Japan opens up to U.S. chipmakers

November 28, 1990|By San Francisco Chronicle

Japan's semiconductor market has become noticeably more receptive to U.S.-made products,and American chipmakers are publicizing that fact for the first time.

A new report, issued yesterday by the Cupertino, Calif.-based Semiconductor Industry Association, argues that a controversial trade agreement with Japan has significantly increased U.S. companies' market share in that country.

Sales of all foreign-made semiconductors in Japan reached 13.3 percent market share in the second quarter of this year, the association noted, up from 8.4 percent when the agreement took effect in 1986.

Positive observations about the Japanese market are a significant change in tactics as the U.S. industry begins its most important lobbying push in years -- an effort to persuade the Bush administration to negotiate a new agreement by the time the existing pact expires next July.

The trade agreement was designed to stop Japanese companies from dumping their chips in the U.S. market at less than production cost, as well as to encourage more sales by U.S. companies in Japan.

Dumping has stopped, but the industry association has long complained that foreign market share in Japan remains far below 20 percent, a target that the United States contends was established by the agreement.

This time around, though U.S. market share in Japan is much less than in other foreign markets, the association is stressing that the trade agreement is working -- it just needs more time.

"This is an agreement that is beginning to succeed, and an example of the U.S. government and industry working together -- an effort of which you can be proud," said Andy Procassini, the association's president, in a letter to President Bush.

Actually, the very latest data show a slight negative trend. In the third quarter ending in September, foreign market share in Japan actually declined to 13 percent. Association officials say these numbers came in after their report was drafted and that they have not yet determined the cause of the change.

Industry observers say a more conciliatory tone reflects some new realities for U.S. chip manufacturers.

Some of the strides by U.S. companies are particularly impressive. LSI Logic, a Milpitas, Calif.-based company, reports that it has doubled sales in Japan in each of the last two years and expects to do so again this year. "In the past two years, there have really been significant efforts by the Japanese," said Wilf Corrigan, LSI's chief executive.

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