In Japan and Europe, by far the most important forum of government support for the microelectronics sector is in the area of research and development. Government funds are being channeled into a number of large industry-government R&D consortia with both pre-competitive and commercial themes. Typically these projects are sustained, long-term efforts involving the principal firms in each country, with very substantial government funding levels. In both Europe and Japan, the main government-sponsored programs are designed to enhance national advantage with respect to what are seen as the fastest potential-growth end-markets, such as wireless and wired telecommunications and digital home appliances. The U.S. industry, which dominates PC-based end markets, is seen as vulnerable as non-PC end markets grow as a proportion of the total market for semiconductors.
The Worldwide Semiconductor Manufacturing Corporation and Acer, both of which have been absorbed by TSMC, received substantial financial support from the China Development Industrial Bank, a government bank with the mission of providing long-term credit and investment funds to strategically important industries. “Account Update—Taiwan,” The Asian Banker Journal April 19, 2000; “Management Statement,” China Industrial Development Bank at >. Taiwan’s attraction of high-technology industries is documented in National Research Council, Conflict and Cooperation, p. 33, Box A.
It is not within the scope of this paper to address the question of whether the U.S. government should provide support to the U.S. commercial semiconductor industry—such as through financing for capital investment or support for applied research aimed at producing a specific products. Any major-scale proposal of such an initiative would be so controversial that it is unclear whether it could be implemented. Rather—in light of the major technical challenges facing the industry and the scale and increases in interventions in this industry by governments abroad—a more practical question relates to what positive role, if any, the U.S. government can play. Such a role might be a part of a broader U.S. response— one that does not contravene conventional U.S. views about the appropriate place of government in the economy.
The European resurgence in microelectronics has been based in substantial part on European strength in wired and wireless telecommunications markets. As in Japan, European regulatory policy has resulted in a single wireless standard, rather than the five incompatible standards that characterize the U.S. market. The European telecommunications industry has itself benefited from a series of long-term, large-scale European Union-sponsored R&D projects that began in the 1980s and continue today.
“An Executive Report on the MEDEA Programme: Mid-Term Assessment,” Future Horizons, online report, , accessed on July 19, 1999. ASML’s proposed acquisition of SVGL, the principal remaining U.S. lithography firm, supports this perspective, although at this writing the acquisition has not yet been approved.
Long-term research is inherently uncertain, and the payback can be decades in the future. Furthermore, basic research can result in revolutionary technologies that undermine the existing product areas upon which the established firms rely on for their success. Economists have also described the so-called appropriability problem: because of the broad applicability of the results of fundamental research, it is difficult—if not impossible—for a company to capture all the economic returns from its research investments—and to prevent their competitors from doing so. Hence, individual firms tend to invest less in fundamental research than would be optimal for society.35
In the U.S. there have been various [government] measures that recognize the importance of the semiconductor industry, which is the basis of defense and all industries; a semiconductor revival resulting from those measures; the activation of private-sector investments, along with that; and ideal cooperation between industry and universities that supports the semiconductor industry...[T]he U.S. activated cooperative semiconductor-related efforts such as SEMATECH that involved industry, government and universities from the viewpoint of the importance of semiconductors as a key technology for all industries. In order to win in the 21st century, we must, at all cost, rework the strategy we have lost.10
out a significant market segment based on the design and production of specialized devices for these markets, which are growing rapidly as a proportion of the total end-market for semiconductors. The principal European and Japanese R&D programs are major, sustained, long-term efforts of five or more years’ duration that are often succeeded by follow-on efforts of comparable or greater length.
As used by this rule, minerals means coal, lignite, oil, gas and other minerals in, under and that may be produced from the Land, together with all rights, privileges, and immunities relating thereto. The Policy is not an abstract of title nor does a Company have an obligation to determine the ownership of any mineral interest. A Company may insert into a Policy or any other title insuring form an exception or an exclusion for minerals as provided below:
The most significant initiative was the Defense Department’s sponsorship of SEMATECH, a research and development consortium established to ensure U.S. leadership in semiconductor-manufacturing technology. This initiative and many others in the microelectronics field benefited from support from the Defense Advanced Research Projects Agency, a small Defense Department agency that supports long-term R&D with commercial as well as military value.
When examination of title discloses that restrictive covenants have expired by their terms, or if in the opinion of counsel, the restrictive covenants are void and unenforceable by statute, have been effectively released, or have been cancelled by final judgment of a court of competent jurisdiction binding upon all of the property owners and lienholders affected by said restrictions, the Company may delete the restrictive covenant exception prescribed in the policy forms.
In an Owner or Mortgagee Policy, the Company shall have the right to make a general exception as to the Rights of Parties in Possession, as that term is hereinafter defined, on the condition that Insured executes a written instrument stating that Insured waives inspection of the property and that Insured is satisfied to accept the policy subject to such general exception. In all such cases, the Company must retain and preserve said written instrument. If such inspection is made by the Company, it may charge its reasonable and actual cost therefor. As used herein and in Owner and Mortgagee Policies, the term "Rights of Parties in Possession" shall mean one or more persons who are themselves actually physically occupying the property or a portion thereof under a claim of right adverse to the record owner of the property as shown in Schedule A of the policy. In no event shall the term "Rights of Parties in Possession" include any right, claim or interest which is evidenced by a document recorded in the county where all or part of the property is located.