The Internationalization of Innovative Activities: The Case of the Semiconductor Industry

According to the literature on the industrial organization, the globalized and verticalized structure of semiconductors value chain has been favored under the “entrepreneurial regime” which characterizes the industry. If the entry of new firms after the invention of transistor at Bell Laboratories was promoted by the disclosure of the technology, further improvements were carried out by researchers and engineers, who left large corporations to create their own companies. In moving outside, they developed technologies which aligned from the knowledge schemes and “routines” of the previous organization. Or, it may be suggest that the disintegration process depends on the incumbent's decision to outsource the production of a non-core technology when its in-house development is not as efficient as the specialized suppliers. Whether many factors may be cast to understand the structural organization of the industry, the capability of the firm to coordinate and integrate its technology does influence its vertical boundaries (Malerba, Nelson, Orsenigo, Winter, 2006). Each firm is more effective in managing a set of technologies that match the competences and knowledge accumulated over time. When the microprocessor was introduced in the market, IBM had to disintegrate the semiconductor production and rely on high-performing producers of the new technology. According to theoretical findings, the empirics shows that discontinuities between new knowledge and the long learning technological trajectory does create tensions regarding the vertical structure of the firm (Williamson, 1975). The System on Chip (SoC), one of the latest technological advances in the semiconductor industry, is an example of the pressures caused by the increasing technological complexity on the vertical boundaries of firms.