way, which complicates efforts to develop strong conclusions concerning the consequences of these trends. Remarkably, after more than 30 years of intensive study of the internationalization of R&D and other innovation-related activities in the semiconductor industry, the data on these trends remain fragmented and limited in their coverage. Nevertheless, the results of our analysis highlight several distinctive trends in the globalization of innovation-related activities in this industry:
The share of industry-funded R&D investment devoted to offshore R&D by U.S. firms in “electronics components” manufacturing (an industry category that includes semiconductors, along with several other electronics product segments) grew only modestly during 1985-2001.
The number of technology-development alliances in the global semiconductor industry declined during the 1990s, although alliances among foreign firms appear to have grown more substantially than alliances among U.S. semiconductor firms during this period.
Process-technology R&D remains “homebound” in the home countries of U.S. and non-U.S. semiconductor firms, based on trends in the siting of “development” fabrication facilities (“fabs”).
The patenting activity of large U.S. integrated semiconductor firms (those that both design and manufacture their products) remains predominantly “homebound,” with little increase in offshore inventive activity in their patents during the period 1991-2003.
Patenting by European, Japanese, and Taiwanese semiconductor firms is similarly dominated by domestic inventive activity and this dominance by “home country” inventive activity appears to have increased slightly during the period 1996-2003.
The patenting activity of U.S. “fabless” semiconductor firms, which design and market but do not manufacture their products, indicates modest growth in offshore inventive activity during the period 1991-2003.
Although the vast majority of inventive activity undertaken by non-U.S. firms remains homebound, the United States is the predominant location for offshore inventive activity of all but Canadian semiconductor firms.
There is little evidence that the changing international structure of U.S. semiconductor firms’ innovation-related activities has had negative consequences for engineering employment in the U.S. semiconductor industry, reflecting the limited offshore movement of innovation-related activities documented by these indicators.
Taken as a whole, our findings underscore the importance of a broad view of the array of activities that contribute to innovation in the semiconductor industry. These results also highlight the influence of growing vertical specialization on the globalization of innovation in this industry. Interestingly, the expanded offshore