Economic Development as a Learning Process

Economic Development as a Learning Process

Variation Across Sectoral Systems

Edited by Franco Malerba and Richard R. Nelson

Until recently, economists studying economic development have tended to consider it a universal process, or focussed their attention on common aspects. This book originates from the growing recognition of significant sectoral differences in economic development and examines the catching-up process in five different economic sectors: pharmaceuticals, telecommunications equipment, semiconductors, software, and agro-food industries. Each of these sector studies explore the learning and catch-up processes in various developing countries, in order to identify both the common features, and those which differ significantly across sectors and nations. The authors pay particular attention to China, India, Brazil, Korea and Taiwan.

Chapter 4: Explaining Variations in Semiconductor Catch-up Strategies in China, Korea, Malaysia and Taiwan

Rajah Rasiah, Xin-Xin Kong, Yeo Lin and Jaeyong Song

Subjects: development studies, development economics, economics and finance, development economics, economics of innovation, evolutionary economics, innovation and technology, economics of innovation

Extract

1 Rajah Rasiah, Xin-Xin Kong, Yeo Lin and Jaeyong Song 4.1 INTRODUCTION The evolution of semiconductor manufacturing was very much driven by precision control demands in the United States military but because of its complementary and enabler properties it is increasingly diffusing into the manufacture and use of many different products and processes. It is therefore very common to find semiconductor chips driving central panel control systems in the manufacture of steel and cement, CAD-CAM machines in garment making, monitoring of captive salmon, storing of graphic memory in digital cameras, powering computers, and providing control to computer numeric control (CNCs) and electronic device machines (EDMs). Although the processes of manufacturing semiconductor chips vary in sophistication – from simple transistors that replaced cathode ray tubes (CRT) in the transfusion of pictures in televisions to sophisticated microprocessors that power supercomputers – the design and fabrication of chips remain high technology. Hence, catch-up attempts in the industry have required lumpy investments in large physical plants, machinery and equipment, human capital and its requisite matching demand. Scale economies have not fallen despite continued miniaturization and the decomposition of semiconductor manufacturing vertically into chip design, chip fabrication, assembly and test. Even in Taiwan Amsden and Chu (2003) and Rasiah and Lin (2005) have argued that scale requirements have driven up firm size. Despite similarities, the sources of learning and innovation in the industry, as articulated by Malerba and Nelson in this volume, are expected to be different from the routes taken by firms in the other industries...

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