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.
I'm a retired engineer.
At DEC I was a Principal Engineer responsible for designing a transaction based (mostly queued, out-of order, command) on their XMI Bus. The parent project was 'High-End' 3-D graphics workstation named 'Lynx'.
I was at least partially responsible for the Lynx project's demise. I questioned whether the low level metrics like triangle draw rate justified the product being a 'real time', photo realistic' machine.
I pointed out that drawing any photo realistic image would be so slow that it could never be considered real time.
Actually, I agree with chipmonk's ideas, including the "desperate helplessness" of sticking with a manufacturing model that no longer works, in Japan. (Or in the West, for that matter, so why should anyone over here be surprised?)
As to the "says who" aspect, it's not so much about any one person being "in control." It's more like, if a Japanese company wants to compete with China, Taiwan, and South Korea, on their terms, this is what they have to do.
Pretty obvious, actually. We've had many discussions already about what it would take to get manufacturing back to the US. Automation is certainly one key ingredient.
In that sense most of us are, or have been 'free agents'.
What I'm saying is that none of us are really free. We need to be relevant and marketable and that relevance and marketability are dictated from without.
Do you think China, S Korea and others are immune from crisis? Certainly much of Europe, including Germany, is feeling a stagnation in world trade.
From a world perspective, Japan becoming very competitive is a problem. It would heat up the competition for markets.
As Chip says elsewhere automation puts workers out of work but says says selling of products produced at higher efficiency would '... at least ... be more money from exports to retrain them in something else'.
The problem is world trade is stagnating and even shrinking.
As far as who's in control, it's not a question of individuals. Even governments and central banks have been powerless to solve the problem. They're reduced to inflating bubbles.
Of course, but since we don't identify ourselves solely as an employee of this one company, it becomes OUR responsibility to keep ourselves relevant and marketable. And to make ourselves known to the community in which we operate.
In short, it becomes the individual engineer's job NOT to become identified as a drone working for just one company. You don't expect to be spoonfed, and you keep yourself educated and up to date.
As I've already opined on here before, China and South Korea will go through the same evolution as the rest of us. As the standard of living goes up, so do the wages. And then down goes the competitiveness for low-cost manufacturing. China is already exploring building plants in Cambodia and Vietnam. As reported by EE Times.
This is a continuation of the Industrial Revolution. Labor moved from the fields to the factories. Then from building hardware to building software. Then from selling physical stuff to selling IP.
No one is immune. Companies and entire countries have to keep reinventing themselves.
I look at global manufacturing, including labor (I consider engineers laborers) and their education, supply lines, raw materials, national boundaries, the economics and attendant politics as a big, sometimes loosely, sometimes tightly, coupled elements, etc as a big machine, a system.
Many believe that machine is stuttering, maybe there are bottlenecks, wrong balance of serial vs parallel, too tight coupling or too loose, not enough duplication of resources, maybe too much, misallocation, stalling of pipelines etc.
We should look at this as a system.
Join our online Radio Show on Friday 11th July starting at 2:00pm Eastern, when EETimes editor of all things fun and interesting, Max Maxfield, and embedded systems expert, Jack Ganssle, will debate as to just what is, and is not, and embedded system.