new devices and new applications for national defense. The pervasive impact of the microelectronics sector on the nation’s well-being—through improved communications, advances in health care, and better national security technologies— underscores the importance of the United States’ role as the world’s preeminent semiconductor producer.

This report focuses attention on the regional and national programs that have emerged around the world both to nurture local semiconductor industries and to help maintain the industry’s exceptional growth rates. Specifically, the report highlights public-private partnerships in Europe, Japan, Taiwan, and the United States that seek to address the technical challenges faced by the global semiconductor industry. A unique feature of this report is that it provides the views of leaders in semiconductor research (from industry and academia) from Japan, Europe, Taiwan, and the United States. These experts came together to discuss common technical challenges facing the industry and the programs various nations and regions have undertaken to address them. In addition, the report contains original research, including an assessment of the major U.S. consortium, SEMATECH, and a summary of the programs of major producing countries and regions of the world. The diversity and scale of these programs underscore the sustained policy attention and support the industry receives in many parts of the world.

Most policy makers understand and accept that U.S. industry competes in a global marketplace. It is less widely appreciated that while the competition may be global in scope, the outcomes of this competition have important local and, ultimately, national consequences. Globalization therefore implies the need to learn about the policies and programs of all participants in this industry. Learning the scope, structure, and focus of other nations’ programs is potentially valuable, both as a point of comparison and as a means of learning from the experiences of others in designing and managing cooperative programs.


This report addresses three significant developments and the associated policy implications of these developments.

Productivity Growth

The first development, noted above, is the major contribution of the semiconductor industry to the productivity growth that has characterized the U.S. economy in the latter half of the 1990s as well as the early part of the new decade.4 Given the industry’s positive impact on economic growth, sustaining the


The contribution of semiconductors to the economy is not reviewed here. Recent analysis by the Board on Science, Technology, and Economy Policy does document this impact of information tech

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