to gain access to the Japanese semiconductor market. From the late 1960s through the mid-1980s, Motorola shifted tactics a number of times in response to changes in Japanese government policy, market conditions, and lessons that it learned as a business organization.
In 1962, Motorola set up a sales office in Japan, but it soon became clear that this approach would not lead to significant participation in the Japanese market. At that time, Japan's formal trade barriers were substantial: the Ministry of International Trade and Industry (MITI) and the major electronics manufacturers tried to leverage protection of the domestic market and government-sponsored R&D programs in an effort to break the worldwide dominance of U.S. manufacturers in the semiconductor and computer industries. Although the success of this strategy became apparent a decade later, in 1970 the outcome was still in considerable doubt.
Motorola would have liked to set up a manufacturing facility in Japan to get around these trade barriers and participate in the rapidly growing Japanese market, which was led by the booming demand for televisions and hand-held calculators. However, Japanese government policy also restricted foreign direct investment. In order to manufacture, a joint venture with a Japanese partner had to be formed, with no more than 50 percent of the venture owned by the foreign entity. Motorola set up a joint venture with Alps Electric Co., Ltd., an electronic component maker with which it had previous dealings in other product lines. The joint venture, Alps-Motorola Semiconductor K.K. (AMSK), did back-end assembly and testing of devices, Japanese sales, and warehousing.
Motorola hoped that AMSK would evolve into a major Japanese supplier of its products. The venture ran into a number of difficulties and collapsed during the 1974–1975 industry recession. Besides the business climate, this failure may have been partly due to Motorola's inexperience in operating in Japan. The original joint venture agreement was not entirely explicit about spheres of authority, an omission that might not have made a difference in another setting but led to problems in Japan. Although the venture failed, those connected with it learned to appreciate the complexity of doing business in Japan, the value of making agreements with partners as explicit as possible, and the effort and care that would be necessary to have a chance at success. Motorola also learned that it was probably best to leave personnel and other administrative functions in the hands of Japanese partners while retaining authority over operational matters.
For several years, Motorola went back to operating a sales office as its primary presence in the Japanese semiconductor market. In the late 1970s, an engineering office was opened to establish closer relations with customers, and this office took on some testing and quality control functions. The sales force and most of the management were Japanese, yet market share was stuck at a low level. It came as no consolation that Motorola's Ameri-