Semiconductor Capabilities in the U.S. and Industrializing Asia


The semiconductor industry has a rich experience with the offshoring of manufacturing activity. Semiconductor (or chip) companies were among the first to
invest in offshore facilities to manufacture goods for import back to the U.S. Because meaningful data about the extent of the offshoring 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 twelve years. Our research also incorporates the rich store of publicly-available information in trade journals and company reports.

The paper begins in section one with a brief description of the stages of semiconductor production and our analytical framework. Section two summarizes the
offshoring of activities by the industry. Section three provides a more detailed discussion of the offshoring of design. Section four compares engineer capabilities in the relevant countries of Asia, where most offshoring occurs. Section five profiles the chip industry in Taiwan, China, and India. And Section six concludes with an outlook for the chip industry in the investing and host countries.