By Jiang Peiyu
In just over 30 years, few people remember the chip war that broke out between Japan and the United States.
The Japanese lost the war cleanly, from a peak of nearly 80% of the world's DRAM (commonly known as computer memory) share, to now zero. This war on chips is a perfect illustration of international political economy, Adam. Smith's theory of free market competition in the Big Country Industry PK, but a beautiful fairy tale.
The first five 1980s were the bloom moment for the Japanese semiconductor chip company.
Technology start-ups like Intel and AMD in Silicon Valley were chased and beaten by the Japanese in the field of semiconductor storage, and then were overthrown and driven from the throne, the field of semiconductor chips, then dominated by semiconductor memory, became a back garden for Japanese companies.
The development model of Silicon Valley is to inject capital into startups through venture capital, and after the startups receive financial support, they carry out continuous technological innovation to obtain the market, increase the company's valuation, and then go public, and venture capital sells stocks to make a profit and exit.This model is market-oriented and efficient, but the volume is small, and it is difficult for companies to integrate resources, after all, everyone is a competitor who grabs food in one pot.
Japan's plans also came close to collapse, with companies wary of one another and the government belatedly committing funds. At a critical moment, Yasuo uigai, the founder of Japanese semiconductor research, came forward, using his prestige to bring together interested parties.
Yasuo Tasui's rhetoric is simple and clear: only by working together can we change the backward situation of Japan's basic chip technology, and when the research results come out, each company will carry out its own product research and development, only in this way can we reverse the dilemma of Japanese companies fighting alone in international competition.
Modern semiconductor memory chip factories are springing up in Japan. With production lines running day and night, the Japanese launched a saturation attack.
America's nightmare begins. In 1980, Japan captured 30% of the semiconductor memory market, five years later, Japan's share is more than 50% , the United States was left behind.
Silicon Valley's high-tech companies, fed up with plummeting market share, have been flying reconnaissance missions across the Pacific to Japan with desperate results. Andy, then Intel's Head of manufacturing, said:. “People coming back from Japan paint a very grim picture of the situation,” Grove says gloomily. If Grove had visited Japan, he would have been horrified: a Japanese company was developing memory chips for an entire building, the first floor of the development of 16KB capacity, the second floor of the development of 64KB, the third floor of the development of 256KB. The Japanese r & D rhythm is simply the legendary three arrows, so accustomed to one-handed knife-wielding silicon valley enterprises have no resistance.
What makes Americans feel suffocated is that Japan's memory chips are not only large in quantity, but also of good quality.In the 1980s, the American Semiconductor Association conducted quality tests on memory chips in the United States and Japan in the hope of finding the weaknesses of opponents, and found that the highest quality memory chips in the United States were worse than the worst quality in Japan.
Moreover, the Japanese also pat their chests to assure customers: Japan's memory chips guarantee quality for 25 years!
Intel almost died
Under Japan's aggressive attack, American chip companies were defeated, and financial data was like melting ice cream, a mess.
In 1981, AMD's net income fell by two-thirds, and National Semiconductor lost $11 million, having made $52 million the previous year. The following year, Intel was forced to lay off 2,000 employees. The Japanese continued to expand, the Americans continued to mourn, and in 1985 Intel surrendered its DRAM storage business, losing $173 million in the war, it was the first loss since the listing. At Intel's most critical moment, the chip giant would probably have collapsed or been acquired, and the history of the U.S. information industry would have been changed, if IBM hadn't bailed it out and bought 12 percent of its bonds to guarantee its cash flow.
Intel founder Robert . Noyce (left) and other Silicon Valley companies formed SIA with the goal of coping with competition from Japanese semiconductor companies
Intel founder Robert . Noyce lamented that the United States had entered a process of "imperial decline."If this continues, he asserts, Silicon Valley will be in ruins.
To add insult to injury, Fujitsu plans to buy 80 per cent of the Fairchild Semiconductor. The Fairchild Semiconductor is a living fossil of Silicon Valley, where the founders of most tech companies, including Intel and AMD, were once Fairchild Semiconductor employees. Isn't it a shame that in Silicon Valley, where Fairchild Semiconductor exist, the Japanese are now buying their gods? “The deal sends a message that we are falling behind,” one us newspaper reported. “What matters is how we respond to it.”
A few years ago, Silicon Valley tech companies formed the Semiconductor Industry Association (SIA) to respond to the Japanese attack, and after years of lobbying, the results were as follows: reducing the capital income tax rate from 49% to 28% and pushing pensions into venture capital.But the government just wasn't willing to help.
Magic logic turns the tables
Sia's view is that a weakening of the US semiconductor industry would pose a significant national security risk.
