Collaborative Innovation Strategy of Supply Chain in the Context of MCU Domestic Substitution : A Differential Game Analysis

The domestic substitution of the IC (the Integrated Circuit) industry improves economic efficiency and is significant in ensuring national security, which has gradually become an essential strategy for countries worldwide. Based on the background of domestic substitution of integrated circuits, we select a typical component Micro Controller Unit) as the research object, construct a three-level supply chain game model under different scenarios in a dynamic architecture, and analyze the game problem of collaborative innovation of the MCU supply chain. We fully consider the impact of factors such as time, cost and the innovation and collaborative innovation efforts of various supply chain members on the level of domestic substitution. Moreover, we put forward a two-part pricing + cost-sharing contract to achieve supply chain coordination. We found that: (1) Collaborative innovation of the supply chain in the centralized decision-making scenario achieves the highest level, followed by the cost-sharing scenario; (2) The two-part pricing + cost-sharing contract can help achieve supply chain coordination; (3) The trend of the MCU domestic substitution level with manufacturing cost is U-shaped, which means the increase of manufacturing cost may have a positive impact on the process of domestic substitution.