IDEAS home Printed from https://ideas.repec.org/a/oup/indcch/v16y2007i2p239-267.html
   My bibliography  Save this article

Design complexity, vertical disintegration and knowledge organization in the semiconductor industry

Author

Listed:
  • Ludovic Dibiaggio

Abstract

This article examines the advantages and drawbacks of internal knowledge integration versus collaborative outsourcing as two polar modes of governance in the design of application-specific integrated circuits (ASICs). Increasing technological complexity, miniaturization and the generalization of markets for technology have induced higher integration constraints for designers. The pace of innovation and frequent changes in design rules require a tightly controlled design process. As a consequence, knowledge integrators must develop expertise beyond the scope of their domain of activity if they are to ascertain the overall efficiency of systems. We find that although internalization of knowledge integration reduces coordination and agency-related costs, the involvement of partner firms in upstream design phases facilitates knowledge sharing and improves the coordination of innovation in modules. The analysis of the evolution of the ASICs industry shows that while large system integrators remain the dominant players, specialist firms are gaining market shares and do not hesitate to embark on the design of leading-edge systems. This result may simply reveal the increasing value of component knowledge in a disaggregated value chain. However, relying on a comparative case study of two similar development processes (one with each of the knowledge integration approaches) we confirm the strength of decentralized modes of governance on the condition that partner firms engage in a long-term relationship. Copyright 2007 , Oxford University Press.

Suggested Citation

  • Ludovic Dibiaggio, 2007. "Design complexity, vertical disintegration and knowledge organization in the semiconductor industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 16(2), pages 239-267, April.
    • Handle: RePEc:oup:indcch:v:16:y:2007:i:2:p:239-267
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/icc/dtm006
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Didier, Nicolas, 2024. "Turning fragments into a lens: Technological change, industrial revolutions, and labor," Technology in Society, Elsevier, vol. 77(C).
    2. Diego Damásio Lima & Daniel Pacheco Lacerda & Miguel Afonso Sellitto, 2017. "Systemic Analysis of the Brazilian Production Chain of Semiconductors: Graphic Representation and Leverage Points," Systemic Practice and Action Research, Springer, vol. 30(3), pages 295-316, June.
    3. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    4. Namchul Shin & Kenneth L. Kraemer & Jason Dedrick, 2017. "R&D and firm performance in the semiconductor industry," Industry and Innovation, Taylor & Francis Journals, vol. 24(3), pages 280-297, April.
    5. Qiao Guangshun & Lu Yulin, 2024. "Operating Efficiency in the Capital-Intensive Semiconductor Industry: A Nonparametric Frontier Approach," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 18(1), pages 1-17, January.
    6. Stephan Manning & Silvia Massini & Carine Peeters & Arie Y. Lewin, 2018. "The changing rationale for governance choices: Early vs. late adopters of global services sourcing," Strategic Management Journal, Wiley Blackwell, vol. 39(8), pages 2303-2334, August.
    7. Chila, Vilma & Devarakonda, Shivaram, 2024. "The effects of firm-specific incentives (stock options) on mobility and employee entrepreneurship," Journal of Business Venturing, Elsevier, vol. 39(3).
    8. repec:bla:jomstd:v:47:y:2010:i:s2:p:1510-1533 is not listed on IDEAS
    9. 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.
    10. Stephan Manning & Silvia Massini & Carine Peeters & Arie Lewin, 2012. "Global Co-Evolution of Firm Boundaries: Process Commoditization, Capabilities Development, and Path Dependencies," Working Papers CEB 12-009, ULB -- Universite Libre de Bruxelles.
    11. Michael G. Jacobides & Sidney G. Winter, 2012. "Capabilities: Structure, Agency, and Evolution," Organization Science, INFORMS, vol. 23(5), pages 1365-1381, October.
    12. Wang, Chi-Tai & Chiu, Chui-Sheng, 2014. "Competitive strategies for Taiwan's semiconductor industry in a new world economy," Technology in Society, Elsevier, vol. 36(C), pages 60-73.
    13. Malik, Ashish & Froese, Fabian Jintae & Sharma, Piyush, 2020. "Role of HRM in knowledge integration: Towards a conceptual framework," Journal of Business Research, Elsevier, vol. 109(C), pages 524-535.
    14. Gries, T. & Grundmann, R. & Palnau, I. & Redlin, M., 2015. "Does technological change drive inclusive industrialization? : A review of major concepts and findings," MERIT Working Papers 2015-044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. Guangshun Qiao & Zhan-ao Wang, 2021. "Vertical integration vs. specialization: a nonparametric conditional efficiency estimate for the global semiconductor industry," Journal of Productivity Analysis, Springer, vol. 56(2), pages 139-150, December.
    16. Albert Jolink & Eva Niesten, 2012. "Hybrid Governance," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 12, Edward Elgar Publishing.
    17. Cheng, Liang-Chieh (Victor), 2011. "Assessing performance of utilizing organizational modularity to manage supply chains: Evidence in the US manufacturing sector," International Journal of Production Economics, Elsevier, vol. 131(2), pages 736-746, June.
    18. Jolink, Albert & Niesten, Eva, 2012. "Recent qualitative advances on hybrid organizations: Taking stock, looking ahead," Scandinavian Journal of Management, Elsevier, vol. 28(2), pages 149-161.
    19. Guangshun Qiao, 2021. "Does the asset-light business model create value? A panel data stochastic frontier approach for the global semiconductor industry," Economics Bulletin, AccessEcon, vol. 41(3), pages 1125-1138.
    20. Gilsing, Victor & Vanhaverbeke, Wim & Pieters, Michiel, 2014. "Mind the gap," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 351-362.
    21. Chollet, Barthélemy & Revet, Karine, 2023. "Digging deep or scratching the surface? Contingent innovation outcomes of seeking advice from geographically distant ties," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:indcch:v:16:y:2007:i:2:p:239-267. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/icc .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.