The logical chain of Sia goes like this:
Because superweapon technology is inseparable from superelectronic technology, and superelectronic technology is inseparable from the latest semiconductor technology (there is nothing wrong with this);
Foreign sources are unreliable, running out of goods for the US in wartime and for the US's rival Soviet Union in non-wartime (the Japanese will probably cry when they see this) ;
Therefore, the United States allows Japan to dominate in the field of semiconductor chips, which is equivalent to sacrificing national security... (The hearts of the Japanese are dripping blood at the moment).
Previously, SIA lobbied for 7 years, and the response from the government was always: the United States is a free market, and government power should not interfere with business activities.
The Americans vented their frustration by smashing Japanese semiconductor radios
This time, the SIA's “National Security Doctrine” has Enlightened the US government from being slow to hasty and surprisingly efficient:
In the spring of 1986, it was found guilty of read-only memory dumping; in September, the us-japan semiconductor agreement was signed, requiring it to open up its semiconductor market to foreign companies with a guarantee of 20 per cent market share for five years; and soon after, imposed punitive tariffs of 100 per cent on $300m of Japanese chip exports and vetoed Fujitsu's Fairchild Semiconductor.
The chief U.S. trade representative in Asia responsible for dealing with Japan, Clyde. Prestowic, while accusing Japan's semiconductor chip industry policy of being unreasonable, also praised it, "So I told the US government that we should also take the same policy measures as Japan."”
In response to this double standard, Takashi Yugami, who has worked for many years at Hitachi Manufacturing and Elpida, said angrily in his book: "This person is really deceiving people! ”
Samsung mending knife
It can be said that the war with the Americans, the Japanese had basically lost the capital accumulated, the entire country hard struggle for 11 years (from 1975 to 1986) , was returned to the liberation of the night before.
But the meat spit out by the Japanese did not fall into the mouths of Americans, because more than 70% of Silicon Valley technology companies cut DRAM businesses (including Intel and AMD), and after 1986, the market share curve of Americans was a dead earthworm lying sideways, which has been around 20%.
Intel lost out to the Japanese and eventually abandoned semiconductor storage for microprocessors
So who gets the 70% of the market?
The answer is South Korea.
South Korea's DRAM took off around 1986, when the US beat the crap out of it in Japan, but it was as big as a toddler and had no presence in the global semiconductor chip industry. And compared with Japan, to Samsung as a representative of the Korean semiconductor chip companies are completely 360 degrees of no dead-end chicken: no way to enter the japanese-dominated high-end market, only low-end market by low-cost living; In market size, the two are the difference between ants and elephants.
But Samsung understands that all trade friction issues belong to the realm of political economy, and took the opportunity to overturn the Japanese elephant.
In the 1990s, Samsung faced anti-dumping lawsuits initiated by the United States, but its head Lee Kun-hee cleverly took advantage of the opportunity of the Americans to suppress the Japanese semiconductor industry and sent a strong public relations team to lobby the Clinton administration: "If Samsung cannot manufacture chips normally, the trend of Japanese companies occupying the market will be more obvious, and the reduction of competitors will further raise the price of chips purchased by American companies, which will be more unfavorable to American companies."”
As a result, the United States charged Samsung only 0.74% of the anti-dumping duty, Japan was charged as much as 100% anti-dumping duty, the operation is simply not even the appearance of not bother.
Samsung's embrace of the United States is tantamount to giving Japan a stab in the back, making Japan completely out of the game.
The deciding factor
Without Samsung's reinforcements, there is still hope for Japanese semiconductor chips to get out of trouble.
After Samsung joined the battle group and took the initiative to side with the United States, the irreplaceable Japanese suddenly became dispensable, and Koreans became new favorites.Subsequently, Samsung's DRAM "bidirectional data selection scheme" was recognized by the US Semiconductor Standardization Board as a memory matching microprocessor, and Japan was excluded.In this way, Samsung successfully jumped on the microprocessor-driven personal computer era and led Japanese companies.
From the share of DRAM at that time, it can be found that Japan's share fell off a cliff, and South Korea's was a steep upward curve, one up and down two lines formed a huge pair of scissors, cutting the future of Japanese semiconductor chips.
Since then, even if the Japanese government has intensively introduced semiconductor industry support policies and invested a lot of money, it has not been able to return to the sky, and the fate of Japan's semiconductor chip is decided.
Until today, there is still a view that the rise of semiconductor chips in South Korea and the decline of semiconductor chips in Japan are the result of industrial transfer.This is inaccurate because industrial transfer is the migration of production lines/factories from areas with high labor costs to areas with low labor costs, and Japanese semiconductor chip companies have not migrated production lines to South Korea, but have been directly replaced.The Americans actually joined forces with South Korea to reorganize the global semiconductor industry supply chain, erasing the Japanese from the supply chain and wiping away an industrial force that seemed indispensable in the world.
Throughout the chip war between Japan and the United States, whether to master the ability to reorganize the global industrial chain is the key to victory in the trade war, and the amount of market share does not constitute the main strength factor, which is also one of the key reasons why Japan lost the chip war.
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