Asianometry Why Was Japan So "Good" at Semiconductors?
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Feb 23, 2025 Discover the dramatic rise of Japan's semiconductor industry in the late 20th century. From capturing nearly 40% of the market to shaking American business confidence, their unique vertical integration played a key role. Yet, as quickly as they ascended, factors like global competition contributed to their decline. This intriguing analysis reveals whether Japan's semiconductor prowess was genuinely exceptional or if it was a case of overstated capability.
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Japan's Semiconductor Success: A Misconception?
- Japan's semiconductor industry success, especially in memory, was more perceived than real.
- Several factors contributed to this perception, which will be explored further.
Vertical Integration in Japanese Semiconductor Industry
- Six major Japanese companies dominated the memory market: NEC, Fujitsu, Hitachi, Toshiba, Mitsubishi Electric, and Oki Electric.
- These companies benefited from vertical integration within larger business families, ensuring demand and quality control.
Quality Standards: US Military vs. Japan's NTT
- In the 1970s, half of the world's integrated circuits were used in calculators, demonstrating high volume demand.
- Unlike the US military's role in setting quality standards for American semiconductors, Japan's NTT collaborated with companies like Fujitsu, Hitachi, and NEC to ensure quality.