IDEAS home Printed from https://ideas.repec.org/p/cdl/indrel/qt0wv0k78t.html
   My bibliography  Save this paper

Offshoring in the Semiconductor Industry: Historical Perspectives

Author

Listed:
  • Brown, Clair
  • Linden, Greg

Abstract

Semiconductor design is a frequently-cited example of the new wave of offshoring and foreign-outsourcing of service sector jobs. It is certainly a concern to U.S. design engineers themselves. In addition to the current wave of white-collar outsourcing, the industry also has a rich experience with offshoring of manufacturing activity. Semiconductor companies were among the first to invest in offshore facilities to manufacture goods for imports back to the U.S. A brief review of these earlier manufacturing experiences and their impact on the fortunes of the domestic industry and its workers can help to illuminate the current debates over offshoring in services. Because meaningful data about the impact of the offshoring of chip design (and even manufacturing) are limited, we rely on a more qualitative analysis for our key points. We have conducted dozens of interviews with engineers and managers at numerous semiconductor and related companies in the United States, Asia, and Europe over the past six years. Our research also incorporates the rich store of publicly available information in trade journals and company reports. This paper describes the two previous stages of offshoring semiconductor assembly jobs and of outsourcing semiconductor manufacturing and the impact they had on the U.S. semiconductor industry. We argue that the initial concern about losing domestic jobs in both stages turned out to be unfounded as the industry used the situation to its competitive advantage by becoming cost competitive (assembly stage) and by developing the fabless sector (manufacturing stage). We then analyze the on-going stage of offshoring design jobs, and compare this stage to the two that came before in order to explore the possible impact on domestic jobs and the U.S. semiconductor industry. We begin in section one with a brief description of the stages of semiconductor production and our analytical framework. Section two looks at the offshoring of assembly jobs, and section three analyzes the foreign outsourcing of manufacturing. Section four explores the offshoring of design jobs, and concludes with a discussion of what this means for the U.S.

Suggested Citation

  • 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.
  • Handle: RePEc:cdl:indrel:qt0wv0k78t
    as

    Download full text from publisher

    File URL: http://www.escholarship.org/uc/item/0wv0k78t.pdf;origin=repeccitec
    Download Restriction: no

    References listed on IDEAS

    as
    1. repec:sae:ilrrev:v:54:y:2001:i:2a:p:450-465 is not listed on IDEAS
    2. Dieter Ernst, 2003. "Internationalisation of Innovation: Why Chip Design Moving to Asia," Economics Study Area Working Papers 64, East-West Center, Economics Study Area, revised Mar 2004.
    3. 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, vol. 12(3), pages 545-576, June.
    4. C. Alan Garner, 2004. "Offshoring in the service sector : economic impact and policy issues," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 5-37.
    5. Annalee Saxenian, 2002. "Transnational Communities and the Evolution of Global Production Networks: The Cases of Taiwan, China and India," Industry and Innovation, Taylor & Francis Journals, vol. 9(3), pages 183-202.
    6. Clair Brown & Ben Campbell, 2001. "Technical Change, Wages, and Employment in Semiconductor Manufacturing," ILR Review, Cornell University, ILR School, vol. 54(2), pages 450-465, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Tsai, Yingyi & Lin, Justin Yifu & Kurekova, Lucia, 2009. "Innovative R&D and optimal investment under uncertainty in high-tech industries: An implication for emerging economies," Research Policy, Elsevier, vol. 38(8), pages 1388-1395, October.
    2. repec:eee:tefoso:v:120:y:2017:i:c:p:14-23 is not listed on IDEAS
    3. Xu, Su Xiu & Lu, Qiang & Huang, George Q. & Zhang, Ting, 2013. "Scope economies, market information, and make-or-buy decision under asymmetric information," International Journal of Production Economics, Elsevier, vol. 145(1), pages 339-348.
    4. Yamashita, Nobuaki, 2008. "The impact of production fragmentation on skill upgrading: New evidence from Japanese manufacturing," Journal of the Japanese and International Economies, Elsevier, vol. 22(4), pages 545-565, December.
    5. Prema-chandra Athukorala, 2009. "The Rise of China and East Asian Export Performance: Is the Crowding-Out Fear Warranted?," The World Economy, Wiley Blackwell, vol. 32(2), pages 234-266, February.
    6. Prema-chandra Athukorala, 2008. "Trade and Investment Patterns in Asia : Regionalisation or Globalisation?," EABER Working Papers 21794, East Asian Bureau of Economic Research.
    7. Antelo, Manel & Bru, Lluis, 2010. "Outsourcing or restructuring: The dynamic choice," International Journal of Production Economics, Elsevier, vol. 123(1), pages 1-7, January.
    8. Kwok Tong Soo, 2014. "The gains from trade in intermediate goods," Working Papers 63719205, Lancaster University Management School, Economics Department.
    9. Yingyi Tsai & Ching-tang Wu, 2009. "Integrated Production And The Investment-Uncertainty Relationship," South African Journal of Economics, Economic Society of South Africa, vol. 77(1), pages 102-112, March.
    10. Nobuaki Yamashita, 2010. "International Fragmentation of Production," Books, Edward Elgar Publishing, number 13615.

    More about this item

    Keywords

    Offshore Employment;

    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:cdl:indrel:qt0wv0k78t. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff). General contact details of provider: http://edirc.repec.org/data/irucbus.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.