and production capabilities made possible by applications of photonics technologies.

PRODUCTION AND INNOVATION IN PHOTONICS TECHNOLOGIES: THREE CASE STUDIES

This section presents three case studies—displays, solar cells, and optoelectronics components for the converging communications and computing industry—to examine trends in the offshoring of manufacturing and the relationship between manufacturing and innovation. All three deal with optic and photonic applications based on semiconductor technologies that originated in AT&T Bell Laboratories and other large corporate laboratories. While all three cases have similarities, important differences among them have implications for innovative performance, industry structure, and public policy. It is noteworthy that there is a continued need for increased resolution, smaller features, and increased packing density in all cases of production technologies. This need will drive a need for optical sources and imaging tools supporting the increase in resolution.

Displays

Of the three industries, the earliest to move manufacturing overseas from the United States was displays. As discussed by Macher and Mowery in the National Research Council report Innovation in Global Industries: U.S. Firms Competing in a New World,2 although the technological foundations of the display industry were developed in the United States in the 1960s, the industry’s production operations quickly migrated to Japan and then to Korea and Taiwan.3 By 1995, liquid-crystal displays (LCDs) accounted for greater than 95 percent of flat panel display sales by value and thin-film transistor (TFT) LCDs accounted for more than 90 percent of LCD sales, having first found their way into application in calculators, then in cell phones and computers applications, and more recently, as prices continued to decline, largely replacing cathode ray tubes in television receivers.4 Large TFT LCDs accounted for about 75 percent of the value of TFT LCD sales, although the unit production volume of small and medium-size LCDs was five to six times that of large TFT LCDs.5 TFT LCDs remain the dominant display technology.

TFT LCD manufacturing and innovation have their roots in the United States

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2 National Research Council. 2008. Innovation in Global Industries: U.S. Firms Competing in a New World (Collected Studies), J.T. Macher and D.C. Mowery, eds. Washington, D.C.: The National Academies Press.

3 National Research Council. 2008. Innovation in Global Industries.

4 National Research Council. 2008. Innovation in Global Industries.

5 National Research Council. 2008. Innovation in Global Industries.



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