The Rise & Fall of the Japanese Semiconductor Industry, 1970 †2000 Ess

The Rise & Fall of the Japanese Semiconductor Industry, 1970 – 2000 Summary: The semiconductor was the created with the innovation of transistor by Bell Corporation. The industry was driven by the of great US electronic giants such as general Electronic, Texas Instruments and others. These US giants conquered most of the world market sharers. However in the ever-changing world economy the market always moves here to there. Nothing was different in the case of semiconductor industry. With the span of time US gradually lost control of the semiconductor market shares and Japan captured the industry. Nevertheless, it was only a matter of period to misplace the market share of semiconductor business by Japan. The time frame of semiconductor business started immediately after WWII and running even now. In a way the changes took place and how the shape of distribution of market has been changed was grounded by all time great market and economic mechanisms. Some argues those government policies and economic mechanisms in an optimistic viewpoint some obviously in sees in pessimistic view. However, this is known to all that the policies that have been part of the cause have made those countries the world’s leader in electronic production as well as the economic super power of the planet. Although US is the originator and architect of the semiconductor technology, especially was outstanding in DRAM (Digital random Access Memory) assembly, US actually struggled to stay in the competition in long run because of the excellent Japanese policy about the foreign direct investment in Japan. Many may argue with various benefits of green field investment that it is good for the host country but Japan never encouraged Greenfield investment by US or by any other countries especially in semiconductor industry. Forget about the encouragement, Japan had a great barrier and restrictions on this semiconductor industry. The policy of Japanese government, Ministry of International Trade and Industry (MITI), deliberately made US firms to go for joint adventure with the Japanese companies. Initially US firms were making profit but with the help of Japanese government policy Japanese firms took over 80% of global market share of chip making business especially semiconductor industry where US was the innovator of the DRAM. Afterward tremendous... ...gained DRAM market share in Japan. Even in 1988 Samsung never produced DRAM but in 1994 got more than 12 percent of market share lot ahead of Japanese giants like Mitsubishi or NEC. The investment on plants of digital chip making was lot higher by the Korean and Taiwanese company compared than Japanese or US. South Korean firms invested 55 percent of the revenue from the semiconductor revenue whereas Japanese did only 15 percent. The aggressive move from South Korea and Taiwan made them able to grasp the market share of Japan. Still now from 1991 Japan is losing its market share in semiconductor business. Also, The U.S. comeback in chips was due primarily to rapid growth in the market for microprocessors, the chips that act as the "brains" of personal computers. That market is dominated by Intel & Motorola. Intel's semiconductor sales increased from $1 billion in 1986 to about $4 billion in 1991, a gain that by itself is responsible for the U.S. share of the world market being about 5% higher than it otherwise would be. The Japanese attempt to develop its own microprocessor design standard – â€Å"TRON† failed in large part because there was no software to support it.