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Japan Semiconductors
Semiconductor devices are the key components of
computers and
of a wide variety of other electronic equipment. Inasmuch
as the
entire electronics industry is considered vital to the
health and
growth of the economy, semiconductors received significant
attention in Japan during the 1970s and 1980s. By the end
of the
1980s, Japanese firms dominated world production and trade
in
certain segments of the semiconductor industry. In
particular, they
came to dominate the world market in dynamic random-access
memory
units (DRAMs). The Japanese share of the world merchant
market for
1-megabit DRAMs at the end of the decade, for example, was
estimated at 90 percent, while other estimates put the
Japanese
share of all semiconductor devices at 48 percent. Trade
data showed
that in 1988 Japan exported more than US$12 billion in
semiconductor devices (and vacuum tubes), representing a
dramatic
increase from US$6 million in 1960 and just over US$2
billion in
1980. Semiconductor imports, however, totaled only US$2.2
billion
in 1988.
The rise of Japanese competition and the decline in the
world
market share held by United States manufacturers, coupled
with
allegations of unfair trade practices, made semiconductors
a
contentious issue between the United States and Japan
throughout
the 1980s. The allegations included charges of dumping in
the
United States market and of import barriers artificially
limiting
the market share of United States firms selling in Japan.
Negotiations in 1986 produced an agreement that led to an
increase
in Japanese DRAM export prices and that also included a
provision
to increase the United States share of the Japanese market
(from
the 10 percent that prevailed at that time to 20 percent
by 1991).
United States complaints that Japan failed to carry out
the
agreement in good faith led to retaliation, the imposition
of
punitive 100 percent tariffs on US$300 million of Japanese
exports
to the United States. Evidence that the export prices of
DRAMs had
risen led to partial elimination of the sanctions, but
others
remained until compliance was seen in increasing the
United States
market share in Japan. This entire episode remained very
controversial at the end of the decade, particularly the
question
of specifying an acceptable market share for United
States-made
products in Japan.
Data as of January 1994
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