SEVILLE, Spain – The Japanese semiconductor industry, which has been in decline for more than 20 years, needs to select key technology areas and refocus to rise again, Junshi (JJ) Yamaguchi, former chairman of chip company Renesas Electronics Corp., told the International Electronics Forum, being organized here.
Yamaguchi, who now serves as special advisor to Renesas and as chairman of the Japan Semiconductor Industry Association, indicated that the tragedy of the great Japanese earthquake and tsunami of March 2011 could yet prove to be a turning a point of for the country and its remaining chip manufacturers.
He opened his presentation by painting a picture of the decline of the Japanese chip industry as a percentage of the global output. This went from 51 percent in 1988 to 44 percent in 1994 to 29 percent in 1998 and to just 20 percent in 2010, he said.
Yamaguchi explained the key events that prompted the decline.
In the 1970s Japan had decided to invest in DRAM production. Increasing sales of personal computers in the 1980s drove DRAM consumption resulting in high volumes and revenues for numerous Japanese chip companies.
The turning point was political intervention by the United States that led to the signing in 1988 of U.S.–Japan Semiconductor Agreement in 1988. Under the agreement Japan agreed to not to sell DRAMs at below cost and also to raise the U.S. market share in the Japanese chip market from the prevailing 10 percent to 20 percent. "Limits on Japanese capex and imports helped create South Korea as a force [in DRAMs and semiconductors]," said Yamaguchi.
However, Japan continued to be too conservative Yamaguchi said. Its problems continued when, having been largely forced out of DRAMs it stayed focused on ASIC production for too long. "In the 2000s there was a strong market for SoCs; that is ASSPs rather than ASICs." During this time there was rapid growth in foundry.
Japan's declining global market share