"Strategy and Circumstance: the Response of American Firms to
Japanese Competition in Semiconductors, 1980-1995"
BY: RICHARD N. LANGLOIS
University of Connecticut
Department of Economics
W. EDWARD STEINMUELLER
University of Sussex
SPRU Science and Technology Research
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Date: December 1999
Contact: RICHARD N. LANGLOIS
Email: Mailto:Richard.Langlois at UConn.edu
Postal: University of Connecticut
Department of Economics
332 Monteith
341 Mansfield Road
Storrs, CT 06269 USA
Phone: (860)486-3472
Fax: (860)486-4463
Co-Auth: W. EDWARD STEINMUELLER
Email: Mailto:W.E.Steinmueller at sussex.ac.uk
Postal: University of Sussex
SPRU Science and Technology Research
Mantell Building
Falmer
Brighton BN1 9RF, East Sussex UNITED KINGDOM
ABSTRACT:
The transistor was an American invention, and American firms led
the world in semiconductor production and innovation for the
first three decades of that industry's existence. In the 1980s,
however, Japanese producers began to challenge American
dominance. Shrill cries arose from the literature of public
policy, warning that the American semiconductor industry would
soon share the fate of the lamented American consumer
electronics business. Few dissented from the implications: the
only hope for salvation would be to adopt Japanese-style public
policies and imitate the kinds of capabilities Japanese firms
possessed.
But the predicted extinction never occurred. Instead, American
firms surged back during the 1990s, and it now seems the
Japanese who are embattled. This remarkable American turnaround
has gone largely unremarked upon in the public policy
literature. And even scholarship in strategic management, which
thrives on stories of success instead of stories of failure, has
been comparatively silent.
Drawing on a more thorough economic history of the worldwide
semiconductor industry (Langlois and Steinmueller 1999), this
essay attempts to collect some of the lessons for strategy
research of the American resurgence. We argue that, although
some of the American response did consist in changing or
augmenting capabilities, most of the renewed American success is
in fact the result not of imitating superior Japanese
capabilities but rather of taking good advantage of a set of
capabilities developed in the heyday of American dominance.
Serendipity played at least as important a role as did strategy.
JEL Classification: L1, L5, L6, N6