The
History of the Japanese Semiconductor Industry:
Since the invention of very first semiconductor, the semiconductor industry has changed
dynamically. An industry which only had few players in its early stage is today
a global industry with a huge number of companies manufacturing semiconductors.
Some of them like Intel are old players while some of them are new entrants. Semiconductor Companies from USA, Japan, South Korea, and Europe were the pioneers of what we
today know as the semiconductor industry. Among all these countries the journey of
Japan’s semiconductor industry has been the most dramatic one.
Japan’s rise
to prominence in the semiconductor industry was widely chronicled and analysed
in the 1980s. A consensus emerged around a few key factors. Perhaps foremost
among these was government backing. In the 1960s, dominant government agencies
demanded tough terms, including technology transfers, from foreign companies
such as IBM and Texas Instruments that wanted access to the growing Japanese market.
In 1970’s Japan’s Government pursued a more active and liberal policy for the
foreign companies allowing co-operation with foreign counterparts.
Collaboration in field of research and technology sharing led to growth of
Japan’s semiconductor industry. The main product behind this rally of growth in
Japanese industry was DRAM, a memory chip used in computer hardware in which
Japanese companies were dominating the market globally. Hitachi, Mitsubishi,
Fujitsu, Toshiba were showing unanticipated growth rates and they were rapidly
becoming the market leader in this technology. These companies were directly
competing with American companies like IBM and Intel. The Japanese government
invested more than 70 billion yen in the semiconductor industry to compete in
the market and for research and development.
The Rise
& Fall of Japanese Semiconductor Industry:
In early
1980’s Japanese companies implemented the strategy of low price to rapidly
occupy the market. The strategy worked and japan soared to the top place in the semiconductor industry. By 1989 the global share of Japanese companies in the
market was 52%, while the share of USA was only 37%. Among the top 10
companies, 6 of them were Japanese companies. This was a huge milestone for the
japan but this also resulted in their downfall. This unprecedented success story
blindsided Japanese companies as they took their competitor taken for granted.
In the early 1990’s because of the technological revolution the demand for DRAM
which was the key product in the success story of Japan fell. The low-cost
price strategy affected Japan as Korea, Taiwan mastered the technology of DRAM
and as they manufactured the new generation of DRAM, Japanese companies
suffered losses.
After
suffering the losses from 1990’s, Japanese semiconductor companies started to heal themselves
and to limit the loss. The government also intervened in stabilizing the industry.
New technologies were introduced, and several new projects were initiated to
inject the Japanese companies with a boost. The certain sector showed growth while
some were able to manage their position after the sudden downfall. Even after
facing such a downfall, Japanese enterprises occupy 50% or more shares in 14
important materials, such as silicon wafer, synthetic semiconductor wafer,
mask, photoresist, pharmaceutical industry, target material, protective coating
film, lead frame, ceramic plate, plastic plate, tab, COF, welding wire,
packaging material, etc. the Japanese semiconductor material industry has
maintained an absolute advantage in the world for a long time. Still, they must
learn from their past mistakes and should be prepared for any kind of advancements
or changes in this ever-changing market.
