ABSTRACT
This chapter discusses the phenomenon of offshore assembly. It provides an analysis of American trade in semiconductors and brief observations on Japanese and European trade. Semiconductor companies operate extensive networks of foreign subsidiaries; they also have networks of international licensing agreements, along with some international joint ventures and minority equity-ownership positions. The major strategic factor influencing the establishment of offshore assembly by American firms in the developing countries was the goal of cost-reduction. International trade is of major importance to the American semiconductor industry, but much of the trade is intrafirm and involves offshore assembly. The policies toward trade of the Japanese and European governments have been rather different from those of the United States. Japanese components of certain designated manufactured imports, including various types of semiconductors, can be granted relief from duty upon reimport with the prior authorization of customs officials.
