CHAPTER THREE

VIRTUAL EMPIRE: THE INTERNATIONALIZATION OF

SEMICONDUCTOR PRODUCTION

Silicon Valley International: The Geography and Political Economy of Semiconductor

Expansion Southeast Asia

The mixing of Cold War and Open Door policies in the Kennedy

Trade Expansion Act produced an equally mixed record of success

in the Cold War front-line states of Southeast Asia. From the

standpoint of Santa Clara Valley semiconductor manufacturers, the

establishment and growth of the high-tech industry in East and

Southeast Asia was dramatically successful. As a Cold War policy

tool to promote the development of indigenous industries in

front-line developing nations, the record of U.S. electronics and

semiconductor multinational corporations (MNCs) is more

ambiguous. U.S. multinational corporations proliferated rapidly

throughout the 1960s. The U.S. government discovered that, while

it was relatively easy to stimulate the growth of MNCs through

trade liberalization and enabling tax and tariff subsidies, it

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was much more difficult to regulate their activities, much less

keep the operations of multinationals within a complimentary

foreign policy framework. Multinationals and national

governments do not inherently share the same set or ordering of

interests in operations abroad. With the benefit of over a

decade of observations on the interaction between foreign policy

and direct foreign investment, a 1978 GAO report noted:

The United States has extended its jurisdiction through the extraterritorial application of its domestic laws relating to antitrust,tax, national security, etc. The extraterritorial application of such legislation is not designed to use the firms as a foreign policy tool, but rather to prevent them from frustrating U.S. laws and regulations through their subsidiaries' activities abroad. A result, however, can be the creation of new international tensions. ... Multinationals conduct direct negotiations, often with political implications, with host country governments with or without U.S. knowledge and approval. Like nation-states, many large multinationals conduct various economic and political assessments of actual and potential markets.

Multinationals have also used controversial tactics to influence the policies and decisions of some nations. The use of "questionable payments" or bribery to influence foreign officials has contributed to internal

political crises in the governments of several U.S. allies. ... Even though the U.S. Government plays no role in these activities, the perception that the firms are often used as tools of U.S. foreign policy means

the U.S. Government will most likely bear a burden of guilt by association.1

1 U.S. General Accounting Office, Report to Congress by the Comptroller General of the United States. U.S. Foreign Relations and Multinationals: What's the Connection? (Washington D.C.:Government Printing Office, August 23, 1978), pp. ii-iv. Note: The intent of the TEA was to use Multinationals as a policy tool to spur development in developing countries as part of a national security policy and – mistakenly – as a means to increase exports and reduce the balance of payments deficit. MNCs fulfilled neither of these expectations particularly well.

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On the other side of the issue, shipping factories to

foreign shores had its own set of challenges. “Bribery to

influence foreign officials” was often initiated by host country

officials as a customary and expected part of doing business.2

Coordinating international production flows was considerably more

complicated than shipping parts between facilities located in the

same region. Managing a work force that often had no experience

in industrial discipline and a completely different set of

customs and forms of social relations posed a particularly

daunting task for American managers of foreign plants. While the

evolution of international webs of commerce and trade is a

natural outgrowth of industrial capitalism, the establishment of

international webs of production does not follow the same logic

as the globalization of markets they serve. Though government

mediation is necessary to keep markets connected and commerce

flowing smoothly across borders, establishing and coordinating

international flows of production is a task on a much higher 2 “Meaning and Ramifications of National Semiconductor’s Choice of Thailand asElectronics Investment Site,” in Business Asia: Weekly Report to Managers of Asia/Pacific Operations, June 1, 1973, pp. 169-70. Note: Off-handed references can be found in numerous business articles about SE Asia. National Semiconductor’s decision to establish a plant in Thailand was described in this article as a choice between a long list of positive factors weighed against: bureaucratic red tape, corruption, transportation, and port clearance delays.

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order of difficulty for both industry and government. It cannot

and would not happen if governments did not provide incentives

over and above the benefits of a lower-wage workforce.3

Despite the added layers of difficulties posed by offshore

production, Fairchild's success in establishing assembly plants

in Hong Kong and Korea was quickly emulated by other Santa Clara

Valley (and U.S.) semiconductor and electronics plants throughout

the 1960s and 1970s. The prospects for significantly reduced

labor costs, generous benefit packages from Southeast Asian

countries, inducements by U.S. tariff reductions, and a strong

U.S. foreign policy committed to maintaining a stable and non-

communist Southeast Asia offset the liabilities confronting U.S.

semiconductor firms that transferred production to the region at

the height of the Vietnam War. Southeast Asia represented a

fantastically fertile labor market. In Singapore, for instance,

nine U.S. semiconductor plants were established between 1967 and

3 General Accounting Office, U.S. Foreign Relations and Multinationals . . ., pp. 34-36. Providing tax and tariff subsidies are two obvious incentives, but the GAO report includes a list of less obvious government services available to multinational corporations including: providing market information and support, protection against expropriation of property, legal and diplomatic intervention on behalf of MNC officials and employees, mediation of disputes between MNCs and host governments, and – in extraordinary situations - military intervention.

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1971. Approximately, 14,000 workers were employed in these

plants; the vast majority of them were young women.4 Malaysia

developed closely on the heels of Singapore, with the number of

electronics establishments rising from 41 in 1970, to 137 in

1974, while electronics employment rose from 3,200 to 27,000 in

that same period.5 By 1979, between 200,000 and 300,000 women

were employed in U.S. electronics production plants in Southeast

Asia alone.6

The intense domestic and growing international competition

in the 1960s semiconductor industry expanded the drive toward

reducing production costs wherever and whenever possible into an

ever-widening international arena. The industry moved

aggressively into Europe, establishing advanced wafer fabrication

plants in Scotland, France, Germany, and Italy to skirt European

tariffs. It moved with equal speed and purpose to transfer low-

tech, labor intensive assembly operations into Latin America and

East and Southeast Asia. The primary attraction to relocating 4 Pang Eng Fong and Linda Lim, The Electronics Industry in Singapore: Structure, Technology and Linkages (Singapore: Chopmen Enterprises, 1977), pp. 14-22.5 K.C. Cheong, et Al., Comparative Advantage of Electronics and Wood-Processing Industries in Malaysia (Tokyo: Institute of Developing Economies, 1981), p. 4.6 Susan S. Green, "Silicon Valley’s Women Workers," in June Nash and Maria Patricia Fernandez-Kelly, eds., Women, Men and the International Division of Labor (Albany: State University of New York Press, 1983), pp. 288. Note: Over 90% ofelectronics plants in the region were owned by foreign multinationals and U.S.multinationals owned the majority of these.

