Japan's electronics giants spent much of 2002 disaggregating their silicon empires, which led to some dramatic changes last year.
According to the Semiconductor Industry Association, Japan became the fastest-growing chip market in 2003. In its yearly forecasts, the trade group projected Japan's market to increase 17.9 percent to $44.9 billion in 2004, 4.6 percent to $46.8 billion in 2005 and 4.4 percent in 2006 to reach $48.9 billion.
The Japanese companies have started making waves on the technology front as well. Toshiba engineers, for instance, have fabricated CMOSFETs with 40-nanometer gates on a strained-silicon wafer on a SiGe base using a 65-nm, Ni-salicide process. In another development, Hitachi has demonstrated prototypes of a hydrocarbon thin-film battery cell and portable cartridge that it hopes will help replace current battery cells.
A massive round of consolidation has helped Japan reemerge from a decade-long recession. Now Japan's semiconductor revival is seeming to bring new dynamism to Asia's nascent design industry.
While moving away from the vertically integrated model, Japanese chip giants will want to pass on a significant number of design projects to smaller companies. Here, Asian markets can benefit from their cultural and geographical proximity as well from their increasing design clout.
In mainland China and Taiwan, as momentum gathers in the digital consumer sector, Japan's footprint will get bigger because of its prowess in this area. And that means more opportunities will open up for design houses in China and Taiwan.
Likewise, in South Korea, Samsung is joining hands with the likes of Sony and Toshiba to complement design skills in different sectors.
Japanese companies, however, won't be looking only to the emerging Asian heavyweights like China, Taiwan and Korea. Smaller design companies in Malaysia, the Philippines and Singapore would also benefit from Japan's design-lite strategy.
Eazix, a Philippine-based ODM, has been providing firmware for embedded processor applications to Japanese companies. Sharp, for instance, provides the component level as well as the reference design, and Eazix integrates the hardware side of it, while developing the necessary software to make it run or interface.
While U.S. and European IDMs are starting to open design shops in Asia to enhance manufacturing quality and efficiency of operations, the talk has mostly been about the great "offshore scare." But within Asia itself, Japan's migration from vertical integration points to a much bigger change in the region's design landscape. The year 2004 may bring a greater visibility to this shift.
-Majeed Ahmad is editor of EE Times Asia.