EXAMPLES OF U.S.-JAPAN ALLIANCES: ASSESSING COSTS AND BENEFITS

To assess the costs and benefits of alliances, it is necessary to look in some detail at specific examples. A number of examples of U.S.-Japan semiconductor alliances are treated in this report. In Appendix A, three cases are described in detail: Motorola-Toshiba, Sun Microsystems-Fujitsu, and Kubota's series of alliances with U.S. semiconductor and computer companies. Other examples are described less extensively in the section on asymmetrical pairings (Power Integrations-Matsushita, TriQuint's difficulty in forming a satisfactory alliance, and nCHIP-Sumitomo Metal and Mining) or symmetrical pairings (LSI Logic-Kawasaki Steel). Finally, in Chapter 8, examples of alliances are used to illustrate the trouble U.S. start-up companies in semiconductor equipment and materials have in attracting capital and the implications of computer industry trends for the semiconductor industry.

Together, the cases and examples are representative of the broad range of partnering firms, motivations, and mechanisms that characterize U.S.-Japan semiconductor alliances. Motorola-Toshiba is a large U.S. company-large Japanese company alliance that includes a variety of mechanisms, such as licensing, a manufacturing joint venture, joint product development, and marketing cooperation. Sun-Fujitsu is a small (at the time the alliance was formed) U.S. company-large Japanese semiconductor company linkage that centers on a supplier-manufacturer relationship comprising licensing, consigned product development, and manufacturing foundry aspects. The Kubota case illustrates the variety of mechanisms that a large Japanese company can use to partner with small U.S. firms in support of an effort to enter the semiconductor and information industries laterally. The examples of asymmetrical alliances describe the considerations of U.S. start-up companies in forming alliances with large Japanese companies.

Gaps in the representativeness of these examples are generally in areas that are important but have a limited number of examples. One fairly new type of alliance that is not included is licensing of Japanese product technology to U.S. firms. NEC and Mitsubishi Electric have licensed products to AT&T, but this pattern is still unusual. A large-scale collaborative product development effort is another type of alliance not covered in detail here, but Texas Instruments-Hitachi is perhaps the only alliance that fits this category.38 Large government-sponsored R&D consortia, such as Japan's Very Large Scale Integration Project and SEMATECH in the United States,

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In liquid crystal displays, a type of semiconductor for all practical purposes, the DTI joint venture between IBM and Toshiba might also fit into this category. As a manufacturing joint venture, DTI is perhaps more complex than Texas Instruments-Hitachi.



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