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production to developing nations was to reduce the cost of

circuit board and memory chip assembly. Assembly represented

between 50-80% of the cost of integrated circuits (ICs) at that

time, and all of these regions contained large pools of young,

unemployed or peasant women. 7

The electronics assembly industry had adopted its gendered

division of labor from an older electrical industry that had

relied heavily on women's labor since the turn of the century.8

Southeast Asia presented a particularly rich labor market in this

regard, as noted by the Wall Street Journal:

Electronic companies depend on hundreds, sometimes thousands of young girls to do the painstaking job of assembling tiny parts that are shipped home for use in computers and other products. Labor represents as much as half the cost of these parts, so the cheaper the labor, the higher the profits.

Because of sections 806.3 and 807, re-import duties were

assessed only on value-added by wages. Since the vast majority

7 William D. Hartley, “Electronic Firms Rush to Malaysia as Labor Gets Costly and Scarce Elsewhere in Asia,” in the Wall Street Journal, September 20, 1973, p. 36. 8 For the history of women in the electrical industry, see Ruth Milkman, Gender at Work: The Dynamics of Job Segregation by Sex during World War II (Chicago: University of Illinois Press, 1987), pp. 12-64. Milkman notes that in 1910, one-third of the operatives in the electrical industry were young women. By 1939, some areas of assembly, such as electrical lamps, incorporated as much as 77% female labor. More highly skilled, heavy electrical industry production such as industrial machinery production employed over 80% male labor on assembly lines.

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of assembled circuit boards were destined for final assembly in

U.S. plants into products for sale in the United States, Santa

Clara Valley companies such as Fairchild, Hewlett-Packard, and

National Semiconductor were able to more than offset the costs of

shipping components overseas and back through the reduced labor

costs and minimal import fees. An additional incentive for the

semiconductor industry was that most assembled circuits could be

shipped by air because of their small size and low weight, an

advantage Congress could not foresee in passing Section 806.3

legislation in 1953. The speed of air shipments ensured

production flows between plants in far-flung regions were not

seriously interrupted.

Between 1963 and 1980, the rapid dispersal of production

from Hong Kong to Korea and Taiwan, then to Singapore and

Malaysia, and subsequently to Indonesia, Thailand and the

Philippines followed a pattern in which, with rising labor costs

and the approach of the expiration of tax-free "pioneer status"

in one country, American companies responded by moving production

to nations with cheaper labor and more amenable tax laws,

environmental and labor regulations, and less requirements for

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joint ventures or technology transfers to the host countries.

Even if they did not move production facilities, U.S. firms

rarely built new plants in the same nation, since inevitably, an

"even later" developing nation would offer a more attractive

package of benefits. A 1973 Wall Street Journal article explicitly

illustrated this dynamic:

The first big wave of electronics companies hit Asia about a decade ago but those companies settled in places such as Hong Kong, South Korea, Taiwan and Singapore. At the time those spots had hordes of

unemployed, easily attainable workers. But that is no longer the situation . . . labor is becoming scarce and costly in those locales - so companies are now looking elsewhere, mostly southward, mostly to

Malaysia and occasionally to Indonesia.9

“Costly labor was $1.05 per day in Taiwan, as opposed to $.30

per day in Malaysia.10 U.S. electronics firms followed lower

costs from country to country. This large-scale dispersal of

production reveals a sort of " en echelon" development pattern

moving south and west along the rim of East and Southeast Asia.

Labor costs and benefits packages offered by host nations

competing for the establishment of electronics firms within their

borders were the primary reasons for this migration of

production. The success of foreign investment-led

9 Ibid.10 Michael D. Hartley, “Electronics Firms Rush to Malaysia . . .,” p.36.

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industrialization in Hong Kong, Taiwan, and South Korea became a

development model for Southeast Asian nations. Hong Kong,

Taiwan, and South Korea had all rapidly developed indigenous

electronics industries from the benefits of joint venture and

technology transfer clauses in their initial relationships with

U.S. companies, following a development model pioneered by Japan

in the early and mid-twentieth century.11

While the “pull” of lower wages and the “push” of favorable

U.S. tax and tariff policies may have been enough incentive for

companies to ship their production offshore, the additional

benefits of the competition between developing nations for direct

foreign investment further mitigated the risks of such a move.

Adopting the Northeast Asian development models, individual

Southeast Asian nations began to seek foreign investment to

promote industrial development almost immediately after each

nation broke free of their colonial yokes. Since the early

11 The Japanese auto industry is a product of joint ventures with GM and Ford in the Pre-World War II era, in which Nissan and Mitsubishi appropriated the necessary knowledge and skills from U.S. companies through the experiences of workers in joint-venture plants. More formal technology transfers, such as the sale of CMOS memory chip designs by RCA to Japanese semiconductor firms resulted in lucrative royalties’ payments for RCA in the short run, but enhanced Japanese competitiveness in world memory chip markets in the long run; Japanese companies eventually became dominant in key areas of the memory chip market in the early 1980s. Fred Warshofsky, The Chip War: The Battle for the World of Tomorrow (New York: Charles Scribner's Sons, 1989), pp. 314-16.

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1960s, Malaysia, for instance offered 7-10 year "pioneer status"

(tax exemptions) to investing companies, and also engaged in

building "industrial estates," enclaves for multinational

industries in which the state invested heavily in providing

power, transportation, and housing infrastructure.12 In the

early 1970s, the Wall Street Journal was effusive in reviewing the

incentives offered to electronics industries by the Malaysian

government:

To date, 53 electronics companies have sought and won approval for factories here, and the country's success in luring them provides a textbook example for other developing countries . . . Because electronics companies wanted free import of parts for assembly, Malaysiaset up free-trade zones for factories. Because companies prefer to operate in three work turns, Malaysia amended the labor law to allow all-night work. Because foreign companies like full ownership, Malaysia abandoned its requirements for joint ventures. Because taxes can be a huge cost of doing business, Malaysia offers companies up to 10 tax-freeyears. What's more, Malaysia has a stable government and a reasonably efficient bureaucracy with a minimum of corruption, executives here say.Another plus: Most people speak English, so it’s easy to train the girls.13

“Stability” was a base requirement for multinational corporations

and a critical policy goal for American national security and

host country national security interests alike. The irony of

this emphasis is that, even as it formed a nexus for

international cooperation during the Cold War, semiconductor 12 Far Eastern Economic Review 1969 Yearbook, p. 227; Mike Langberg, “Malaysia pursueshigher high tech." San Jose Mercury News, January 17, 1997, p. 1C.13 William D. Hartley, "Electronics Firms Rush to Malaysia . . .,” p. 36.

