Sticky Spots on Slippery Slopes: The development of the integrated circuits industry in emerging East Asia

Yap Xiao Shan and Rajah Rasiah

No 2015-05, Globelics Working Paper Series from Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management

Abstract: This paper draws from an inductive study of 36 integrated circuit (IC) production firms to examine the role of institutions and intermediary organizations in supporting technological upgrading in the integrated circuit industry in emerging East Asia. The evidence shows that IC firms in Korea and Taiwan have reached the technology frontier to show that they are deeply rooted on the slope of competition. IC production has also become sticky in Singapore and China where the provision of grants and government-industry coordination have attracted participation in the high value added activities of wafer fabrication, IC design and supportive R&D activities. Although IC production in Malaysia has enjoyed functional upgrading, particularly since 2005, its capacity to follow the path of Singapore and China will depend heavily on the dismantling of ethnic considerations by the government in the promotion of the industry. IC production is not sticky at all in the countries of Philippines, Thailand and Indonesia because of a lack of institutional deepening. Consistent with the global production network approach, the successful experiences examined in this paper show that the development of institutions and intermediary organizations through effective coordination between governments and industry is critical to stimulate technological upgrading in the IC industry.

Keywords: Integrated circuits; technological upgrading; institutions; intermediary organizations; East Asia (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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