We examine the relationship between application-specific integrated circuit (ASIC) firms' technology portfolios and their innovative performance. This relationship is complex, and we hypothesize that it changes according to the stage of ASIC technology evolution. We test our hypotheses using a longitudinal dataset of 67 firms from the ASIC industry over the period 1986-2003. We find that ASIC technology evolution negatively moderates the effects of the size and diversity of the internal

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... gy portfolio on ASIC firms' innovative performance. This implies that, in earlier phases of ASIC technology evolution, successful ASIC firms developed large and diverse portfolios to cope with technological uncertainty. During later phases of ASIC technology evolution, they tend to have relatively smaller and less diverse portfolios, and they focus on unique, protectable, and exploitable advantages.