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companies’ emphasis on “innovation” as a competitive strategy

exacerbated the instability of the high-technology sector itself

and destabilized Southeast Asian national economies.

The constant introduction of new generations of

semiconductors frequently led to periods of overproduction and

lagging demand as consumer electronics industries struggled to

assimilate ubiquitous advances in semiconductor design and

function.14 The competition between developing countries to host

U.S. electronics and semiconductor production facilities also

created instability in the emerging global economy. Competition

between Southeast Asian states for multinational production

facilities continued to intensify throughout the 1970s.

Thailand, Indonesia, and the Philippines offered similar tax

relief, labor and environmental incentives, and the provision of

industrial infrastructure to those offered by Singapore and

Malaysia to induce electronics industries to locate in their

countries. Business Asia, reporting on National Semiconductor’s

14 Note: Robert Noyce drove home this point before Congress in 1973 when he stated that: “Because of the newness of the technology and rapid growth rate the product has an extremely high obsolescence rate . . . Rapid obsolescence is created by and creates a high degree of competition with respect to productinnovation and consequent technological advances.” U.S. Congress, Trade Reform, Part 10, pp. 3261.

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decision to establish a plant in Thailand, noted the following

incentives as crucial to NS’ decision: a large supply of low cost

labor; good air connections to almost anywhere; the absence of

troublesome union problems; relatively cheap land and building

costs; an adequate supply of power; exemption from ‘Alien

Business and Alien Occupation Laws’ for up to eight years of

duty-free imports of parts and materials; and an exemption from

joint-venture requirements of part Thai ownership of the

subsidiary. The last issue was resolved by allowing National

Semiconductor to own 99.6% of the subsidiary.15 Consequently

Thailand gained a plant that produced several thousand low-wage

jobs, but gave up the joint venture requirement instituted to

seed an indigenous industry in the process of closing the deal.

In turn, Malaysia and Singapore were edged out of expanding their

multinational production enclaves.

The intensity of competition in the “market” for hosting

high-tech multinational production facilities compromised the

Northeast Asian development model for later developing Southeast

15 “Meaning and Ramifications of National Semiconductor’s Choice of Thailand .. .,” pp. 169-70.

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Asian nations. Incentives such as duty-free imports, tax breaks,

the waiving of environmental and labor regulations, and the

provision of electrical and transportation infrastructure

multiplied as states marketed their reserve labor. In some

cases, Southeast Asian states extended pioneer status to keep

companies from moving factories to neighboring states, thus

foregoing tax revenues from multinational operations

indefinitely. One touch of irony is that the most recent state

to offer incentives in hopes of attracting high tech production

was the first to benefit from U.S. electronics overseas

expansion: Hong Kong. Nearly abandoned as a manufacturing center

by U.S. electronics producers who moved to lower wage areas, Hong

Kong has recently undertaken a campaign to reinvigorate the

electronics production industry by attracting Silicon Valley

high-tech companies to reestablish operations there.16

By the early 1970s, however, American semiconductor and

electronics firms became less willing to create new competitors 16 "Malaysian Cybercity: High hopes for high tech at opening," in San Jose Mercury News. July 9, 1999, p. C1. Noted in the article is Hong Kong’s construction of a new “cyberpark in hopes of attracting Silicon Valley companies back to the region. In 1999, Malaysia topped even its previous construction of FTZ industrial complexes by opening a planned and fully Internet-wired city called "Cyberjava," south of Kuala Lumpur, in hopes of attracting a full range of hardware, software, and Internet companies to the region. The “city” stands largely empty at this writing because of the industry downturn of 2001-02.

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by agreeing to joint ventures and technology transfers.

Throughout the 1970s, concerns among American manufacturers about

technology transfers became increasingly acute. In 1978, J. Fred

Bucy, president of Texas Instruments warned: "Today our toughest

competition is coming form foreign companies whose ability to

compete with us rests in part on their acquisition of U.S.

technology . . . The time has come to stop selling our latest

technologies, which are the most valuable things we've got."17

Complaints by Bucy and other semiconductor leaders spurred

immediate federal investigations in the House and Senate, the

National Security Council, the Office of Science and Technology

Policy, the International Trade Commission, the National Science

Foundation, and the departments of State, Defense, Treasury,

Commerce, and Labor.18 Between the industry's growing reluctance

to agree to patent sales, technology transfers, and joint

ventures with host countries, and the institution of new federal

regulations restricting sensitive technology transfers, Southeast

Asian nations that came relatively late to the high-tech

development table, including China, were forced to drop their 17 Patricia Langan, "Those Worrisome Technology Exports," in Fortune, May 22, 1978, p. 106.18 Ibid.

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demands in these areas. Consequently, they were limited to a role

as manufacturing platforms for multinational high-tech

industries. They did not, as envisioned by the TEA and host

country policies, develop competitive domestic industries and

remained dependent on maintaining tax incentives to retain

multinationals within their borders. This dynamic diminished the

benefits of high-tech MNCs to regional and national economies.19

Even so, Southeast Asian nations continued to aggressively

court American high-tech industries as engines of development,

partially out of fear of being left out of what had, up to that

point, been a successful development model for East Asian states

such as Taiwan and South Korea and, perhaps, partially out of the

ideological seduction of the mystique of Silicon Valley as a

model for 21st Century economic development - a mystique which is

as powerful today as it was 25 years ago. The disparity between

the initial recipients of U.S. production facilities and

19 Note: Licensing Fees from international firms to companies with U.S. patents grew from less than $5 billion in 1977 to over $7 billion in 1981, before dropping to less than $6 billion for most of the decade. In the late 1980s, royalties and fees rose to nearly $12 billion as smaller high tech firms began to license their technologies to raise capital to operate in highly competitive world markets. The primary benefit of these transfers, however, accrued to the already industrialized nations of Northeast Asia, as small firms were drawn to both the capital and mature manufacturing capabilities of the industries in Japan, Korea, and Taiwan. Louis Uchitelle, "Small Companies Going Global," in the New York Times, November 27, 1989, p. 1B.

