The Emergence of Tools Suppliers in the Semiconductor Industry

While the R&D intensive semiconductor tools industry has become pivotal to the advancement of technology and the growth of the downstream semiconductor chip manufacturing industry, this was not always the case. In the early stages of the industry, the chip manufacturers made their own tools in-house. Using data at the initial stages of the industry and a wealth of publicly available information from interviews with industry pioneers conducted as part of oral history projects, I examine how (i) market size (ii) intellectual property protection (iii) geographic proximity to downstream firms, influenced the process of emergence of the tools suppliers.