SEMATECH - PURPOSE AND PERFORMANCE

In previous research, we have found a steep learning curve in the prod uction of semiconductors. We estimated that most production knowledge remains internal to the firm, but that a significant fraction ''spills over'' to other firms. The existence of such spillovers may justify g overnment actions to stimulate research on semiconductor manufacturing technology, The fact that not all production knowledge spills over, m eanwhile, creates opportunities for firms to form joint ventures and s lide down their learning curves more efficiently. With these considera tions in mind, in 1987 14 leading U.S. semiconductor producers, with t he assistance of the U.S. government in the form of $100 million in an nual subsidies, formed a research and development (R&D) consortium cal led Sematech, In previous research, we estimated that Sematech has ind uced its member firms to lower their R&D spending, This may reflect mo re sharing and less duplication of research, i.e., more research being done with each R&D dollar. If this is the case, then Sematech members may wish to replace any funding withdrawn by the U.S. government, Thi s in turn would imply that the U.S. government's contributions to Sema tech do not induce more semiconductor research than would otherwise oc cur.