Technological evolution of the semiconductor industry

New forces are emerging in the semiconductor industry. These are likely to change the pattern and speed of technical change in that industry. The changes include: (1) movement towards greater service and customer orientation; (2) higher prices for technology sales; (3) greater emphasis on strategic alliances for technology and market sharing; and (4) greater U.S. government involvement in protecting the U.S. industry. All factors point to an increase in market power of the large firms. The next five years will be a transitional period during which various adjustments will be made to the evolving strategies of the firms. During this period, we have no reason to believe that there will be any slowing down in the pace of technical change. Thereafter, i.e., once the new structure matures, the pace of change is likely to slow down.