Chips and Change ─ How Crisis Reshapes the Semiconductor Industry

For decades the semiconductor industry has been a driver of global economic growthand social change. Semiconductors, particularly the microchips essential to most electronic devices,have transformed computing, communications, entertainment, and industry. In Chips and Change, ClairBrown and Greg Linden trace the industry over more than twenty years through eight technical andcompetitive crises that forced it to adapt in order to continue its exponential rate of improvedchip performance. The industry's changes have in turn shifted the basis on which firms hold or gainglobal competitive advantage.These eight interrelated crises do not have tidy beginnings and ends.Most, in fact, are still ongoing, often in altered form. The U.S. semiconductor industry's fear thatit would be overtaken by Japan in the 1980s, for example, foreshadows current concerns over the newglobal competitors China and India. The intersecting crises of rising costs for both design andmanufacturing are compounded by consumer pressure for lower prices. Other crises discussed in thebook include the industry's steady march toward the limits of physics, the fierce competition thatkeeps its profits modest even as development costs soar, and the global search for engineeringtalent.Other high-tech industries face crises of their own, and the semiconductor industry has muchto teach about how industries are transformed in response to such powerful forces as technologicalchange, shifting product markets, and globalization. Chips and Change also offers insights into howchip firms have developed, defended, and, in some cases, lost global competitiveadvantage.

Greg Linden is a a Post-Doctoral Fellow at the Center for Work, Technology and Society, University of California, Berkeley.