Tuesday, March 21, 2017

What Ever Happened to the Japanese Microchip Industry?

David E. Sanger wrote in the New York Times in 1986 that the
American electronics industry . . . has virtually lost the entire memory market to low-cost Japanese competitors . . . Dozens of American manufacturers have fled the commodity memory chip business, unable to match Japan's remarkable manufacturing efficiencies or constant price cutting . . . By most estimates, Japanese manufacturers have seized a remarkable 85 percent of the market for the current generation of chips . . .
Moreover, Japan's lead showed signs of widening. By 1988 the country accounted for over half the world's microchip production (51 percent in 1988), with the top three makers (NEC, Hitachi, Toshiba) all Japanese. At the end of the decade Japanese chip makers were expected to put 16-megabit chips onto the market while U.S. companies were just getting around to making 4-megabit ones (two doublings behind), and Japan was the first to unveil the prototypes of far more advanced chips than those--the 64-megabit chip in 1990 and the 256-megabit in 1992 (64 times--6 doublings--as powerful as the 4-megabit chip standard at the time), events which got considerable press coverage. Indeed, Japan's position in the sector was regarded as emblematic of its industrial prowess, and even a basis for claims of superpower status.1

Such talk evaporated during the '90s, and seems virtually forgotten today.

What happened?

The conventional wisdom chalks it up to the idea that the Japanese companies weren't doing so well as they had been given credit for, the U.S. better--that Japanese business had got about as far as its practices could take it and was too rigid to change, in contrast with freewheeling, endlessly reinventing itself America, epitomized by that subject of endless libertarian paeans, the Silicon Valley start-up.

However, while American firms rallied (with Intel the outstanding success story) and Japanese firms made mistakes in coping with the resulting, more competitive market (like the flawed restructuring efforts that spun off firms too undercapitalized to compete), the reality is more complex. Such a disproportionate share of any market as Japan enjoyed in the late '80s generally tends to be fleeting--especially when the product is evolving rapidly, and the market rapidly growing. Both of these considerations applied here, as rapidly growing chip capabilities meant rapid changes in the productive plant, and chip consumption rose exponentially--making advantage temporary, and creating opportunity for those looking to grab a piece of the action.

There was, too, the question of how Japanese chipmakers came to enjoy their extraordinary '80s-era position in the first place--not only through the quality of their chips, but the success of their most important customers in their own lines. These happened to be Japanese makers of consumer electronics (like Sony), who had the dominant global position in their own sectors in those years--which, since they bought their chips from a few Japanese firms, made those industrial giants' squarely orienting themselves to their chip needs a plausible strategy. However, as the share of the world consumer electronics market these companies enjoyed declined, so did the share of the potential customer base for microchips they constituted--just as new, lower-cost chip producers entered the world market (like South Korea's Samsung).

Still, for all the changes, and the missteps, Japan remains a significant producer of chips today--accounting for 14 percent of the world total in 2013, after just the United States and South Korea.

Additionally, there is the matter of the market for the equipment needed to make the chips, like the raw materials from which the chips are made (like silicon wafers) and the manufacturing equipment needed to print circuits on them (like photolithography equipment). Japan's production accounts for an extraordinary 50 percent of the former, and 30 percent of the latter. While less often publicized, such totals in these difficult, exacting areas are arguably even more impressive testaments to Japan's manufacturing prowess than the chip sales of three decades ago.

1. Shintaro Ishihara famously declared in his book The Japan That Can Say No that Japan's lead in the technology put the nuclear balance in its hands, because that nation alone could make the chips needed for accurate nuclear warhead guidance, while the victory of U.S. forces in the 1991 Gulf War was hailed as actually a triumph of Japanese technology, because there were Japanese components guiding its weapons.

James Bond for the YA Crowd?

It has long been impossible to pay much attention to contemporary science fiction and fantasy and not be hugely aware of the presence of young adult fiction within it. The historic commercial success of such franchises as Harry Potter, Twilight, Percy Jackson, The Hunger Games and Divergent (among others) has loomed large within not just the genre landscape, but popular culture as a whole. Indeed, Game of Thrones apart, virtually every really major publishing success of the genre has been a YA phenomenon. And while the esteem for such works among the hard core of science fiction and fantasy fans, and especially the "higherbrow" among them, has not been on a par with their commercial success, YA has attracted the attention of such critical darlings as Cory Doctorow, Paul di Filippo and Scott Westerfeld, each writing heavily in this area in recent years, and even getting some critical recognition for the results, as with the Hugo nomination Doctorow got for Little Brother.

The same cannot be said of other genres. Indeed, science fiction and fantasy have done as well as they have in YA because of the lingering prejudice that they are kid's stuff anyway, and ironically, because of the way in which the adult stuff has become so adult--so involved, so dense, so literary, often at the same time, that someone who has not been a longtime reader of contemporary science fiction and fantasy has a hard time getting into it, or even getting it at all. (That a book like The Hunger Games is so apt to seem derivative and undemanding and unimpressive to someone who reads full-blown literary science fiction for grown-ups is an asset, not a liability, in the marketplace.)

By contrast, a YA thriller is necessarily a toned-down thriller--which does not mean that it cannot be entertaining, but must eschew the easier ways of achieving its effects by being restrained in handling its violence and other, rougher fare. All the same, writers do write thrillers aimed at the YA market, and that has long included spin-offs of 007--going all the way back at least to R.D. Mascott's The Adventures of James Bond Junior 003 1/2 (1967)--as well as imitations, one of the more successful of which has been the Alex Rider novels of Anthony Horowitz, of which there are presently ten in print, with an eleventh reportedly on the way this year.

Personally I have taken little interest in these efforts, giving them only cursory attention even while tracking down and reading every one of the regular continuation novels. Still, having recently reviewed Horowoitz's Bond continuation novel Trigger Mortis (2015), I decided to give the first Alex Rider book, Stormbreaker, a look, not because I thought he had done anything really new with the concept (the tradition was already well-worn when Fleming came up with Bond, just an update of a half century of clubland heroes), but because I was curious as to how he would cram Bondian adventure into the life of a young adult, and whether very much of such adventure would remain in it when he was done. You can read my thoughts on that book here.

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