This book explains the resurgence of Japan's IC giants, their global status, and their strengths and weaknesses. Empirical scrutiny of their evolution is complemented by the author's own theory of the most appropriate method for studying the dynamics of long-term industrial change.

While the Japanese motor vehicle and consumer electronics industries have been relatively well analysed, there are no comprehensive up-to-date studies of the Japanese IC industry. This book addresses the questions consequently left unanswered: How were Japanese IC companies able to catch up with their western rivals - and in some cases overtake them? How have Japanese IC companies responded to the 'post-IBM' world of computing? Why do they remain primarily dependent on the Japanese market?

Why do they combine competences in computers, semiconductors, and telecommunications equipment, while their US counterparts are far more specialized? What role has been played by the Japanese government and the system of controlled competition in their success? Will Japanese IC companies become increasingly competitive internationally in the future?

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The author extends the evolutionary approach to the organization of the firm and industry developed by such writers as Schumpeter, Nelson, Winter, and Chandler. He argues that in order to understand the evolution of companies and industries, it is necessary to create a theory of the firm capable of encompassing the development of real firms in the real world in real time.

This approach stresses the importance of the beliefs that are constructed in the firm under conditions of 'interpretive ambiguity', which guide the firm's decisions and its reactions to new technologies. These concepts are illustrated by lengthy analyses of NEC and NTT, and of the computing, switching, and optical fibre industries.