Japanese engineers from competing electronics companies gather in one room to exchange punches, parries, and predictions for Japan's electronics industry.
HAKONE, Japan – As Japan’s ailing electronics manufacturers continue to lay off engineers by the thousands, the next move here is a focus of intense speculation around the global electronics industry.
Pontificating doom and gloom for Japan from afar is easy. Harder is to gather together a number of Japanese engineers -- all working at competing electronics companies -- in one room and actually ask them straight questions. What do they think has gone wrong, and what do they believe will be the fate of their employers, their jobs and the whole shootin’ match?
It took a Chinese-American CEO running a design service company in Shanghai to pull that off.
Wayne Dai, CEO of VeriSilicon, invited this past weekend (April 20) a dozen Japanese engineers who hold positions (or previously held positions) at rival companies such as Sony, Renesas, NEC, Hitachi, Panasonic, Fujitsu and MegaChips for a weekend retreat in Hakone -- roughly a two-hour train/cab ride from Tokyo. Also invited were VeriSilicon board members including Clark Jernigan, a venture partner at Austin Ventures, and Marco Landi, former chief operating officer at Apple Inc.
For Dai, once a professor of computer engineering at the University of California at Santa Cruz, the mission of his “Japanese Semiconductor Executive Forum” in Hakone was plain and simple. He wanted to probe the future of Japan’s electronics industry through the eyes of “open-minded Japanese engineers,” as he put it. He encouraged everyone who attended to think and speak freely as individuals, not as corporate spokesmen. Dai sought from his guests, before concluding the retreat, a consensus on five “specific” predictions -- what will happen to Japan’s electronics industry -- in precise language.
That he and his group did.
I was invited as a speaker and a participant -- on one condition. Although I’m allowed to report on the Forum, I agreed not to attribute quotes to any participant by name. Seeing a rare opportunity for a reporter to be a fly in the wall, this stipulation was a no-brainer. But I did exchange business cards with every participant, so I can be sure whom I’m not quoting.
Not everyone originally invited was able to make it to the event, however. An engineer at Fujitsu Semiconductor had to be elsewhere, to discuss his early retirement package with his employer. [Fujitsu has decided to shed 2,000 employees before spinning off its SoC business into a joint fabless design company with Panasonic.] An engineer at Panasonic also begged off, citing personal reasons.
Everyone who came had already given a lot of thought to what’s gone wrong with Japan’s electronics industry.
A Sony engineer observed that the decline of Japan’s SoC business comes down to one thing. “The whole SoC business model has changed to ‘turnkey solutions.’” Japanese semiconductor companies, without a turnkey solution, have no choice but to provide semi-custom SoCs to high-end CE manufacturers whose market share is shrinking. “We’ve been squeezed,” he said.