Small Business
Research Summary
United States Small Business Administration
Office of Advocacy
RS 143
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Technological and Organizational Diversity
and Technical Advance in the Early History of the American Semiconductor
Industry
by Wesley Cohen, Daniel Holbrook and Steven Klepper
1993. 240p. Completed by Social and Decision Sciences
Department, Carnegie Mellon University, Pittsburgh, PA 15213 under
contract no. SBA-5648-OA-90
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Purpose
The development of the semiconductor industry required technological
advances in many areas of science and engineering.
The nature of the technologies in the semiconductor industry is
such that there are few, if any, individuals with all of the expertise
needed to pursue innovations; teams of individuals must be assembled.
Research and development activities must be integrated with manufacturing
and marketing activities.
Understanding the role of small firms in the creation of technological
change has been a long-standing interest of the Office of Advocacy.
This study examines the early years of the semiconductor industry
and focuses on the diversity of firms involved in the technological
innovations of the developing industry.
Scope and Methodology
Secondary literature sources provided the basic data for industry
history. Technical publications and journals, trade magazines,
academic monographs, and other analyses of engineering and scientific
advances important to the evolution of the semiconductor industry
were surveyed. The design for the research and its implementation
were carried out by faculty members and a doctoral degree candidate
at the Carnegie Mellon University.
Research and development for technological advance in the semiconductor
industry was conducted in many areas. Three related technology
areas were chosen for in-depth examination: integrated circuits,
materials technology and device packaging. Choosing three such
closely related technologies helped the research focus on the
dynamics of technological advance where firms in an industry are
pursuing a broad and diverse array of innovative activities simultaneously.
Innovative activities are complementary and reinforce the general
process of technological advance.
Highlights
- The backgrounds of firms in the semiconductor and related
industries account for the diversity in their research activities.
In the earliest years of the industry, firms came from four basic
realms of activities: (1) electronics, (2) instrument makers or
users, (3) users of electronic equipment (such as aircraft making),
and (4) chemicals and other materials.
- The earliest firms entering the field were mainly those from
the electronics industry. Large businesses producing vacuum tubes,
such as Raytheon and RCA, were the main early entrants into the
industry in the early 1950s. They dominated the production of
semiconductor devices in the early years. At this stage there
were only a few firms established specifically to enter the semiconductor
industry.
- By the mid-1950s, as the market for the new devices grew,
new firms were founded and existing firms from other industries,
such as aircraft builders and instrument makers, began to pursue
semiconductor electronics. Many of the firms that entered the
industry during this period were doing work for the military or
other government agencies. While many of the new entrants did
not last long in the industry, others grew to dominate the industry.
- Small firms also began to cater to the emerging industry by
supplying materials and equipment. Many of these firms (chemical
firms, optical firms, and specialty metals firms) were established
firms entering a new market. These firms contributed to the development
of certain aspects of semiconductor technology.
- Small startup firms also entered the manufacturing end of
the industry. These firms as a rule were founded by small groups
of individuals, mostly men with experience in the then-infant
industry or in laboratories doing research in solid state electronics.
By the mid-1960s there were well in excess of one thousand firms
that were playing some part in the semiconductor industry.
- The semiconductor industry is characterized by great diversity
in firm size, and in the scientific and technological foundations.
The diversity of firms contributed to the efficiency of its technological
development. A large and diverse pool of firms participated in
the growth of the industry and each firm built on its previous
experience and followed approaches that built on its particular
strengths.
- The growing number and variety of applications for semiconductor
devices also contributed to the diversity of interests and perceptions
of the industry participants.
Ordering Information
The complete report is available from:
National Technical Information Service
U.S. Department of Commerce
5285 Port Royal Road
Springfield, VA 22161
(703) 487-4650
(703) 487-4639 (TDD)
Order Number: PB94-175700
Cost: A11; A03 Microf.
*Last Modified 6-11-01