Abstract

This paper analyzes the growth process in the Japanese IC (Integrated Circuit) industry during the 1960s and 1970s and focuses on the interfirm relations (specifically, the relations between IC firms and NTT) and intrafirm relations in the development process of ICs for usein communication equipment.The Electrical Communication Laboratory (ECL) of NTT and several semiconductor firms, so to speak “DEN-DEN Families” that have supplied NTT with communication equipment continuously, frequently collaborated in the development of advanced ICs, and ECL initiated the development of advanced ICs that use the “admission principle.” In addition, ECL transferred the state-of-the-art technologies of ICs to DEN-DEN Families. Different from the Division of Defense in the United States, which primarily ignored cost issues in the procurement of ICs, NTT perceived the importance of cost-down activities. Moreover, DEN-DEN Families had competed and cooperated with each other for a long time. The interaction between IC engineers and communication equipment engineers within each firm has been important.In comparison to the 1960s, in the 1970s NTT collaborated more actively with member firms and used technology levels appropriate to each. NTT was thereby able to alleviate the strict in testing standards for the ICs. Also, NTT was able to realize low costs more effectively.The rise of the composition of exports in the communication equipment market led to more intensive interaction between IC engineers and communication equipment engineers within Japanese semiconductor firms. Moreover, even in the development of ICs for use in communication equipment, Japanese firms realized the importance of lowering costs.

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