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e-Business and Disintegration of the Semiconductor Industry Value Chain


  • Jeffrey Macher
  • David Mowery
  • Timothy Simcoe


This paper examines the influence of Internet-based e-Business applications on the vertical separation of design, manufacture, equipment production and process development in the global semiconductor industry. Vertical specialization has contributed to the rapid growth of semiconductor manufacturing capacity in Southeast Asia and the creation of new forms of international production networks linking design and manufacturing specialists. Although these trends began before the development of Internet-related e-Business applications, the Internet is facilitating these trends and their effects on the geographic distribution of manufacturing capacity. At the same time, however, many of the opportunities created by e-Business applications for vertically specialized firms should prove equally advantageous to integrated device manufacturers. Obstacles to e-Business applications in the global semiconductor industry include standardsrelated issues, data-security concerns, and the needs for far-reaching internal reorganization of business processes, especially by smaller firms. All of these obstacles suggest that the adoption of e-Business and the realization of its productivity benefits or cost efficiencies are likely to occur slowly.

Suggested Citation

  • Jeffrey Macher & David Mowery & Timothy Simcoe, 2002. "e-Business and Disintegration of the Semiconductor Industry Value Chain," Industry and Innovation, Taylor & Francis Journals, vol. 9(3), pages 155-181.
  • Handle: RePEc:taf:indinn:v:9:y:2002:i:3:p:155-181
    DOI: 10.1080/1366271022000034444

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    Cited by:

    1. Jarle Hildrum & Dieter Ernst & Jan Fagerberg, 2011. "The Complex Interaction between Global Production Networks, Digital Information Systems and International Knowledge Transfers," Chapters, in: Cristiano Antonelli (ed.), Handbook on the Economic Complexity of Technological Change, chapter 16, Edward Elgar Publishing.
    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. Alfonso Gambardella & Marco Giarratana, 2004. "Chandlerian Firms vs. Entrepreneurship," LEM Papers Series 2004/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Thomas Hutzschenreuter & Florian Gröne, 2009. "Changing Vertical Integration Strategies under Pressure from Foreign Competition: The Case of US and German Multinationals," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 269-307, March.
    5. PASHKEVICH, Volha & HAFTOR, Darek M. & PASHKEVICH, Natallia, 2021. "The information sector in Denmark and Sweden: Value, employment, wages," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    6. Costa Climent, Ricardo & Haftor, Darek M., 2021. "Value creation through the evolution of business model themes," Journal of Business Research, Elsevier, vol. 122(C), pages 353-361.
    7. Alberto Di Minin & Fabrizio Cesaroni & Andrea Piccaluga, 2004. "Industrial R&D in Italy: What are new dynamics of exploitation and exploration?," Working Papers 200404, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.
    8. Jeffrey T. Macher, 2006. "Technological Development and the Boundaries of the Firm: A Knowledge-Based Examination in Semiconductor Manufacturing," Management Science, INFORMS, vol. 52(6), pages 826-843, June.
    9. Lajili, Kaouthar & Mahoney, Joseph T., 2005. "Revisiting Agency and Transaction Costs Theory Predictions on Vertical Financial Ownership and Contracting: Electronic Integration as an Organizational Form Choice," Working Papers 05-0106, University of Illinois at Urbana-Champaign, College of Business.
    10. Alberto Di Minin & Fabrizio Cesaroni & Andrea Piccaluga, 2005. "Industrial R&D in Italy: Exploration and Exploitation Strategies in Industrial R&D," Working Papers 200502, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.
    11. Li, Yung-Ta & Huang, Mu-Hsuan & Chen, Dar-Zen, 2014. "Positioning and shifting of technology focus for integrated device manufacturers by patent perspectives," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 363-375.
    12. Witold J. Henisz & Jeffrey T. Macher, 2004. "Firm- and Country-Level Trade-offs and Contingencies in the Evaluation of Foreign Investment: The Semiconductor Industry, 1994–2002," Organization Science, INFORMS, vol. 15(5), pages 537-554, October.
    13. Gwo-Hshiung Tzeng & Chi-Yo Huang, 2012. "Combined DEMATEL technique with hybrid MCDM methods for creating the aspired intelligent global manufacturing & logistics systems," Annals of Operations Research, Springer, vol. 197(1), pages 159-190, August.

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