Consumers have long benefited from the profusion of ever more powerful and less expensive silicon semiconductors, the building blocks of all electronic devices. For the chip manufacturers, though, the story is less rosy. While the market price of their products has steadily fallen, the cost of building a new fabrication facility to produce increasingly complex chips has soared—to $2 billion or more. Capital productivity has plummeted as a result (Exhibit 1). And now, an industry already reeling from the general slowdown in high technology faces an even greater strategic challenge from emerging technologies.

Plastic transistors, also called organic thin-film transistors (OTFTs), may be that rarity: a truly disruptive technology in a mature, $226 billion industry. Semiconductor manufacturing at present involves hundreds of steps performed with incredible precision in a near vacuum. Foundries are usually huge and highly efficient, but the process that takes place in them still generates heavy metals and toxic gases and consumes billions of gallons of water. Moreover, it takes days to produce a single, albeit large, batch of conventional semiconductors. OTFTs, by contrast, can be produced in minutes using sophisticated ink-jet or rubber-stamp printing technology. They can be made singly, and with projected costs of...