should also pursue a technology alliance with it.

The paper clarifies the traditional hypotheses of the characters of technology in the semiconductor value chain.

We examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. Recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to R&D. Yet the propensity of semiconductor firms to patent has risen dramatically since the mid-1980s. We explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 U.S. semiconductor firms during 1979–1995. The results suggest that the 1980s strengthening of U.S. patent rights spawned “patent portfolio races” among capital-intensive firms, but it also facilitated entry by specialized design firms.

This study aims to understand how Brazilian design houses (DHs) use open innovation in joint development projects for integrated circuits.

As a research strategy, qualitative research using multiple case studies was made. As sources of evidence, semi-structured interviews were conducted with three DHs of Programa integrated circuit [circuito integrado(CI)]-Brasil and with four specialists in the field, as well as analysis of documents. The data were analyzed through content analysis.

The results showed the DHs use sources of external knowledge in their innovation process, to assist the development of new products, to access new knowledge and skills, to attract financial resources and to be competitive in the market of high technology.

The study has important implications on the semiconductor industry in Brazil, as the industry is considered strategic for the competitiveness of final goods sector. The importance of encouraging the development of partnerships in the sector, the possibility of using informal agreements to mediate the collaboration between DHs and external agents, and the improvement and long-term continuity of public policies to support the industry are among the implications. In addition to suggestions for new business approaches to assist the strengthening of this segment.

To determine the status of internet and e‐commerce adoption by the Taiwan semiconductor industry, the research is designed to help government and enterprise in formulating strategic plans and making resource allocation decisions.

Using the three‐level model of internet commerce adoption (MICA), a survey of 287 companies and web sites was designed. Semiconductor firms were placed into five categories: integrated circuit (IC) design, manufacturing, packaging, IC testing, and peripheral device manufacturing.

The MICA model shows the internet adoption ratio for semiconductor firms as 82.6 percent, significantly higher than the electronics and electrical machinery industry sector (56.5 percent). The IC manufacturing and packaging segment are in the processing stage, the final stage of development for the MICA model. One‐third of the IC testing industry segment falls into the provision stage, and 36.1 percent web sites are in the processing stage. The IC design and peripherals industrial segments are located in the provision stage.

The IC manufacturing segment is conducting more financial transactions than the other segments – a result that matches earlier research showing that larger companies are most likely to implement e‐business applications. Many enterprises in the industry are lagging with the adoption of the internet indicating a need for education and training.

This benchmark study provides a framework for evaluating the internet adoption status of semiconductor and other high technology firms. The MICA model is demonstrated to be suitable for evaluating the different stages of internet adoption.

The study considers the interdependencies between complementors in the business ecosystem and explores the nature of collaborative interactions between them. It sheds light on the organizational and the strategic contexts in which such interactions take place, and shows how they may influence the pattern and the benefits of collaboration. The evidence presented is based on fieldwork followed by a detailed survey instrument administered to firms in the semiconductor industry. The findings, while reinforcing the shift in the locus of value creation from focal firms to collaborative business ecosystems characterized by information sharing and joint action among complementors, illustrate the organizational and the competitive challenges that firms face in their pursuit of joint value creation.