Cover Image


View/Hide Left Panel

It is the wrong question because it focuses on producers rather than users of the technology, where the real economic being lies. What do users of the technology, by which I mean producers of computer, telecommunications, or consumer electronics products, such as TVs, need from producers of the chips? They need timely access to the appropriate technology (and by "appropriate," I mean the right quality and functionality) at a reasonable cost.

We go through patterns, both because of the cycles in this industry of government intervention and patterns of private investment. We go through times in which it looks like there will be just a few dominant producers of a set of relevant technologies and, therefore, that some set of users somewhere in the world will not be guaranteed timely access to the appropriate technology at a reasonable cost.

So we counterbalance that with government policies and industry initiatives aimed at recreating some capacity within the location, in Europe behind protective walls, in the United States through the semiconductor trade agreement and investment in SEMATECH, in Asia these days through a variety of concerted government and business relationships. The aim is to keep everyone honest in the market, to ensure that your users of the technology have timely access at a reasonable cost.

That type of government intervention is going to continue. It will continue if only to support the ability of firms to do the types of cooperative deals that these panelists have been talking about. It is much easier to negotiate the benefits from those cooperative relationships from a position of strength with a government standing behind you than it is from a position of weakness.

Again, the danger, given the fact that we are going to have intervention, is that the pattern of intervention concentrates production in some part of the world to the detriment of users and producers in another part of the world. It is going to get much more expensive to recreate a capacity once lost in this industry. Therefore, the prudent position—and I think even Europe has taken it—is to maintain at least a modest ability on which you can continue to build and keep everyone else in the market honest over time.

The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement