Sluggish demand for computers and microprocessors caused Japan's foreign semiconductor market share to slip slightly in the third quarter of 1997, according to new figures released Tuesday in Washington, D.C. by the United States government.
Non-Japanese chip makers captured 32.1 percent of the semiconductor sales in Japan compared with a record high 35.8 percent in the second quarter last year, said the U.S. Trade Representative and the Department of Commerce. The third quarter share was the third-highest quarterly level since Japan and the U.S. first entered into a semiconductor trade agreement. When the original pact was signed in 1986, foreign semiconductor market share in Japan was 8.4 percent, according to U.S. industry officials.
"Despite the third quarter downturn, the competitive position of U.S. companies continues to improve in Japan," said George Scalise, president of the U.S.-based Semiconductor Industries Association (SIA). "Due to the strength of the U.S.-Japan trade agreements on semiconductors, U.S. and other foreign manufacturers have made tremendous strides in gaining access to Japan's market during the past decade."
San Jose, Calif.-based SIA blamed the decline on softness in Japan's computer and microprocessor sales during the third quarter. U.S. companies -- led by Intel -- dominate the Japanese microprocessor market. However, market weakness caused a decline in processor sales to $619 million in the third quarter from $846 million in the prior three-month period, the SIA said.
According to the U.S. trade group, microprocessor sales accounted for 10.2 percent of Japan's total semiconductor market in the second quarter, while MPUs slipped to 7.3 percent in the third quarter. The SIA said it estimates U.S. companies supply more than 85 percent of the world's microprocessors.
The SIA, however, said it expects to see improvements in the future. "Because of the proven competitiveness of U.S. companies, we fully expect sales of U.S. chips to increase in Japan," Scalise said. "At the same time, as market conditions fluctuate, it is essential for the U.S. Trade Representative and Department of Commerce to continue monitoring trade access issues in Japan."
In addition, Scalise agrees with U.S. trade officials who have said Japan's willingness to "sustain the openness" of its chip markets will most likely have a positive impact on the entire Asian region, which has suffered from the financial turmoil in recent months.