NO. 341 - INSTITUTIONAL CHALLENGES FOR CHINA’S CHIP INDUSTRY

In addition to the sectoral variation in the impacts of economic policymaking, the second reason that Ang and Heilmann’s explanations do not fully account for the apparent failure of China’s indigenous innovation policies for chips is that the policies are state-centric and pay less attention to the role played by firms. [...] The largest chipmakers at the time – Intel, Samsung and the Taiwan Semiconductor Manufacturing Company (TSMC) – invested in ASML in the 2010s, making a bet that EUV lithography machines would be necessary for the chip industry to continue sustaining Moore’s Law.27 Contrary to what Ang and Heilmann’s analyses of the economic policymaking process would suggest, the state-dominated institutional set-. [...] To provide context for the case comparison, I begin by unpacking the notion of an institutional set-up, followed by a selective overview of the global chip industry, and the position of the core and shadow cases within it. [...] The classifications are meant to signal the dominant actor shaping the chip industry but are not monolithic and do not discount the complex interactions between states, firms, and other players within the chip industry of the cases considered – this is addressed in the individual sub-sections on each case that follow. [...] Earlier, I described how Ang and Heilmann’s views of the economic policymaking process in China do not fully account for the apparent failure of indigenous innovation policies for the chip industry’s development owing to variation in the impact that policymaking processes have at the sectoral level, as well as the limited attention paid to the role of firms.