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Sayonara, Japan Semiconductor Inc.

4/12/2016 08:43 AM EDT
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Adele.Hars
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Still some aces in the hole?
Adele.Hars   4/21/2016 5:10:56 AM
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Great insights as always, Junko. But what about the aces Japan Inc may have in the hole? From what I've been able to gleen over the last 10 years, a substantial body of key research in Japan has focused on developing a deep understanding of ultra-low power and sensors. Also, per an EETimes/Japan article a year ago, Renesas is leveraging legacy 65nm fabs but using FD-SOI technology (which they pioneered as SOTB for "Silicon on Thin Box" over a decade ago) -- those chips should be hitting the market right now -- this might be the good-enough/cheap-enough solution alluded to (especially for automotive) in earlier comments? And at the Semicon Europa 2014 Low Power Conference in 2014, Renesas presented a demo they'd done of a 32 bit CPU on 65nm SOTB with back bias that operates eternally (!!) with ambient indoor light. And of course there's the Sony GPS on 28nm FD-SOI, which is currently sampling to customers and consumes 1/10 of the power of their previsous generation (per the presentation they gave at FD-SOI Symposium in San Jose last week). If Japan's chip companies can overcome their structural issues, they could be extremely well-positioned for IoT.  In which case, might Japan Semi be able to cite the famous Mark Twain quote: "The reports of my death have been greatly exaggerated..."?

Y_Ando
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A larger picture based on SEMI's data
Y_Ando   4/21/2016 4:11:35 AM
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The article viewpoint on the destiny of Japan's semiconductor industry is an interesting perspective; however, SEMI's data completes a larger picture.

Japan has been, and still is, an important semiconductor region.  Currently, Japan is the third largest semiconductor materials market after Taiwan and Korea. Japan's materials market is supported by a large installed fab capacity base (front-end). Japan has the third largest global 300mm production capacity and the largest global 200mm production capacity, according to SEMI's Fab Database.

SEMI foresees increasing importance of 200mm capacity in response to the high growth in demand from IoT applications (sensors, micros and communication). 

pcambou
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Failure and success
pcambou   4/19/2016 2:24:26 AM
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Great article Junko, maybe a little harsh on Japanese Management...

What made Sony so successfull in CIS is exactly what doomed the other companies in other domains.
1/ in CIS, technology proved to be the differentiating factor that helped Sony grab market share
2/ While evey one was listening to customer demand for smaller-cheaper CIS, Sony invested in better quality, it was counter intuitive at the time, but it was the right move to eventually serve Apple and the entire smartphone industry
3/ Once customer traction was found, Sony did massive capital expenditure, low investment from other companies was probably more a result than a cause

If we compare to the US semiconductor industry, it mainly survived through a fabless strategy which the Japanese were not inclined to develop. Eventhough this strategy proved successful on the short term, because it offered the agility the Japanese companies were missing, I can see that this strategy is having some trouble right now (Omnivision, Qualcomm,...)

We have witnessed a perfect "Innovator's dilemma" cycle, Japan is moving upmarket, and Korea is slowly taking the lead

y_sasaki
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Re: Anyone Remember the Japanese Managment Fads of the 80s?
y_sasaki   4/14/2016 6:35:44 PM
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Seriously, I wonder if Japanese companies would be more flexible if their salarymen spent their evenings on something more constructive than collective drinking sessions, if only getting more sleep?


Fortunately or unfortunately, those infamous "After-five Izakaya session" is getting less frequent in these days. Younger generation generally do not like to spend thier private time for semi-official but unpaid company event. Anyway, we do not have much time for Izakaya neither. In Japanese tech industry it is extremely rare enginners left office on time. They usually work until 8:00-9:00PM regularly.

One reason is we have too much interrupts (usually meetings) in daytime, hard to concentrate on engineering matter. Another reason is demanding customer - ridiculously short deadline and never-satisfying feature requirement.

Feature creeping is almost obsessing in Japan. If youre (potential) competitor have it, or your previous product had it, it MUST be included in new product requirement, no question, no argument. They rarely care how many end users acutally use them, or if the fature is getting obsolete. Yes it is management issue, but management mantra in Japan is "Customer is God". They (our customer) may have their own customer and they may also face similar situation. In the end, large amount of engineering is spent to make product with whole kind of bells and whistles nobody really ever need or want.

DMcCunney
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Re: Anyone Remember the Japanese Managment Fads of the 80s?
DMcCunney   4/14/2016 5:05:04 PM
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@perl_geek: Seriously, I wonder if Japanese companies would be more flexible if their salarymen spent their evenings on something more constructive than collective drinking sessions, if only getting more sleep?

Maybe, but I doubt it.  There are fundamental differences in organizational culture.  I read an account at one point of an American company doing a joint venture with a Japanese partner.  A group would come over from Japan for a round of intensive briefings.  They would return to Japan, only to be replaced by another Japanese group needing the same briefings.  This went through several rounds, and the American partner was making "WTF?  We already explained this to them.." noises.

In an American company, the CEO and his direct reports will decide the company should do something and the word will come down from on high and all will be expected to comply.  Japanese companies are far more concensus oriented and "bottom up" in style.  The Japanese outfit had sent over representatives from all of its affected areas to learn what they would need to do.

