Case | HBS Case Collection | October 2009

Low-k Dielectrics at IBM

by Willy C. Shih and Giovanni Carraro

Abstract

Innovations at the frontiers of technology carry enormous risk of making wrong choices. This case examines a decision made by IBM in its semiconductor process technology strategy: a material to use as a dielectric insulator in its leading edge silicon chip technology. While at the time of the decision it looked like a good choice, subsequent issues with material properties caused the company to have to switch to an alternative. Though a major disruption, the company was able to recover relatively quickly. The case probes the organizational capabilities and problem solving approaches that enabled that recovery. Missteps when making huge bets at the forefront of scientific innovation are increasingly costly, and the company in effect purchases real options for its R&D strategy by allowing a measured level of concurrent investment in competing alternatives.

Keywords: Competency and Skills; Decision Choices and Conditions; Technological Innovation; Product Development; Science; Creativity; Semiconductor Industry; United States;

Citation:

Shih, Willy C., and Giovanni Carraro. "Low-k Dielectrics at IBM." Harvard Business School Case 610-023, October 2009.