Chapter 1 introduces the coevolutionary shift in the global electronics industry from the earlier multinational worlds of high-tech innovations and production in advanced economies prior to 1990 to the contemporary "interconnected worlds" of globalized electronics production throughout the 2010s. It argues that these interconnected worlds of electronics production are underpinned by complex global production networks centered in East Asia during the 2010s. As a dominant feature of today's global economy, these cross-border production networks represent perhaps the most critical industrial-organizational innovation, connecting diverse production sites in East Asia with the technological centers of excellence in North America, Western Europe, and East Asia. The chapter outlines the book's main arguments, and its theoretical and empirical analysis contributes to deeper understandings of geographical interconnections, changing organization, and competitive dynamics within four leading segments of the global electronics industry: semiconductors, personal computers, mobile handsets, and consumer electronics.
Chapter 2 examines in depth the changing fortunes of lead firms in the key segments of global electronics. In particular, I situate the emergence of new lead firms in the historical context of major industrial transformations in semiconductors, personal computers, and mobile handsets. Tracing in depth this historical evolution of key lead firms and major segments in global electronics is important and relevant for illustrating the book's main arguments on the political economy of global shift at the national scale in Chapter 1 and for setting the crucial industry context for the detailed analysis of new empirical material in later chapters focusing on the 2010s. Much more than consumer electronics, these three segments constitute the most significant drivers of global electronics today in terms of technological innovation, organizational change, and evolving geographies of global production networks.
Chapter 3 builds upon the recent conceptualization of global production networks to develop a theory of interconnected worlds. It offers a quick theoretical guide on how the organizational complexity and interconnectedness of the global economy can be better understood. Its core theoretical concern is with the causal dynamics of organizing and governing electronics production networks. The chapter conceptualizes complex interactions within global production networks through which firm-specific strategies and organizational innovations are causally driven by different competitive dynamics and risk environment that in turn account for the changing geographical configurations of global electronics production centered in East Asia during the 2010s. Presented in three main sections, this theory provides the conceptual framing on the geographical configurations ("where" in Chapter 4), causal drivers and competitive dynamics ("why" in Chapter 6), and firm-specific strategies ("how" in Chapter 5) of global production networks underpinning the interconnected worlds of innovation and production.
Chapter 4 draws upon both interview data and custom datasets to specify the complex geographical configurations of global electronics production centered in East Asia during the 2010–2018 period. The chapter's geographical analysis is conducted in two dimensions: industrial-organizational and intrafirm configurations. First, the industrial-organizational geography of global production networks is analyzed on the basis of the worldwide locations of semiconductor production and outsourced manufacturing activities in personal computers, mobile handsets, and televisions (together with panel display makers). Second, the intrafirm geography of production networks among the 44 firms interviewed is explored in relation to the worldwide locations of their key corporate functions, from headquarters and manufacturing facilities to R&D, product development, and sales and marketing operations. The chapter demonstrates conclusively the domination of Northeast Asia, particularly China, as key sites in global electronics manufacturing in all four major segments throughout the 2010s.
Chapter 5 focuses on how firm strategies and organizational innovations have centered electronics global production networks in East Asia. Yeung analyzes semiconductor production networks and top component suppliers for lead firms in personal computers and mobile handsets in 2015 and 2018 to determine insourcing and outsourcing strategies. This intrafirm sourcing analysis addresses the strategic choice of make/buy decisions confronting lead firms and specifies conditions under which insourcing might be preferred over outsourcing, such as innovation, market needs, and risk management. Second, interfirm control and partnership relationships with major customers exist and need to be organized and managed carefully in these different segments. These relationships go beyond lead firm-supplier relationships to include fabless-foundry, lead-firm–lead firm, strategic partner–supplier, and strategic partner–platform leader relationships. The section analyzes these interfirm network governance dynamics between lead firms and their key customers, suppliers, and strategic partners.
Chapter 6 provides causal accounts grounded in the theory of global production networks and explains the geographical configurations (where) and firm-specific strategies (how) of global electronics production centered in East Asia. First, lead firms are concerned with managing cost-capability ratios. Labor cost is important in assembly production, whereas logistics cost is critical to production network configurations. Second, market proximity and customer intimacy are important to locational decisions. New market dynamics in the Asia Pacific create the need to reach out to end customers. Third, financial discipline is significant in heavy capital investment by top semiconductor manufacturers and foundry providers. Finally, lead firms try to source from strategic suppliers with geographically distributed production networks to mitigate risks. Unfavorable government regulation and policies significantly impact geographical diversification of production networks. The chapter concludes with a comparative analysis of these four causal drivers in explaining production network configurations during the 2010s.
Chapter 7 examines the key issues and challenges confronting innovation and development in the interconnected worlds of global electronics characterized by the geographical concentration of production, stringent control and integration within global production networks, and profound uncertainties in market dynamics, technological shifts, and regulatory and geopolitical changes. I offer some concluding remarks on the book's key findings before discussing their major implications for business and public policy in the 2020s. For business, there is much need to be closer to end market customers and strategic suppliers in East Asia and other macroregions. Supply chain capability and network resilience will remain as core competitive advantages to future success. The chapter then addresses key implications for public policy oriented toward promoting economic development through participation in electronics production networks. The chapter ends with reflections on the book's conceptual and methodological lessons and research agendas for future work on global production networks.