The innovator's non-dilemma: the case of next-generation lithography
AbstractPrevious studies have analyzed how incumbents may falter when they focus too narrowly on satisfying the needs of current customers at the expense of pursuing innovations that will ensure future market leadership. This paper examines this 'dilemma' faced by incumbents and considers cases where incumbents do spearhead innovation on the technology frontier thus enabling future product generations. In particular, we examine the case of the semiconductor industry confronting a technological discontinuity in the production of chips. In anticipation of a discontinuity in the lithography production module, leading firms in the semiconductor industry have initiated next-generation lithography (NGL) projects. These projects have exhibited an unprecedented level of horizontal and vertical cooperation. Our research analyzes how such cooperative research and development (R&D) programs allow incumbent innovators to mitigate four areas of uncertainty-leadership, preemption, performance, and industry adoption. We adapt a Hotelling location model to demonstrate the tension between mitigating these uncertainties through interfirm cooperation and the possibility of increased downstream competition. Such tensions have influenced cooperation within and across the R&D consortia pursuing NGL led by IBM, Intel, and Bell Labs. Copyright © 2008 John Wiley & Sons, Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.
Volume (Year): 29 (2008)
Issue (Month): 5 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Henderson, Rebecca., 1994.
"Of life cycles real and imaginary : the unexpectedly long old age of optical lithography,"
WP 3661-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Henderson, Rebecca, 1995. "Of life cycles real and imaginary: The unexpectedly long old age of optical lithography," Research Policy, Elsevier, vol. 24(4), pages 631-643, July.
- Reinganum, Jennifer R., 1982.
"Uncertain Innovation and the Persistence of Monopoly,"
431, California Institute of Technology, Division of the Humanities and Social Sciences.
- Reinganum, Jennifer F, 1983. "Uncertain Innovation and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 73(4), pages 741-48, September.
- Gilbert, Richard J & Newbery, David M G, 1982. "Preemptive Patenting and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 72(3), pages 514-26, June.
- Marco Iansiti, 2000. "How the Incumbent Can Win: Managing Technological Transitions in the Semiconductor Industry," Management Science, INFORMS, vol. 46(2), pages 169-185, February.
- Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-21, January.
- Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
- Suzumura, Kotaro, 1992. "Cooperative and Noncooperative R&D in an Oligopoly with Spillovers," American Economic Review, American Economic Association, vol. 82(5), pages 1307-20, December.
- Linden Greg & Mowery David C. & Ham Ziedonis Rosemarie, 2000. "National Technology Policy in Global Markets: Developing Next-Generation Lithography in the Semiconductor Industry," Business and Politics, De Gruyter, vol. 2(2), pages 1-22, August.
- Suzanne Scotchmer, 1991. "Standing on the Shoulders of Giants: Cumulative Research and the Patent Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 29-41, Winter.
- Amir, Rabah, 2000.
"Modelling imperfectly appropriable R&D via spillovers,"
International Journal of Industrial Organization,
Elsevier, vol. 18(7), pages 1013-1032, October.
- Rabah Amir, 1998. "Modelling Imperfectly Appropriable R&D via Spillovers," CIE Discussion Papers 1998-07, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Lange, Knut & Müller-Seitz, Gordon & Sydow, Jörg & Windeler, Arnold, 2013. "Financing innovations in uncertain networks—Filling in roadmap gaps in the semiconductor industry," Research Policy, Elsevier, vol. 42(3), pages 647-661.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.