Semiconductor Industry in Japan and Korea

8/18/2019 Semiconductor Industry in Japan and Korea

1/18

Latecomer Strategies:Semiconductor Industry

in Japan and Korea

Arbiyanti Febthavia Azhar (z50!"#$

%anyu &ang (z50'))"$

Ju*ita &idyastuty (z5050')$


2/18

+resentation Agenda

• ,ar-y mover vs Latecomers

• +ositiona- Advantages o. Latecomer Firms

• S/i--s and esources• 1haebo-s vs Keiretsu

• Frame*or/: Absorptive 1apacity

•

Frame*or/: 2echno-ogy 2ra3ectory• 1omparisons o. Latecomer Firms

• 1onc-usion

• 1-ass 4iscussions


3/18

,ar-y overs versus Late 1omers

• A 6rm may have ear-y mover advantagesor -atecomer disadvantages7

• Latecomers have room to overcome theear-y mover advantages or -atecomerdisadvantages7 Furthermore8 being -ate

a9ords certain advantages7


4/18

,ar-y over Advantages

S*itching1osts

•1onsumer-oya-ty

• 2ransactioncosts

• Forma-contracts

+reemption• Input .actors•+roductioncapacity•ar/etsideopportunities

Learning by4oing• 2echno-ogica--eadership• Learning curvee9ect•;vercomingmar/etcomp-e


5/18

Latecomer Advantages

)7 1hanges inconsumertastes

=7 1hanges intechno-ogies

7 Freeridere9ects• 1onsumer

education• In.ormation

spi--over• S/ipping tria-s and

errors

ar/et

Incumbentinertia• Loc/in o.

assets>resources• ;rganizationa-

inertia

1ompetition

,nhanced -eve-o. in.ormation• esource.u-ness• Shared e


6/18

Positional Advantages of

Latecomer Firms

,nvironmenta-

S/i--s?

esources


7/18

S/i--s and esources

Japan

• Se@uentia- competencybui-dingand top management

-eadership7 – Securing ta/e o9 in the ne*

industry

– astering manu.acturing s/i--s

– ui-ding techno-ogica- -eadership

• 2echno-ogica--y -eap.rog

invest in ne* processtechno-ogies

• 4omestic riva-ry andgovernment support

Korea

• ep-icating the Japanese

strategy – egan *ith a particu-ar

product segment and 4A

– Invested in the sateo.theart manu.acturing .aci-itiesand process techno-ogies

• ,ntrepreneuria- -eadership• 4omestic riva-ry and

government support


8/18

1haebo-s Bs Keiretsu

Chaebols

• Fami-y embers

• 1entra-ized• Fami-y members in top

management

• e-ationship *ith

government ishierarchica-

• Financia- supportcame .rom

government

Keiretsu

•

Less Fami-y embers• 4ecentra-ized

• ore pro.essiona-managers

•e-ationship *ithgovernment is e@ua-

• an/ as a center o.Keiretsu


9/18

Frame*or/: Absorptive 1apacity

2echno-ogica-capabi-ity high

and rising rapid-y

2echno-ogica-capabi-ity high

but .a--ing

2echno-ogica-capabi-ity -o*

but rising

2echno-ogica-capabi-ity -o*

and .a--ing rapid-y

%IC%

%IC%

L;&

L;&

,


10/18

&here *as KoreaD

Technological capability lowbut rising

2he Intensity o. ,9ort

,


11/18

&hat about JapanD

Technological capability high and

rising rapidly7o Strong ?4 and education its capacity

to use imported techno-ogy ecient-y7

o Increasing on imported techno-ogy anddomestic ?47


12/18

Frame*or/: 2echno-ogy 2ra3ectory

Advanced Countries:

• F-uid: radica- product innovation8 ne* techno-ogies8

changeab-e product and mar/et• 2ransition: product design8 mass production8 competition

• Speci6c: innovation8 ne* entrants8 incrementa- innovation8-o*er cost

eveloping countries:

• Ac@uisition: ac@uire techno-ogies .rom advanced countries8production process

• Assimi-ation: di9use *ithin the country8 competition

• Improvement: mature techno-ogies


13/18

J K


14/18

Japan Korea

Ac@uisition • )"50s: -icense o. Americanpatents

• Shi.t .rom thermionic va-vesto transistors

• +roduced radios

• )"#5: initia- investment byKomy E7S7 assemb-y p-ant

• mid)"!0s: .oreigninvestment (2oshiba$

assemb-y -ine

Assimi-ation

• )"#: SharpGs ne* producttransistor e-ectronicca-cu-ator

•

)"#')"'): H,1 increased50 in corporate capita-• )"'=: 2oshiba -aunched

4A bui-ding manu.acturingcompetence

• 2oshibaGs success in 4Ahave inspired Koreancompanies

•

)"'0: estab-ished theirpresence on massive sca-e• )"'5: SamsungGs

aggressive investment inmanu.acturing .aci-ities andre-ated process techs

Improvement

• )"!0s: H,1 increased ?4e


15/18

2he 4eTransistor export (no. of devices$

Semiconductor sales

Source: A !istory of the "orld #emiconductor $ndustry %http:&&www'wtec'org&loyola&(ei&welcome'htm


16/18

1omparisons o. Latecomer Firms

#imilarities i)erences

Ac@uired techs .rom E7S7 Japan: -icense .rom E7S7

Korea: A--iance *ith E7S7

Find the most suitab-e productsand directions in the ear-y stage(Japan: transistors Korea: 4A$

Korea: on-y .ocusing on 4A

Investment in mass productionand re-ated techs

Japan entered the industryear-ier than Korea Korea gote


17/18

Insight.u- Lessons .rom Japanese and Korean1ompanies

o ;dd timing Japanese companies adoption o. ne*process techno-ogies and Korean companiesaggressive investment

o 2ime compression by mobi-izing the directe


18/18

4iscussion uestions

)7 1ompared to Japan8 Korea *as a-so/no*n as the -ate entrant inSemiconductor industry7 %o*ever8 in=0) Korea became the second -argest

semiconductor supp-ier in the *or-da.ter outpacing JapanGs mar/et share.or the 6rst time7 &hat do you thin/ isthe /ey .actor o. the success.u- o.KoreaD

=7 &hy did JapanGs semiconductorindustry .a--D

Semiconductor Industry in Japan and Korea

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