Buyer–vendor relations for components: The extreme example of custom integrated circuits

Abstract

This study uses the extreme example of custom integrated circuits (ICs) to investigate the generality of the findings of buyer–vendor relations research. There are some important parallels between the two situations, in the nature of safeguards for example. Yet, because the technological complexity and vendor size for custom ICs are greater than for the typical component, there are also some noteworthy differences. As examples, the technological complexity of a vendor's manufacturing process locks a buyer into the continued production of a given IC and, other things equal, the vendor's large size hampers it from playing an important role in development. Findings are based on a set of multiple case studies examining partnerships utilized by computer, telecommunications and auto firms.