Semiconductors: Explaining Variations in Catch-up Strategies in Malaysia, China, Taiwan and Korea

Rajah Rasiah, University of Malaya

Following Schumpeter’s argument on innovation as the driver of growth, Nelson and Winter’s articulation of institutions and institutional change and Malerba’s attempt to capture all the drivers of catch-up, this paper examines the development of the semiconductor industry in China, Korea, Malaysia and Taiwan. The differences between the experiences of these economies not only vary from sheer land, population and resource differences, but also in government policy and firm-strategy
With consequent differences in the level of catch up experienced by firms in these economies. Taking the above this paper seeks to map, examine and compare the drivers of catch up in the semiconductor industry in the four countries. The rest of the paper is organized as follows. Section two examines the evolution of the industry. Section three looks at the trajectories of evolution of lead semiconductor firms in the four countries. Korean and Taiwanese semiconductor firms have already reached the technology frontier in DRAMs and transistors. Chinese firms have reached the frontier in transistors and are closing the gap on DRAMs. Malaysian firms are still confined to assembly and test operations, as well as, reengineering of mature technologies to drive new products. Section four focuses on the pillars of catch, viz., process technology, product technology and spillovers to other firms. Section five discusses the building blocks or drivers of catch up, viz., demand conditions, human capital, access to foreign knowledge, government policy, firm-level strategies, networks and co-evolution. Wide variations exist in the nature and depth of drivers in the four countries. Section six finishes with the conclusions and implications.

About the speaker
Rajah Rasiah is currently professor of technology and innovation policy at University of Malaya, and is also distinguished honorary professorial fellow at the Maastricht Economic and Social Research and training centre on Innovation and Technology (UNU-MERIT). He has obtained his doctorate in Economics from Cambridge University in 1992 and his research specialization includes science and technology policy, learning and innovation, foreign investment, cluster mapping and designing technology roadmaps with fieldwork research experience in Brazil, Cambodia, China, Costa Rica, India, Indonesia, Japan, Germany, Kenya, Korea, Lao, Malaysia, Mexico, Namibia, Philippines, Sri Lanka, South Africa, Taiwan, Thailand, Uganda, Netherlands and the United States. He has published over 100 internationally refereed articles in journals and books. Among his research books include Foreign Capital and Industrialization in Malaysia (1995, Basingstoke:Macmillan) and Foreign Forms, Technological Capabilities and Economic Performance: Evidence from Africa, Asia and Latin America (2004, Cheltenham: Edward Elgar). He has also undertaken consultancies for UNCTAD, World Bank, UNIDO, UNDP, Harvard Institute of International Development (HIID), Asian Development Bank (ADB), UNESCAP, JETRO, FES and Stanford Research International (SRI). As one of the globally recognized experts on technology, foreign investment and development, he has been one of the commentators of World Investment Report for UNCTAD since 2001 and the Least Developed Economies Report for the UN since 2005.

Venue: Conference room, 4th Floor, Keizer Karelplein

Date: 18 September 2007

Time: 16:00 - 17:30  CET