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latecomers to the game was apparent by 1985. Where Hong Kong (6

locally-owned companies), Korea (17), and Taiwan (19) had

developed modest to booming indigenous high-tech industries,

Southeast Asian nations like Malaysia (2), Singapore (1),

Thailand (2), and Indonesia (0) developed almost exclusively as

hosts to multinational industries, despite their relatively

larger share of total electronics production in the region.20

As a result of the failure of Southeast Asian nations to

develop their own independent high-tech industries, international

competition between the nations of Southeast Asia to attract and

maintain multinational semiconductor and electronics production

had profound effects on the economic, social, environmental,

political, and cultural fabric of these later-developing nations.

Laying aside for the moment the social, environmental and

cultural impacts, the political economy of Southeast Asia has

been profoundly effected by its dependence on high-tech led

development and not simply because of their subsidiary role in

20 Jeffrey Henderson, The Globalization of High-Tech Production . . ., p. 64. Note: Number of domestically-owned electronics companies are noted in parentheses. In the 1990s, this trend began to change as the high-tech industry began to turn to sub-contracting to locally-owned assembly plants rather than build newassembly plants owned by U.S. companies. Subcontractors, however, are wholly dependent on the health of foreign contractors – largely U.S.-owned – and thusthe health of the U.S. high-tech industry for their own continuing prosperity.

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bipolar Cold War politics. U.S. Cold War policies helped develop

and nourish the infant domestic semiconductor industry and

facilitate the internationalization of its production into

Southeast Asia, but developing nations also became intimately

involved with the industry in a triumvirate state/capital

relationship. Their integration into a highly-competitive labor

market for U.S. multinational production facilities would also

define and limit their dependent role in a globalizing economy

for the remainder of the century.

Ideology, Federal Policy, and the Internationalization of High-Tech Production

The internationalization of semiconductor and high-tech

production was a result of four intersecting forces: the

industry’s drive to reduce production costs in intensively

competitive semiconductor markets; the Kennedy Administration’s

desire to use foreign investment as a tool of Cold War policy and

to reduce the balance-of-payments deficit; foreign host countries

competition for high-tech industries to lead industrial

development; and, the ad hoc and often unintended effects of

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trade policy formulation.21 The passage of section 806.3

occurred under the general rubric of post-war reconstruction and

restructuring, but given the limited intent to aid one industry

in “emergency situations” its effect on the semiconductor

industry was purely

“accidental.” The semiconductor industry relied on 806.3 to

reimport its goods into the U.S. until the mid-1960s when section

807 became the more popular avenue for re-importation. Kennedy’s

Trade Expansion Act had both structural (balance-of-payments) and

ideological (Cold War) motives behind it. It’s reliance on the

ideologies of the “Open Door” and freer trade to accomplish those

motives had effects beyond the encouraging of foreign investment

that further motivated the semiconductor industry, among others,

to move production overseas. Kennedy’s Open Door approach turned

U.S. foreign economic policy away from the post-war policy of

closer regulation of international trade (fair trade) and set it

on a course in which free trade ideology would become

increasingly dominant. The Southeast Asian nation’s competition 21 In the 1960s, the competition for U.S. semiconductor manufacturers was almost entirely domestic. For Santa Clara companies that established operations during this period, the primary competitors were industry giants Texas Instruments and Motorola.

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for high-tech investment as an engine of development overcame the

final inhibitions toward moving production off-shore and released

the floodgates for multinational corporations in search of low

(and ever lower) wage labor.

The combination of deeply ideological and material forces

and the intervention of government policies changed the shape and

accelerated the pace of globalization after 1962, though trade

would not explode in proportion to the Gross Domestic Product

(GDP) until a decade later.22 As one of the first and most

dynamic U.S. industries to take advantage of these factors, the

semiconductor industry became a leader in the exodus of U.S.

manufacturing industries to foreign shores. The international

dispersal of production from Silicon Valley and other U.S. high-

tech manufacturing regions in the 1970s was both ideologically

and economically consistent with and geographically channeled by

U.S. Cold War policy in the preceding decades. In turn, it

shaped the face of industrial development in Southeast Asia, at

times in ways that strained its ad hoc partnerships with both

home and host countries. One consistent aspect of the

22 See Appendix 1.

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globalization of high-tech industrial production initiated by

Fairchild in 1963 was that, in virtually every step of the

process, the industry relied on both home and host states to

facilitate and smooth the process of locating and relocating

production facilities overseas. While free trade became the

guiding ideology of both federal policy and private interests,

the reliance of industry on national and international government

policy to make “cheap labor cheap” insured that the politics of

international trade would be fraught with internal contradictions

and tensions for the foreseeable future.

This ongoing relationship between the industry, domestic,

and international governments rests uneasily with an industry

that generally embraces a "free trade" ideology. That tension

drove the industry into an increasing political involvement in

the 1970s that would lead to a fundamental shift in the social

and cultural meanings of high technology. For developing

nations that looked to the Silicon Valley development model as a

panacea for their economic ills, disappointment was the primary

result of what became a long-term relationship. High-tech

industries, far from being "perpetual motion" machines that only

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require a kick start to begin producing and distributing their

economic benefits, are labor intensive for both home and host

countries. Not only were host countries consistently forced to

alter and compromise their policies and visions for development,

they were also forced to undertake massive social engineering

programs to reorganize their internal social and cultural

relations to facilitate the change from agricultural to

industrial production. The impact of these programs and from

high-tech industrial work itself has left deep imprints on

Southeast Asian societies and their citizens. It is in the

experience of semiconductor workers that the impact of the

internationalization of production and globalization can be seen

as more than a collection of statistics, business success

stories, economic theories, and disinterested reports. The

development of new technologies may be indicators of human

progress, but the production of that technology is part of a

centuries old story of industrialization and its wrenching and

often brutal effects on industrial workers and their communities.

