Sticky Spots on Slippery Slopes: The Development of the Integrated Circuits Industry in Emerging East Asia

Rajah Rasiah, Yap Xiao Shan () and Yap Su Fei ()
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Yap Xiao Shan: Department of Development Studies, University of Malaya
Yap Su Fei: Department of Economics, University of Malaya

Institutions and Economies (formerly known as International Journal of Institutions and Economies), 2015, vol. 7, issue 1, 52-79

Abstract: This paper draws from an evolutionary 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: East Asia; Integrated Circuits; Institutions; Technological Upgrading (search for similar items in EconPapers)
JEL-codes: L52 L63 O33 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Working Paper: Sticky Spots on Slippery Slopes: The development of the integrated circuits industry in emerging East Asia (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:umk:journl:v:7:y:2015:i:1:p:52-79

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