This paper is based on research conducted for our forthcoming book, Change Is the Only Constant: How the Chip Industry Deals with Crisis. Clair Brown is professor of economics and director of the Center for Work, Technology, and Society (IRLE) at University of California, Berkeley; Greg Linden is senior research fellow at the Center for Work, Technology, and Society at UC Berkeley. Yongwook Paik provided excellent research assistance. The authors would like to thank the Alfred P. Sloan Foundation, the Institute for Research on Labor and Employment at UC Berkeley, and the Institute for Technology, Enterprise and Competitiveness (ITEC/COE) and Omron Fellowship at Doshisha University, Japan, for funding. We are grateful to Ben Campbell, Bob Doering, David Ferrell, Michael Flynn, Gartner Dataquest, Ron Hira, Dave Hodges, Rob Leachman, Daya Nadamuni, Elena Obukhova, Devadas Pillai, Semiconductor Industry Association, Chintay Shih, Gary Smith, Bill Spencer, Strategic Marketing Associates, Yea-Huey Su, Tim Tredwell, and C-K Wang for their valuable contributions. Melissa Appleyard, Hank Chesbrough, Jason Dedrick, Rafiq Dossani, Richard Freeman, Deepak Gupta, Bradford Jensen, Ken Kraemer, Frank Levy, B. Lindsay Lowell, Jeff Macher, Dave Mowery, Tom Murtha, Tim Sturgeon, Michael Teitelbaum, and Eiichi Yamaguchi, as well as participants at the NAE Workshop on the Offshoring of Engineering, the 2005 Brookings Trade Forum on Offshoring of White-Collar Work, the Berkeley Innovation Seminar, and the Doshisha ITEC seminar series provided thoughtful discussions that improved the paper. We are especially grateful to Gail Pesyna at the Sloan Foundation for her long-running support of, and input into, our research. The authors are responsible for any errors.