FIGURE 3 American-Japanese semiconductor alliances: 1984–1990. Source: Bruce Kogut and Dong-Jae Kim, "Strategic Alliances of Semiconductor Firms, "unpublished report to Dataquest, January 1991.

Therefore, it is almost impossible to estimate the total number of U.S.-Japan alliances with precision. Interviews with U.S. executives suggest that the available figures greatly understate the actual number; indeed, public data may represent less than half of the actual number of American-Japanese alliances. Although data are incomplete, it is clear that U.S.-Japan alliance activity in semiconductors has generally followed an upward trend over the past decade. That trend is not likely to fall off sharply.

One obvious factor explains the proliferation of alliances from the mid-to late 1980s: the growing and immense size of the Japanese semiconductor market, which had become the largest in the world by 1988. Seeing this trend clearly, U.S. semiconductor firms realized their need to find a way to ride the crest of Japanese growth. Strategic alliances with Japanese partners offered a vehicle for gaining a foothold in Japan's growing but, for many, still difficult to penetrate market. Conversely, Japan's rapidly growing semiconductor industry absorbed large amounts of foreign technology through alliances that might not have been developed by U.S. partners relying on their own resources. Joint ventures, marketing, sales, distribution, servicing, and standards coordination—relatively recent alliance types—can be traced to the dramatic growth of the Japanese market and the commercial imperative for U.S. companies to get involved.

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