This makes Japanese companies blindingly fast to implement a plan, as all involved have been presold on what the plan is and what thier part in it will be.  It makes them correspondingly slower to come up with a new plan in the first place, as there must be agreement a new plan is needed and just what it ought to be, and that won't be simply proclaimed from on high.

Square and cube the difficulties when the concensus involved includes management, labor, and the Japanese government.

The salarymen are only one part of the equation.

>Dennis

 

 

perl_geek
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Re: Anyone Remember the Japanese Managment Fads of the 80s?
perl_geek   4/14/2016 3:05:02 PM
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A typical joke in the '70s and '80s was about 3 businessmen who'd been kidnapped by terrorists, a Frenchman, an American, and a Japanese. The captors were about to execute the 3, but granted them one last request.

The Frenchman asked for a bottle of Champagne, a fine Camembert, and a bagutte for a last meal.

The Japanese said "I would like to deliver a short talk on Japanese management methods".

The American said "Kill me first, please, so I don't have to hear another lecture on Japanese maangement."

 

Seriously, I wonder if Japanese companies would be more flexible if their salarymen spent their evenings on something more constructive than collective drinking sessions, if only getting more sleep?

RadioGraybeard
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Re: Anyone Remember the Japanese Managment Fads of the 80s?
RadioGraybeard   4/13/2016 10:08:47 PM
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Roger all that.  I'm old enough to remember the joke from the '60s: "marriage is made in heaven; everything else that doesn't last is made in Japan".  That attitude had completely reversed by the late 70s.  Not just Toyotas and Datsuns, but especially Nikon, Canon, and Minolta.  Still have my 35 year old Minolta film SLR.  Likewise, I worked in quality management in electronics factories and ate up the stories of W. Edwards Deming and all he did for them.  And, later, us. 

The company I just retired from was very big on lean, which means we all took "lean six-sigma" courses, statistics and more.  Figuring out how to apply lean to the design factory was not easy. 

 

DMcCunney
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Re: Anyone Remember the Japanese Managment Fads of the 80s?
DMcCunney   4/13/2016 9:17:24 PM
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@RadioGreybeard:Yes, I do.

We imported "The Art of Japanese Management", "Quality Circles", and (more recently) "Lean Manufacturing" from Japan.

And for good reason.  Japan's industrial rennaissance arguably began with the Meiji Restoration, but got a huge boost in World War II.  The Allies did Japan a favor in disguise, with strategic bombing intended to cripple Japan's capacity to make war materials.  By the time Japan surrendered, their industrial plant was effectively gone.  They had to rebuild from scratch, and did so using state of the art equipment imported from the West, and management techniques imported from the US.  They promptly started doing things like eat US steelmakers who had not invested in new technology for lunch.

"Quality circles" were a response to the need to move up in the market.  I recall a time when "Made in Japan" was a synonym for "Cheap junk, sold for pennies".  Japanese industries recognized that they needed to be seen as manufacturers of quality goods.  As the efforts bore fruit, Made in Japan became a synonym for high quality, and Japanese automakers began eating Detriot automakers for lunch with cars that were demonstrably better.

"Lean manufacturing" was an example of a Japanese strength.  We don't normally think of the Japanese as innovators, but they are masters at taking existing processes and refining them, and Lean Manufacturing and JIT inventory control are examples.

But not being innovators is a symptom of the underlying problems.  You've refined your processes till they are as good as they can be, to do what you currently do.  You need to do something new to survice and prosper in the new world that is evolving.  What might that be?  Guess wrong, and you are in trouble.

And the folks Junko interviewed pretty much said that celebrated Japanese Management wasn't exactly "genius bar" level.

It depends on what area you look at.  In areas of process refiment, Jpanese management has been at genius level.  Their failure has been in recognizing changes in the world economy and understanding what they had to do to adapt.


>Dennis

RadioGraybeard
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Anyone Remember the Japanese Managment Fads of the 80s?
RadioGraybeard   4/13/2016 8:06:15 PM
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In the '80s, I think it was commonly assumed the Japanese were going to take over the world.  We imported "The Art of Japanese Management", "Quality Circles", and (more recently) "Lean Manufacturing" from Japan.  When their economy started going bad in the late 80s/early 90s, who would have guessed they'd be in a 25 year recession now?  

 

The way I read that table of sales vs. year, in 1990, six of the top ten (!) companies by sale were Japanese, gathering 38% of worldwide semiconductor sales.  Last year, only one Japanese company remained and it was in 9th place, accounting for only 2.7% of worldwide semiconductor sales.  And the folks Junko interviewed pretty much said that celebrated Japanese Management wasn't exactly "genius bar" level.

 

 

realjjj
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Re: performance vs quality
realjjj   4/13/2016 6:32:29 PM
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It's not always easy to change direction and maybe there is more context as to why they got stuck on reliable DRAM. Were they listed, what was the ASP and margins difference between the 2 types of DRAM. It wouldn't be an excuse but it's not always easy.

What would you do today if you were Intel's CEO? in 2020 it will be very easy to see what Intel should have done, today there is no great answer.

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