SEMICONDUCTORS Industry patiently educating Washington

March 23, 1992|By Valerie Rice | Valerie Rice,Knight-Ridder News Service

WASHINGTON -- It has taken more than 10 years of annual lobbying trips, but it finally seems legislators and administration officials have learned the meaning of one of Silicon Valley's most important "s" words: semiconductors.

But after 60 meetings with government people during a visit here recently, semiconductor industry executives were less certain that the government understood the importance of that other vital "s" word: sanctions.

Members of the Semiconductor Industry Association were in Washington to ask the Bush administration and Congress to enforce a troubled semiconductor trade agreement with Japan. The agreement calls for foreign semiconductor companies to reach a 20 percent share of the lucrative Japanese market by the end of this year, but that market share has been stalled at 14.3 percent for almost two years.

Worried the agreement will fizzle and that the Japanese may be illegally dumping chips in the United States, the San Jose, Calif.-based SIA's board of directors said publicly for the first time that they will ask the government for sanctions against Japan if the terms of the agreement aren't met. Two dozen chip company executives swarmed Capitol Hill wearing "20 percent" lapel buttons to carry the message that the agreement was failing and stronger measures should be considered.

Although industry executives characterized this as one of their most successful trips to Washington, the group didn't get vocal support for the idea of sanctions -- either from the Bush administration or their computer customers, who joined with them to ask for the agreement in the first place.

Instead, sources in the group and Congress said, the group was told it was too early to start even thinking about sanctions, because the agreement still has nine months to go. Also, Clayton Yeutter, President Bush's special counselor on domestic policy, said it might be hard to hold the Japanese to the market share part of the deal because Japan's economy is in a tough recession and the nation is trying to support its own industries.

Privately, semiconductor executives said they hoped their lobbying efforts will pay off in about a week when market share data for the fourth quarter of 1991 in Japan will be available.

Many believe the foreign market share may actually have declined.

A public statement of support from someone such as United States Trade Representative Carla A. Hills when the information is released would be crucial for the industry, observers said.

A meeting with Mrs. Hills, who has been openly critical of the agreement because she didn't think the market share goal was needed, went surprisingly well, industry executives said. And they stressed that Washington is finally hearing their message.

"We are very satisfied with her response on commitment to the agreement," said Gilbert Amelio, president of National Semiconductor Corp. in Santa Clara, Calif.

A spokesman for Mrs. Hills said the meeting went well but wouldn't comment on whether she will issue a new statement on the matter.

But Mr. Amelio said Mrs. Hills and others in government responded well. "We are really much better understood by the administration and by government officials.

"They have a much greater appreciation of the importance of microelectronics."

At one lobbying meeting where a reporter was present, it was clear much of the technology discussed was lost on legislative aides and busy legislators. But industry executives tried to get around that by sticking to some simple ideas, like the phrase "A deal is a deal," to describe the Trade Agreement Compliance Act the industry is pushing for.

The SIA also asked legislators to put pressure on Mrs. Hills to enforce the trade agreement; to increase to $100 million the funding for Sematech, the government-industry chip research consortium in Austin, Texas; and to consider changes in the tax law to help the industry remain competitive.

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