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System-on-a-chip integration in the semiconductor industry: industry structure and firm strategies

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  • Greg Linden
  • Deepak Somaya

Abstract

Miniaturization has spurred ever-increasing on-chip integration in the semiconductor industry so that large-scale electronic systems can now be put on a single chip. The proliferation of such 'systems-on-a-chip' has important repercussions for the structure of the electronics industry, and the strategies of electronics firms. In a detailed case study, we apply a theoretical framework developed in Somaya and Teece ['Combining inventions in multi-invention contexts: organizational choices, intellectual property rights, and public policy,' SSRN Working Paper (available at: www.ssrn.com) 2001] to understand how system-on-a-chip integration is altering the balance between integrated approaches, components trading, and the licensing of 'design modules' (DM) in the semiconductor industry. Consistent with the framework, we observe a burgeoning market for licensed DMs in the industry, along with the primarily in-house design approach being pursued by large integrated firms. Important technical and institutional factors that are shaping industry structure, and the strategies being pursued by different types of firms are documented. Based on the framework, implications are drawn for firm strategy in response to technological shifts of the kind engendered by system-on-a-chip in the semiconductor industry. We extend the Somaya--Teece framework to include firm strategies that seek to influence the institutional environment in which they operate, and thus alter the balance between competing organizational modes. Copyright 2003, Oxford University Press.

Suggested Citation

  • Greg Linden & Deepak Somaya, 2003. "System-on-a-chip integration in the semiconductor industry: industry structure and firm strategies," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 12(3), pages 545-576, June.
  • Handle: RePEc:oup:indcch:v:12:y:2003:i:3:p:545-576
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    Cited by:

    1. Morricone, Serena & Munari, Federico & Oriani, Raffaele & de Rassenfosse, Gaetan, 2017. "Commercialization Strategy and IPO Underpricing," Research Policy, Elsevier, vol. 46(6), pages 1133-1141.
    2. Gianluigi Giustiziero & Tobias Kretschmer & Deepak Somaya & Brian Wu, 2023. "Hyperspecialization and hyperscaling: A resource‐based theory of the digital firm," Strategic Management Journal, Wiley Blackwell, vol. 44(6), pages 1391-1424, June.
    3. Emmanuel Coblence & Valérie Sabatier, 2014. "Articulating Growth and Cultural Innovation in Art Museums : The Louvre's Business Model Revision," Grenoble Ecole de Management (Post-Print) hal-01346974, HAL.
    4. Brown, Clair & Linden, Greg, 2007. "Semiconductor Engineers in a Global Economy," Institute for Research on Labor and Employment, Working Paper Series qt6fr9b2p9, Institute of Industrial Relations, UC Berkeley.
    5. Sturgeon, Timothy J. & Kawakami, Momoko, 2010. "Global value chains in the electronics industry : was the crisis a window of opportunity for developing countries ?," Policy Research Working Paper Series 5417, The World Bank.
    6. Lee, Jong-Seon & Kim, Nami & Bae, Zong-Tae, 2019. "The effects of patent litigation involving NPEs on firms’ patent strategies," Technological Forecasting and Social Change, Elsevier, vol. 149(C).
    7. Basant, Rakesh, 2004. "Intellectual Property and Innovation: Changing Perspectives in the Indian IT Industry," IIMA Working Papers WP2004-06-05, Indian Institute of Management Ahmedabad, Research and Publication Department.
    8. Dalziel, Margaret, 2007. "A systems-based approach to industry classification," Research Policy, Elsevier, vol. 36(10), pages 1559-1574, December.
    9. Triulzi, G., 2014. "Technology life cycle and specialization patterns of latecomer countries: The case of the semiconductor industry," MERIT Working Papers 2014-012, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Sigurdson, Jon, 2004. "Vlsi Revisited – Revival In Japan," EIJS Working Paper Series 191, Stockholm School of Economics, The European Institute of Japanese Studies.
    11. Zhang, Gupeng & Xiong, Libin & Duan, Hongbo & Huang, Dujuan, 2020. "Obtaining certainty vs. creating uncertainty: Does firms’ patent filing strategy work as expected?," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    12. Epicoco, Marianna, 2013. "Knowledge patterns and sources of leadership: Mapping the semiconductor miniaturization trajectory," Research Policy, Elsevier, vol. 42(1), pages 180-195.
    13. Tzeng, Cheng-Hua, 2010. "Managing innovation for economic development in greater China: The origins of Hsinchu and Zhongguancun," Technology in Society, Elsevier, vol. 32(2), pages 110-121.
    14. Pellens, Maikel & Della Malva, Antonio, 2016. "Changing of the guard: Structural change and corporate science in the semiconductor industry," ZEW Discussion Papers 16-050, ZEW - Leibniz Centre for European Economic Research.
    15. Brown, Clair & Linden, Greg, 2005. "Offshoring in the Semiconductor Industry: Historical Perspectives," Institute for Research on Labor and Employment, Working Paper Series qt0wv0k78t, Institute of Industrial Relations, UC Berkeley.
    16. Marianna Epicoco, 2013. "Knowledge patterns and sources of leadership: Mapping the semiconductor miniaturization trajectory," Post-Print hal-03381305, HAL.
    17. Brown, Clair & Linden, Greg, 2010. "Managing Knowledge Workers in Global Value Chains," Institute for Research on Labor and Employment, Working Paper Series qt1h3013gn, Institute of Industrial Relations, UC Berkeley.
    18. H. Kevin Steensma & Mukund Chari & Ralph Heidl, 2015. "The quest for expansive intellectual property rights and the failure to disclose known relevant prior art," Strategic Management Journal, Wiley Blackwell, vol. 36(8), pages 1186-1204, August.
    19. Emmanuel Coblence & Valérie Sabatier, 2014. "Articulating Growth and Cultural Innovation in Art Museums : The Louvre's Business Model Revision," Post-Print hal-01346974, HAL.
    20. SCHOLZ, Eva-Maria, 2014. "Licensing to vertically related markets," LIDAM Discussion Papers CORE 2014020, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    21. Karin Beukel & Minyuan Zhao, 2018. "IP litigation is local, but those who litigate are global," Journal of International Business Policy, Palgrave Macmillan, vol. 1(1), pages 53-70, June.
    22. Bilgehan Uzunca & Bruno Cassiman, 2023. "Entry diversion: Deterrence by diverting submarket entry," Strategic Management Journal, Wiley Blackwell, vol. 44(1), pages 11-47, January.
    23. Basant, Rakesh & Chandra, Pankaj, 2007. "Role of Educational and R&D Institutions in City Clusters: An Exploratory Study of Bangalore and Pune Regions in India," World Development, Elsevier, vol. 35(6), pages 1037-1055, June.
    24. Kim, Jin-Hyuk & Komatsu, Takehiko & Owan, Hideo, 2020. "The role of design method and process technology in stable outsourcing equilibria," International Journal of Industrial Organization, Elsevier, vol. 69(C).

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