TOKYO -- While Japanese and U.S. negotiators haggle toward a new agreement on computer microchip imports, astronomical investment costs are reshaping the industry in ways that may make it hard to say which chips come from which country.
Four of the six Japanese makers that rank in the world's top 10 -- including the ones that occupied first, second and third place in 1990 global market share -- now have working agreements with at least one U.S. competitor to make or develop some chips together.
Some Japanese companies also have signed agreements with competitors in South Korea and Europe, and some U.S. companies have signed agreements with competitors in Europe.
At stake for many companies, Japanese, U.S. and European, is survival as a mass producer of the microprocessor, the complex "brains" of a computer, and of a simpler chip called the direct random-access memory (D-RAM).
Together, the devices are the heart of a critical technology that has already revolutionized many existing products and created whole new product lines. The technology is likely to define the limits of computers, weapons, automobiles, televisions, telecommunications and other giant industries well into the next century.
Japanese companies have dominated D-RAM sales since driving many U.S. producers out of the field in the 1980s. Two U.S. firms, Intel Corp. and Motorola Inc., dominate sales of microprocessors, the intricately designed chips that control a computer.
Some commentators predict that no more than three of Japan's top six suppliers, no more than two of America's top four, and no more than one in Europe will be able to hang in through the daunting investment needs and unpredictable market gyrations of the 1990s.
By then, if current trends hold, a web of research, production and distribution agreements may have drawn most or all of the industry's surviving giants into global networks.
At the center of those networks, if the pattern continues, will be the surviving few Japanese companies, powered by their much greater financial strength and linked with surviving foreign companies that are steadily forsaking competition with the Japanese in favor of cooperation.
Driving these changes is a high-stakes dilemma that, even for relatively cash-rich Japanese participants, adds up to a megabucks one-two punch:
* The breathtaking pace of technological progress has dramatically increased investment costs.
For a new generation of chips expected to be in initial production by 1995, the minimum production facilities required of any serious entrant will cost more than $1 billion. For the current generation of chips, it was possible to be a serious player for less than a tenth of that.
* Meanwhile, rapid technological advances have made it almost impossible to forecast the returns on such immense investments.
The 1995-style chips, of which some Japanese companies have already made prototypes, are three generations beyond the 1-megabit models commonly used today.
The 64M chip expected in 1995 will be a bit bigger than a human thumbnail and will contain enough finely etched circuits -- each about 1/6250th of the thickness of a human hair -- that it can record all the words and numbers in the three biggest issues of The Sun published in any year.
Meanwhile, the transition to the 4-megabit capacity, is proving far harder to manage than most companies predicted a year ago.
By this spring, the 4M D-RAM, with its bigger capacity, higher speeds, lighter weight and smaller size, was supposed to be rising toward dominance of the field.
Instead, its popularity has been sidetracked by the 1M chip's falling price, which dropped from about $14 or $15 a year and a half ago to about $4 recently.
At those prices, some of the engineers who design the chips into end products have reversed course, using several old-type chips rather than one of the new ones, which cost more than five times as much.
Now virtually all makers who have started production of the new 4M D-RAM are rapidly piling up unexpected inventories. The inventories have grown because of the U.S. recession.
Japanese companies have delayed their projections of a takeoff in 4M D-RAM sales until some time in the second half of this year, but most say they will plunge ahead spending further hundreds of millions of dollars to add still more capacity.
"Unless we maintain a high level of investment, we cannot survive the high-tech race," Tomohiro Matsumura, a senior vice president of NEC Corp., the world's No. 1 chip supplier in 1990, told the Japan Economic Journal last month.
Meanwhile, some Japanese companies have already begun shipping engineering samples of the next generation, the 16M D-RAM, to customers so that they can begin designing them into products.
Business publications here report that some makers, discouraged by the current transition, have begun to think about scaling back plans for the 4M D-RAM and essentially leapfrogging a generation directly to the 16M.