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Long Division: Electronics, the International Division of Labor, and the Globalization of

High-Tech Dependency

“It is intriguing that an industry that makes electronic parts and machines based on advanced science is itself based upon a type of labor operation reminiscent of early factory operations as described by Adam Smith.”23

Electronic component assembly is grueling work. In an unabashedly celebratory 1983 Esquire article on Fairchild and Intel founder Robert Noyce, Tom Wolfe included this relatively sunny description of an early Fairchild production line:

The work bays, where the transistors were produced looked like slightly sunnier versions of the garment sweatshops of San Francisco’s Chinatown.Here were rows of women hunched over worktables, squinting through microscopes doing the most tedious and frustrating sort of manual labor,cutting layers of silicon apart with diamond cutters, picking up little rectangles of them with tweezers, trying to attach wires to them, dropping them, rummaging around on the floor to find them again, swearing, muttering, climbing back up to the chairs, rubbing their eyes,squinting back through the microscopes, and driving themselves crazy some more.24

Given that Wolfe's intention was to glamorize the Silicon Valley

electronics industry, he did not linger long on the production

aspects of the industry. In fact, this constituted the whole of 23 C.W. Lamden and LeRoy A. Pemberton (project directors), A Study of the Problems of Small Electronics Manufacturing Companies in Southern California (San Diego: San Diego State College Foundation, 1962), p. 151. Note: Given the ideological restrictions of the time, it's not surprising that the labor process describedby "Adam Smith," would have been more accurately attributed to the works of Karl Marx.24 Tom Wolfe, “The Tinkerings of Robert Noyce: How the Sun Rose on Silicon Valley,” Esquire, Dec. 1983, pp. 346--374.

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his attention to the production process. A 1962 Small Business

Management Report was more succinct in its characterization of

electronics assembly, noting that high-tech labor operations were

“. . . reminiscent of early factory operations as described by

Adam Smith.”25 As Wolfe’s passage illustrates, little had

changed in the nature of the labor process by the early 1980s.

Sustained by the low cost of labor and low foreign and domestic

fees on the movement of materials and re-importation of products

assembled in Southeast Asia and Latin America, American high-tech

industries and Silicon Valley companies in particular were slow

to automate their operations. The best corollary to how workers

experience electronics assembly, at home or abroad, would be the

sweatshops of the garment industry, substituting microscopes,

soldering irons, and tweezers for sewing machines.

Most of the founders of the modern electronics industry in

Silicon Valley initially worked for electrical industry companies

like Philco, GE, or Westinghouse in years immediately following

World War II. Given this, it is not surprising they

substantially adopted both mode of production and the gendered 25 C.W. Lamden and LeRoy A. Pemberton, A Study of the Problems of Small Electronics Manufacturing Companies . . ., p. 151.

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division of labor of that industry. Since the early years of the

Twentieth Century, the electrical industry had employed women in

tedious and repetitive assembly jobs. Women's perceived

superiority in manual dexterity was the articulated basis for

their predominance in labor intensive, "light" assembly jobs.

Patricia Cooper provides an example of the 1920s' electrical

industry management's association of women with activities

requiring manual dexterity: "When hiring young women, the company

would always ask the girls especially, 'Do you play the piano, do

you type?... because of the dexterity in the fingers.'"26 This

perception of an innate association of gender traits with job

capabilities was echoed in a Maquiladora electronics plant

manager's statement in the late 1970s: "We hire women because

they are more reliable than men; they have finer fingers, smaller

muscles and unsurpassed manual dexterity. Also, women don't get

26 Cooper, Patricia, "The Faces of Gender: Sex Segregation and Work Relations at Philco, 1928-1938," in Ava Baron, ed., Work Engendered: Toward a New History of American Labor (Ithaca: Cornell University Press, 1991). p. 327; Ruth Milkman, Gender at Work: The Dynamics of Job Segregation by Sex during World War II (Chicago: Universityof Illinois Press, 1987), p. 17. Note: This is also reflected in a 1964 Western Association of Electronic Manufacturers (WEMA) wage and salary survey which notes: "because of the finger dexterity required . . . this [light assembly operative category] has been historically composed of the female sex." In Raymond Sevilla, Employment Practices and Industrial Restructuring: A Case of the Semiconductor Industry in Silicon Valley, 1955-1991 (Ann Arbor: UMI Dissertation Services,1992), p. 159.

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tired of repeating the same operations nine-hundred times a

day."27 The gendering of electronics assembly work persists.

The gendering of "women's work" across a range of production

industries has generated a rich and prolific literature over the

past three decades. Feminist labor historians have proposed that

perceptions about what constitutes traditional "women's work"

(ie. sewing, cooking, cleaning, child-rearing, etc.) have

followed women out of the home and determined their positions in

the division of industrial labor.28 The debate over whether the

gendered division of labor resulted out of patriarchal or

capitalist ideologies (or some combination of the two) remains

unsettled. Feminist scholars substantially abandoned the

unresolved debate as the field turned to an emphasis on women’s

agency and identity in the 1990s. The gendering of women’s

work, however, persists. The institution of this gendered

division of labor on an international scale has been a marked

characteristic of electronics as well as textile, toy, and

shoemaking multinationals. The correlation of the electrical

industry's division of labor in 1950, in which women filled 84% 27 Susan S. Green, "Silicon Valley’s Women Workers," p. 315. 28 For some of the dimensions of this debate, see footnote 33.

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of assembly positions, to Silicon Valley in 1980 - where women

filled 70-85% of assembly positions, to Singapore in 1980 - where

women filled 95% of assembly positions is striking, particularly

when one considers that, in both the immediate post-war U.S. and

1970 Singapore and Malaysia, there were strong cultural

prohibitions against women working outside the home.29 The

gendered division of labor has characterized the high-tech

workplace since its inception, partially as an inheritance from

the electrical industry and partly as a reflection of the

dominant American social values through various stages of its

historical evolution.

At a time when the United States was supposedly becoming a

more enlightened country in terms of gendered relations (1973),

the Wall Street Journal gave this rather romanticized description

of women assemblers in Penang: “Girls in the blue uniform of

Hewlett-Packard Co. stream through one gate in the chain-link

fence that surrounds the factories. Through another go the girls

29 Bureau of Labor Statistics. Manpower Report No. 12: Defense Manpower Requirements in Electronics Production. United States Department of Labor (Washington D.C.: Government Publishing Office, 1952), p. 26; Jeffrey Henderson, The Globalization of High-Tech Production . . ., p. 40; Pang Eng Fong and Linda Lim, The Electronics Industry in Singapore . . ., p 26.

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in the colorful batik print of Intel Corp. Others flock to the

work benches of National Semiconductor Corp., Hitachi Ltd., and

International Telephone and Telegraph Corp. . . .”30 Companies

like Intel, National Semiconductor, and Hewlett-Packard simply

transferred the mode and methods of production they had employed

in U.S. plants to foreign locations, often with little or no

regard for the culture and customs of a particular region. At

Intel's Penang plant, for instance, managers would have their

"girls" searched daily for the possible smuggling of contraband

chips - a particularly onerous action for these young,

predominately Islamic women.31 Semiconductor and electronics

companies would begin to develop sensitivity to cultural issues

after workers and local communities began to resist and protest

such practices in the following decade, but during the first

decade of electronics globalization the industry was focused on

internationalizing their production operations and the shortest

route from point A to B was to duplicate practices used domestic

30 William D. Hartley, "Electronics Firms Rush to Malaysia . . .," p. 36. Note: No corresponding description was given to how they looked when they cameout after eight hours stooped over a microscope, breathing trichlorethylene, flux, and solder fumes.31 Tim Jackson, Inside Intel: Andy Grove and the Rise of the World's Most Powerful Chip Company (New York: Dutton, 1997), p. 255.

