| The DRAM (Dynamic Random Access Memory) industry is traced in great detail from its birth in 1970 to its present shape in 1993. An immediate result of this research is that most of the tenets of the established paradigm on the microelectronics industry are challenged with implications for economic and strategic theory, industrial policy and international trade. Dumping and strategic underpricing are found to be much less prevalent in the Japanese penetration of international markets while factors like changes in the market and industry structure, including the institutional environment and capital underinvesting in the United States, are suggested as the major cause of such penetration. Regarding the creation, development, and acquisition of technology, it is found that Japan relied to a much larger extent on indigenous effort than acknowledged in the literature. On the theoretical side, it is found that, at the level of the industry, Schumpeterian and Neo-Schumpeterian arguments appear to fit the facts much better than neoclassical ones, while at the level of the firm dynamic capabilities arguments appear to fit the facts much better than traditional defensive strategic management principles. The microelectronics international market paradigm has taken shape under the inspiration of orthodox (neoclassical) economic principles. Hence the preoccupation with costs, prices, and profit maximization at the level of the industry and of the firm, and with defensive posturing and deterrence measures when dealing with corporate strategy. On the other hand, the Schumpeterian perspective yields a fresh interpretation of the recent history of the international microelectronic industry. This interpretation emphasizes innovation, incessant technological inter-firm rivalry, uncertainty, dynamic comparative advantage, and learning economies at the level of the industry, and dynamic capabilities at the level of the firm. |
