ABSTRACT
This chapter examines the nature and extent of these connections within the semiconductor industry. It focuses on private sector arrangements. Foreign direct investment is a major dimension of competitive strategy in the semiconductor industry. Few acquisitions of American semiconductor firms occurred before 1975, and those that did occur were of small ailing firms, often by large American conglomerates. Foreign direct investment into Japan is at much lower level than into Europe. Until the mid-1970s, Japanese government policy required approval of all foreign direct investment into Japan in the semiconductor industry. Private-sector research corporations are a novel institution for research and development (R&D) in the semiconductor industry. The research focus is on generic technology that directly relates to the competitive interests of member firms. Private-sector research corporations are a novel institution for R&D in the semiconductor industry. The most active semiconductor merchant firm is Motorola.