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American plants.32 Throughout the 1960s and 1970s, Silicon

Valley and other American high-tech companies not only exported

production but also a gendered division of labor to the

developing nations of Southeast Asia. The social relations of

American-style capitalism would follow the full spectrum of

American industry wherever it established production facilities.

There is an argument among democratic-liberal and Marxian

scholars alike that induction of women into the workplace can

break down restrictive cultural gender barriers and lead to a

greater degree of women's liberation and empowerment at work and

in the home. There is little evidence, however, even if this has

been the case in some regions of the world, that the effect is

universal or inevitable .33 In Malaysia, many of the women who

32 An example of the evolution toward cultural sensitivity can be found in theoperations at Fairchild’s Shiprock plant in New Mexico where plant managers mediated an alarmingly high quit rate and lack of productivity by developing alanguage and instituting policies rooted in Navajo culture. Though that venture had a disastrous ending with armed occupation of the plant (see Chapter 7), these measures temporarily boosted the productivity of plant to the upper 25% of plants in the Fairchild production network. “Industry Invades the Reservation,” Business Week, April 4, 1970, p. 73.33Also see, for instance: Eva E. Abraham-Van Der Mark, "The Impact of Industrialization on Women: A Caribbean Case," in Women, Men and the International Division of Labor . . ., pp. 374-386; Norma Iglesias Prieto, Beautiful Flowers of the Maquiladora: Life Histories of Women Workers in Tijuana (Austin: University of Texas Press, 1985), pp. 98-100; Maria Patricia Fernandez-Kelly, For We Are Sold, I and My People: Women and Industry on Mexico's Frontier (Albany: New York Press, 1983), pp. 151-189. Note: The conclusions on progressive or positive changes in the subordinate status of women at work and at home ranges from extremely

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work in the Free Trade Zone electronics industries were peasants,

still living in their rural farm communities. The gendered

hierarchies of these villages, far from being broken down, were

seemingly reinforced by work in the electronics plants. Managers

and supervisors at these plants were universally male, and often

Islamic - though some were drawn from immigrant Indian, or ethnic

Chinese communities. In the 1970s, some of the Islamic women in

the FTZ plants garnered attention for incidents involving "spirit

possession" - outbreaks of hysteria, usually starting with one or

two women and then spreading across major portions of the shop

floor. While this may have been a conscious or unconscious

strategy of resistance to work speed-ups, or a reaction to the

day-to-day physical and emotional stresses of the job, the optimistic in Abraham-Van Der Mark's piece on Texas Instruments workers in Curacao, to cautiously optimistic in the second two pieces. The analytical gauge of what constitutes "progress" in gender relations comes out of an emphasis on women's agency in the new labor history as viewed through the eyesof American feminism, a culturally loaded standard which has since been challenged by a number of international women scholars in various Subaltern Studies. As I share the cultural bent of American women labor historians towards what constitutes progress in gendered relations, my own analytical bias should be weighed carefully in this discussion. I should also note that I am not as impressed by the range of what constitutes "agency" as American feminist, or for that matter, new labor historians of both genders. Agency (ie. resistance to capitalist or patriarchal authority) has been attributed toacts ranging from increased consumerism to use of forbidden make-up on the job, to small acts of industrial sabotage. Whatever, their nature, I believe, acts of agency should be weighed on whether or not they constitute effective resistance to managerial prerogatives and whether they lead to long-term, effective forms of worker organization.

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reaction of management was to bring in the local mullahs to

exorcise the plants of “evil spirits.” Most often, this would

end the outbreak and restore order to the shop floor - at least

temporarily. In some cases, the outbreaks would reoccur, and the

international managers of the plants would engage in other

disciplinary actions or layoffs. In these cases, or when other

perceived cultural or work-related transgressions against the

women in the plants persisted, local village men would ambush

managers and supervisors on their way out of the plants and beat

them. Though this may have been effective in mitigating shop

floor treatment in the short run, both domestic and industrial

gendered hierarchies were reinforced in the process.34

Another limitation on the "liberating" potential of work for

electronics assemblers is the short prospective career for these

women. Stress on the eyes and backs of assemblers is severe, as 34 Discussion drawn from Aihwa Ong, "Global Industries and Malay Peasants in Peninsular Malaysia," in Women, Men and the International Division of Labor . . ., p. 426-439. Note: Some have argued that the enhanced mobility of women by entering the workplace, is a liberating factor. Though Muslim women are not as heavilyrestricted in their range of activities in Malaysia as they are in Saudi Arabia or Afghanistan, before Malaysia amended its labor laws on night work, if was generally unacceptable for Muslim women to be out at night alone. While this may seem like a socially progressive result emanating from the influence of high-tech manufacturing, one should consider both the stresses itplaced on family relations, as well as the fact that cultural restrictions on the free movement of women were only modified to allow them to go to and from the workplace after sunset.

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is the constant repetitive finger and hand motions. Failing

vision, back strain, and arthritis limit the career of an

assembler in an FTZ enclave to 4-8 years on the average.35 After

working for this period, a woman of twenty or twenty-five is

generally reintegrated into village life, but as a woman

partially disabled and unable to perform many of the day-to-day

tasks of her sisters. This can often lead to social

stigmatization because of her "reduced value" to family and

community. She is then replaced by another 15-20 year old from

the ample supply of reserve rural labor. There was no career

path for women to advance in these plants and no jobs to which

they could transfer their narrow range of specific skills. In

Thailand, where girls or young women were often shipped by

contracts between their families and labor brokers from rural

villages to Bangkok, a disability-based dismissal could leave

them stranded in urban poverty, unable to raise enough money to

return to their villages. In these cases, the most common second

"career" of Thai assemblers was prostitution.36

35 Ibid., p. 430; Jeffrey Henderson, The Globalization of High-Tech Production . . ., p.74.36 P. Phongpaichit, "Bangkok Masseurs, Holding Up the Family Sky," in South-East Asia Chronicle, no. 78, 1981, pp. 15-23. For the problems of contracted labor

