U.S.-Japan Strategic Alliances in the Semiconductor Industry Technology Transfer, Competition, and Public Policy (1992) / Chapter Skim
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10 Conclusions
10 Conclusions
Pages 74-90
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From page 74... ...
Indeed, as foreign markets expand, commercial pressures to form alliances with companies in many different foreign countries will arise. The world semiconductor industry will see more alliances concluded between American and European firms, between Asian and American companies, and between European and Japanese corporations.
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From page 75... ...
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, 38In 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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From page 76... ...
For U.S. industry as a whole, the loss of semiconductor manufacturing capability and infrastructure resulting from a pattern of alliances may be the most serious potential cost.
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From page 77... ...
However, industry trends toward open systems may reduce the importance of proprietary MPU architectures (see discussion of downstream trends in Chapter 8~. If this is the case, then the lack of capability to design superior MPUs would be less of a hurdle for Japanese companies seeking to compete in systems markets, particularly if they control the manufacture of critical components and possess sufficient marketing capability.
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From page 78... ...
companies trying to break into the Japanese market. Despite the long-term organizational learning benefits described below, the Motorola-Alps joint venture is a clear example of costs incurred in attempting to break into the Japanese market.
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From page 79... ...
For example, when a fabless start-up decides to consign manufacturing to Japanese companies rather than build internal manufacturing capability, it passes up experience in making devices that could bring greater technical independence and could facilitate entry into other product lines. At an industry level, lost demand for semiconductor equipment and all the inputs related to process technology may result in the disappearance of U.S.
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From page 80... ...
Fujitsu did a great deal of custom design work on the SPARC chip, but in that specific case, Sun added the most significant value to the chip, so adequate IPR protection and competition among licensing partners safeguard Sun. In the short term, American systems makers are more vulnerable in areas such as LCDs and DRAMs where U.S.
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From page 81... ...
3. Leverage of Investment Resources: Linking with Japanese partners sometimes helps larger U.S.
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Motorola has gained better access to the semiconductor market by linking with Toshiba. The Power Integrations-Matsushita and nCHIP-Sumitomo Metals alliances show promise for delivering market access to the U.S.
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From page 83... ...
Although the record of the past illustrates significant costs associated with U.S.-Japan strategic alliances, the context is changing and the examples in this report illustrate that in some cases, tangible benefits accrue to both sides. It will be important for U.S.
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From page 84... ...
The worst alliances, from a U.S. perspective, have been one-shot transactions that mortgage the company's and Amenca's future by selling its more valuable, state-of-the-art technologies without bringing a reverse flow TABLE 13 Elements of Advantageous Alliances Require, as a prerequisite, thoroughgoing analysis and careful preparation knowledge of the strengths and weaknesses of the partner and of the value of technology and other assets, as well as a clear set of objectives; provide mechanisms for accessing Japanese technology, particularly manufacturing technology, and for strengthening U.S.-based production; open opportunities for U.S.
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From page 85... ...
the broad range and versatility of semiconductor applications for large end user industries, including automobiles and the service sector; and (4) the pivotal position of the semiconductor industry in the system of institutions and practices underlying America's capacity to innovate—employment, manufacturing infrastructure, R&D, graduate training, and so forth.
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6. If structured properly, strategic alliances with Japanese companies can contribute to the maintenance of manufacturing and fabrication facilities in the United States and to the expansion of market opportunities abroad.
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In the past, a glaring asymmetry existed: too many U.S. firms entered with only short-term, quickfix objectives in mind, whereas their Japanese counterparts approached the alliance in a spirit of moving down an organizational learning curve and creating long-term competitive strengths.
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From page 88... ...
semiconductor industry and of the United States as a place of production requires not only economic revitalization at the macroeconomic level, but also strategic alliances structured to produce positive, demonstrable benefits to the United States. If U.S.-Japan alliances can bring in vital technology, manufacturing know
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From page 89... ...
89 how, and resources instead of serving primarily as conduits for technology transfer to Japan the long-term interests of both countries will be served. The role of strategic alliances has grown enormously over the past decade and will continue to increase.
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