Japanese engineers from competing electronics companies gather in one room to exchange punches, parries, and predictions for Japan's electronics industry.
Takashi Yunogami, a director of the Fine Processing Institute who was also invited to the Forum as a speaker, said that the culprit is clear. “The pursuit of excessive quality with excessive technology killed Japan.” Yunogami’s pet peeve is that Japan’s DRAM manufacturers who miraculously met mainframe computer companies’ stringent request to deliver DRAM with a 25-year guarantee remained oblivious to profound changes happening in the market place -- a shift to PCs from mainframe computers -- and kept supplying the same 25-year guaranteed DRAMs to PC companies. In contrast, Samsung came up with a lower-cost DRAM with a three-year guarantee “good enough” for PCs. That allowed the Korean giant to eat Japan’s lunch, Yunogami explained.
An executive from MegaChips, a fabless company based in Osaka, said that the Japanese semiconductor industry has been ailing because they have been too focused on chips they design and chips they make. Their failure to look beyond semiconductors is the biggest problem. The survival of the Japanese electronics industry is dependent on whether “we can offer vertically integrated services, which includes everything from algorithms, LSIs and applications,” he noted.
MegaChips has vowed to subscribe to MediaTek’s playbook -- keeping an eye on a fast-changing market with a relentless focus on the development of turnkey solutions. However, he added, “Our customers won’t be typical CE companies. Rather, we hope to go after companies who build housing and facilities/equipment inside the home, for example.” MegaChips hopes to work with customers who neither know anything about semiconductors nor understand the business-changing potential of chips. “Our plan is to offer them integrated turnkey solutions -- everything from chips to apps -- that they can embrace and run with.”
Forum members also discussed pros and cons of the rampant merger trend among Japan’s electronics companies -- often engineered by bureaucrats at Japan’s Ministry of Economy, Trade and Industry (METI) -- as Japan’s industry policy.
Speaking of a new SoC company as a result of the merger of Fujitsu’s Semiconductor group and Panasonic’s SoC team, a Renesas engineer said that he sees neither synergy between the two nor the prospect of the merged company to grow. “There is no imperative to put the two together,” he said.
Many participants at the Forum predicted that the new Fujitsu/Panasonic SoC comapny won’t succeed, speculating that the only purpose of the JV is for Fujitsu to get funding from the state-backed Development Bank of Japan.
None of Japan’s merged ventures -- starting from Elpida to Renesas Technology and Renesas Electronics -- have been successful, partly due to the human factor, said Yunogami. No Japanese engineer is eager to work at a JV, he said.
Yunogami cited his own experience at Elpida, where he later discovered he was the only engineer who volunteered to move to Elpida. Everyone else had begged to stay at his respective parent company. Being transferred to a JV is a traumatic experience for Japanese employees because it amounts to a loss of personal identity, which is closely linked to the original company for which they vowed to work lifetime.
Japanese engineers, however, will soon find out that they have no choice but to shed this mindset and embrace a new -- adapt or be unemployed -- reality.
The Renesas engineer at the Forum noted, for example that he’s thinking about negotiating a spin-off business based on the IPs he and his team worked on at Renesas.
VeriSilicon CEO Dai asked him, “Are you willing to become a CEO and run that startup?” Well shy of uttering a resounding affirmation of his incipient entrepreneurism, the Japanese engineer said, “Well, I’ve started thinking about that.”
While heated debates enthused on various topics during the Forum and even after that, the following are five-point “predictions” the Japanese Semiconductor Executive Forum made before the meeting adjourned.