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Though labor, feminist, and post-colonial historians have

often focused on the agency of

the subaltern to support the fact that they are not simply

passive "victims" of oppression, ad hoc acts of "agency" by

Southeast Asian electronics workers failed to significantly

mitigate the destructive physical effects of electronics assembly

work or fundamentally alter class and gender hierarchies of power

in the workplace. The fact is that whenever and wherever –

domestically or internationally - workers have acted to develop a

collective voice in the U.S. electronics industry, management has

met them with lay-offs, firings, or disciplinary actions that

have effectively quashed resistance to managerial prerogative.37

In the case of the industry's gendered division of labor,

management has viewed women as generally less inclined than men

to resist managerial authority. Though women have shown courage

and initiative in resisting the more egregious exploitation of

their labor, they have done so within social structures and

cultural restrictions that also mediate their power. Racial and see: David Hayes, “One-way Ticket to Misery,” in Far Eastern Economic Review, October 3, 1980, pp. 34-36.37 Some semiconductor companies have accepted unions in Southeast Asia, but these are generally company unions that are less than vigorous in defending workers rights and/or contesting company abuses. See discussion below.

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ethnic hierarchies, the inexperience of youth, and the

subjugation of rural to urban authority have all placed limits on

the effectiveness of women to develop a significant degree of

power in industrial relations. In this way, the advancement of

women has been circumscribed by local customs and cultures in

their struggles for expanded protections and rights in the

workplace. Campaigns for workers’ rights have been ineffective

and restricted by multiple structures of economic, social,

cultural, and political subjugation of which gender is only one

arena of unequal power relations in a larger constellation.

Women, no less than the male workers, have engaged in prolific

acts of agency in the workplace in attempts to improve their

conditions, but outcomes of those acts have been consistently

offset by the substantially more powerful agency of male industry

managers and political elites in host countries.

The suppression of militant labor movements in Southeast

Asia in the period from 1960-1980 opened the door to exploitive

labor practices by the electronics industry by eliminating

effective, organized forms of worker resistance. In both

Singapore and Malaysia, aggressive left-leaning unions were

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growing in strength in the early 1960s. In both countries, the

government passed labor laws that effectively destroyed or

marginalized the power of these unions.38 In Singapore, The

People's Action Party (PAP), the dominant political party, passed

libel laws which made any direct criticism of government

officials a civil and criminal infraction, thus limiting the

ability of unions to challenge government labor laws or

effectively run or support opposition candidates in elections.39

In an address to the National Trade Unions Congress (NUTC) in

1980, Singapore President Lee Kuan Yew clearly articulated his

level of tolerance for opposition from unions:

The crucial question is how to ensure that the PAP-NUTC symbiotic relationship will endure between younger leaders in PAP and NUTC. Put simply, who will educate the younger generation of union leaders to recognize their strengths and their limits: namely that if the union challenges the political leadership, political leaders must triumph, if necessary, by changing the ground rules to thwart the challenge, using legislative and administrative powers and, when necessary, backed by themandate of the electorate. If this axiom is put to the test, severe damage will result; but given strong political leaders the outcome cannot be in doubt.40

The response from NUTC leader, Devan Nair, to this less than subtle threat regarding mobilizing the political power of unions,

38 Nena Vreeland, et al., Area Handbook for Malaysia, 3rd Edition, Department of the Army (Washington D.C.: Government Printing Office, 1977), pp. 40 & 384. 39 Susumu Awanohara, "Opposing the PAP machine," in Far Eastern Economic Review, October 3, 1980, p. 24.40 "Yes SIR - or one way of avoiding a bloody nose," in Far Eastern Economic Review,August 1, 1980, p. 47.

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was somewhere between sardonic and laconic: "Lee is not a man who, because he is invited to dinner, would say nice things to his host."41

In Malaysia, militant left unions were a casualty of emergency military rule established in the wake of ethnic riotingin 1969, and were legally restricted again when the remnants tried to break with the dominant, conservative Malaysian Trade Union Confederation in 1980. In both nations, because of the suppression of the labor left, dominant unions act more in collaboration with the state and with multinational industries than as aggressive representatives of workers.42 Surviving Southeast Asian trade unions have generally operated in the mold of a "loyal opposition" both in politics and the workplace since the 1970s and early 1980s.

Though some improvement in working conditions can be observed in high-tech enclaves in Malaysia and Singapore, the reliance of the electronics industry on young women for its international labor force has been replicated in every country

41 Ibid., p. 46.42 K. Das, "Unionized but not unified," in Far Eastern Economic Review, October 3, 1980, pp. 24-25; T.H. Elliott, "Multinationals in Developing Countries" . . ., p. 49. Note: An example of the ideological limits internalized by Singapore's unions can be found in Elliot's statement conceding that pay in developing countries should be linked to their lower standard of living: "The only result of such an unrealistic approach [bringingwages up to industrialized nation's standards] would be to upset local wage relativities in developing countries and to distort their economies." However practical this statement may be, the entire tone of the article reflects a cautious, respectful approach to multinationals in general. It should also be noted that unions have a stronger presence in Japanese and European-owned multinationals than in U.S. multinationals who have vigorously resisted establishing even company unions.

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into which the industry has moved. Low wages and long hours of backbreaking work for these women has followed. The most recent source of "cheap, abundant labor" for the industry has been in China, where the Chinese Communist government has offered industries even more benefits than the nations of Southeast Asia.Once again, the suppression of workers' organizing efforts has played a major part in ensuring a relatively compliant, low-wage labor supply for American multinationals. In a recent conversation with a visiting Chinese scholar from the PRC, I was informed that one can be jailed for saying the words "union," "class," or "Marx" in the workplace, or in communities that host international manufacturing facilities.43

There has been little official protest from the U.S. government to any of these practices, either to multinational high-tech industries or to host countries. The Comptroller Report of 1978 provides a partial explanation: "The various interests among the developed and developing nations, and betweenthe two, makes any meaningful agreement [on international regulation] very doubtful. As a result, there will be increasingdemands for national regulation to fill the gap."44 Stricter national regulation of occupational health and safety or environmental standards is equally as unlikely, given the vigorous competition between developing nations for U.S. manufacturing operations. In this case, the U.S. government has

43 Conversation with W., June 18, 2001, Name withheld to protect the source, currently still active in the Chinese women's movement.44 GAO, U.S. Foreign Relations and Multinational Corporations . . ., p. 60.

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been a conspicuously "silent partner" of U.S. multinational operations in developing nations, subjugating criticism because of overriding policy initiatives supporting national security andU.S. multinational interests in the globalization process. As a result, national security, international relations between the U.S. and host countries, and the consistent demands of multinationals upon host countries for relaxing labor and environmental regulations in the highly competitive market for high-tech production facilities have added yet another layer of legal and procedural restrictions on workers' abilities to shape labor relations.

The costs of dependent development, in all cases, were bornemost heavily by young, Asian women. The narrow skills required for an assembly worker were not easily transferable to other industrial occupations limiting both upward and lateral job mobility. Many of these women were so physically debilitated by failing vision, arthritis, carpal tunnel syndrome, and back problems that by age 25 their industrial careers were functionally curtailed. The boom-and-bust nature of electronics production for the two decades following its near exclusive dependence on government defense contracts also provided, at best, an unstable wage economy for these women. The industrial base for host countries hoping to develop their own indigenous electronics sectors has instead been tied inextricably tied to the economies of the western industrial core nations as

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technology transfers to host countries waned in the 1970s.45 The minimum or sub-subsistence wages Southeast Asian women received for their labor prevented them from accumulating the minimum amount of wealth necessary to escape poverty and gain a degree ofeconomic or social independence. Rural village cultures were disrupted or destroyed in the process, but hierarchies of gendered relations remained in place. The building of dams, roads, and whole cities rearranged the face of the land. The implications of these changes for both local populations and the environment have received inadequate attention and are still poorly understood. In many cases - particularly in Thailand, where high-tech development in urban centers drew thousands of young women away from their rural villages - these women simply exchanged rural for urban poverty. Young women moved from subjugated positions in rural gendered hierarchies to subjugationwithin a hierarchical, gendered division of labor, followed in many cases by life prostitution.46

The division of labor employed by the industry also tended to reinforce ethnic and religious hierarchies as well. In Singapore, the employment of local ethnic Chinese as supervisors and guest Malaysians as workers extended the dominance of ethnic Chinese established under the British. In Malaysia, with the

45 Pang Eng Fong and Linda Lim, The Electronics Industry in Singapore . . ., pp. 21-26. Note: The post-Vietnam recession of 1975 led to Singapore firms laying off between 40-50% of their workers. Employment levels did not recover for over two years. Through 1985, semiconductor industries experienced recessions on the average of every three years with commensurate labor force reductions on aworldwide basis.46 "One-way ticket to misery," pp. 34-36.

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coup of 1969, traditional hierarchies were often reversed with indigenous Malaysians managing ethnic Indian and Chinese minorities, but sometimes upheld, with former Indian and Chinese plantation managers supervising ethnic Malaysians. In either case, labor remained divided along ethnic and gendered lines, with all subject to male, western management at the top levels. The cultural and religious customs of workers were consistently violated or overridden by the imperatives of production, or sometimes co-opted into managerial strategies, as in the case of Malay spirit possession beliefs.47 The incorporation of these nations into a de facto "U.S. commonwealth," also facilitated thefreer movement of people and commodities across national borders,thus facilitating the "the effective world-wide use of the world's productive resources of men and materials," but also leading to dramatic displacements of people from their communities.48 In the United States, the impacts of this mobilityof labor would be facilitated by immigration reform, resulting inan influx of men and women from Southeast Asia into the Silicon Valley, a migratory movement that would replicate the ethnic divisions of labor pioneered in the core manufacturing complex ofSilicon Valley. What had been exported from U.S. borders - alongwith electronic components for assembly - as a gendered division of labor would be re-imported - along with assembled integrated circuits - as an ethnic division of labor.

47 Aihwa Ong, "Global Industries and Malay Peasants . . .," p. 429-434.48 William Domhoff, p. 130.

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Conclusion: Ideology, Labor, and Policy

If in the host countries of its production facilities, high-

tech and other American multinational corporations relied on the

repressive arm of the state to keep workers under company

control. Achieving a similar level of control in the United

States required a different and more complicated combination of

both industrial relations strategies and political initiatives.

In the U.S. semiconductor industry, for instance, remaining non-

unionized was considered essential to retain maximum managerial

prerogative. Silicon Valley companies, as well as the vast

majority of national independent semiconductor operations have

achieved an almost perfect record in this regard. In 1988, only

2.7% of all electronics production workers operated under union

contracts. Compared to the steel and auto industries, where over

50% of the workers were unionized, and telecommunications and

transportation industries, in which over 40% of workers are

represented by unions, this is a remarkable departure from the

norm of postwar labor relations in major industries.49 Virtually

49 Michael A. Curme, Barry T. Hirsch, and David A. MacPherson, "Union Membership and Contract Coverage in the U.S., 1983-1988," Industrial and Labor Relations Review, Vol. 44, No. 1, October 1990.

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all of the small percentage of workers who are unionized work in

“captive shops” – the semiconductor operations of unionized

companies such as AT&T, General Electrical, Lockheed, and other

large and long-established corporations. Silicon Valley

semiconductor companies have used a combination of “carrot-and-

stick” policies to remain non-union, rewarding workers with a

modest package of wage and benefit perquisites on one hand, and

aggressively opposing union drives on the other – often firing

pro-union activists within the company. This dynamic will be

discussed in conjunction with the discussion on union drives in

the Valley in Chapter Seven.

Though semiconductor companies have been successful in

keeping unions off the shopfloor, this has not been the only

arena in which the industry has had to contest the power and

influence of unions. Beginning in the late 1960s, the AFL-CIO

and other independent unions jousted consistently with the high-

tech industry and other free trade advocates over U.S. trade

policy. John Kennedy’s Trade Expansion Act was the last piece of

major trade legislation that would receive the unqualified

support of organized labor. Beginning in 1968, the AFL-CIO would

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move from an enthusiastic supporter of free trade and the Open

Door, to a bitter opponent of further trade liberalization in the

1970s as trade policies favoring multinational corporations and

leading to increased imports began to have visible and

substantial impact on employment and union membership across a

spectrum of U.S. industries. Sections 806.3 and 807 of the TSUS

were at the core of labor’s alarm over the growing impact of

globalization. Parrying the attempts to amend or repeal these

provisions was the semiconductor industry’s chief concern in the

battles over trade legislation in the late 1960s and 1970s. The

adversarial positions of labor and the semiconductor industry

brought them into direct conflict over trade during the peak

years of the Vietnam War. The confrontation over trade policy

were fought for stakes that would far outlast the bloody conflict

in Southeast Asia; its outcome would decide the fate and ultimate

shape of globalization into the 21st Century.

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